For the Nagpur Income Tax (I-T) Department, the challenge this year is not just collecting more taxes but also recovering thousands of crores stuck up in pending cases. While the Department has been given a revenue collection target of Rs 14,200 crore for 2026-27, it is simultaneously burdened with unresolved tax demands worth Rs 8,600 crore. Senior officials told ‘The Hitavada’ that the growing backlog has become one of the Department’s biggest concerns. As on March 31, 2026, there were over 4.73 lakh unclassified tax demand entries below Rs 50 lakh, amounting to Rs 2,160 crore, besides 1,676 high-value cases worth Rs 6,439 crore.

 

 

 

Every Assessing Officer has now been asked to classify the top 1,000 pending entries by July 15. Along with pursuing fresh tax collection, the Department is targeting a reduction of Rs 5,156 crore in arrears despite facing staff shortages, mounting litigation and infrastructure constraints. Officials attributed much of the backlog to the faceless assessment regime. “Huge tax arrears have built up because faceless assessment is raising demand without local context. Litigation has also increased. Once an appeal is filed, the Department cannot recover more than 20 per cent of the disputed demand until the case is decided,” a senior official explained. The national picture reflects the same challenge. Against a target of Rs 5.04 lakh crore in arrear recovery during FY 2025-26, the Department collected only Rs 0.85 lakh crore. However, arrear reduction through classification and disposal exceeded targets at 150 per cent. National outstanding tax demand has risen from Rs 24.51 lakh crore in April 2023 to Rs 48.17 lakh crore by April 2025.

 

The Department also acknowledged a severe shortage of Assistant Commissioners and Deputy Commissioners across Vidarbha. “Every officer is handling multiple charges simultaneously, which affects efficiency,” officials said. Officials have also asserted that surveys had remained restricted in recent years because approval powers became concentrated at higher levels, discouraging field officers from initiating action. Officials expect to perform well this year as their strategy, aligned with the vision of Viksit Bharat 2047, focuses on technology-driven enforcement, capacity-building and litigation management. While with a higher revenue target, a massive arrear backlog and limited manpower, the Department faces one of its most demanding financial years, officials still remain confident of meeting the challenge.