Thousands of building owners who had paid their property tax promptly have received BBMP notices saying they have partly defaulted on their payments since 2016-17.
About 78,000 such notices have gone out from the revenue department, triggering shock and outrage among citizens.
Property owners pay tax under the Self Assessment Scheme(SAS). Tax zones were redrawn in 2016-17, according to the BBMP, but the property owners continued with the older zones.
Officials say that the notices have been issued as a part of scrutinising property tax returns to identify properties that have been underassessed, zonal mismatch of properties and properties that have evaded the tax net, and are planning to mop up Rs 240 crore by way of dues.
How it works
Properties in Bengaluru are divided into six zones based on the guidance value of the properties. The property tax is fixed on the basis of the zones.
The owner has to fill in details such as square feet, built-up area, parking, whether property is for own use or rent.
“The notices have been issued when the zone is wrongly entered and the tax paid is less than what is due,” an official says.
Citizens are furious with this argument. “If they change a zone, can’t they update it in their software? How can they hold citizens responsible for their own laziness?” says a Jayanagar citizen who has received a notice.
A zonal revision happens every three years and there hasn’t been one after 2016 because of the pandemic. Officials concede that the BBMP has not done enough to spread awareness about the revised zones.
D R Prakash, property tax consultant and founder-president of the Osborne Road Residents Welfare Association, has written to the BBMP revenue department seeking an explanation for the notices slapped on citizens.
“In 2016, property tax was increased in two respects — one based on the block period and the other on reclassification of zones. The hikes together added up to an increase of more than 100 per cent in plenty of cases, and citizens protested,” he told Metrolife.
The BBMP cancelled the hike with regard to the zone and retained the hike with regard to the block period. “Now to the dismay of the prompt property owners, wrong notices are being slapped,” he says.
'BBMP slept over changed zones for five years'
S Dinesh, advocate and consultant with Intelectia, says citizens can fight the BBMP notice legally. He recollects that in 2016, the commissioner published revised Unit Area Value (UAV) for zones A to F applicable for the block period of 2016-19 which continues till date. The rules governing the change were also published. Any property being moved to more than one higher zone was capped to the next immediate higher zone. The Self-Assessment Scheme (SAS) was in force, as it is now, and the tax payment online portal was open.
“However, the changed classification of zones remained unchanged or unlocked on the portal, and the option of choosing your old zone or any zone was open. The portal autocompletes monetary valuations and arrives at the final tax payable. Any individual who missed to change the zonal classification continued to pay the tax at the rates computed for the earlier zones. This error continued from 2016 till date,” explains Dinesh. The Karnataka Municipal Corporations Act of 1976 provides for random scrutiny of the returns filed annually. The payment of tax at the old rates ought to be within the knowledge of the BBMP every year since 2016.
“The BBMP slept over it for five years and has now started issuing notices. They could have taken steps to enable citizens to pay the right property tax by taking immediate steps,” adds Dinesh. The law provides for recovery of tax dues within six years but it does not imply that the BBMP should wait that long to initiate the reassessment process. Confusingly, under the same Act, an assessment or reassessment cannot be made after three years as returns filed by an owner is deemed to have been assessed for the year. As a first recourse, citizens can send objections to the commissioner within 30 days. “He or the authorised officer should pass an order within 60 days. Further, it can be taken to the Karnataka Appellate Tribunal,” he says.
Chief says...
BBMP Commissioner Gaurav Gupta insists, “This is an issue of entering the wrong zone.” That is contrary to property owners’ contention that they entered nothing wrong, and any such change could have been factored into the BBMP website, where citizens pay their property taxes. “It would be premature to talk about relief or waiving anything. We will assess the situation and take a decision,” he told Metrolife.
Hoteliers seeking legal opinion
P C Rao, president of the Bengaluru Hoteliers Association, says thousands of restaurant and hotel owners have been served the notices. “They have changed zones from C to B zone in 2016-17. The notices ask for dues for four years with a double penalty and a monthly interest of 2 per cent. This runs into lakhs of rupees for some,” he told Metrolife. The restaurant and hotel business is already in the doldrums, with little or no business during the pandemic, and the community is in no mood to heed the BBMP’s notices. “Why didn’t the zonal change reflect in the software?” he wonders. “We plan to take legal opinion and submit a memorandum to the government.”