Skip to main content

Serial tax dodgers can be prosecuted before assessment

Seeking to send a stern message, the income tax (I-T) department has initiated a plan to take strident action against tax evaders. This is to ensure they are prosecuted without requiring the assessment to get over.

This follows an action plan drawn up by the Central Board of Direct Taxes (CBDT) where an aggressive strategy was outlined to nab tax dodgers. The CBDT had circulated a strategy paper for the investigation team of the I-T wing, saying the taxman should prosecute tax evaders in large numbers to create a credible deterrence against the black money menace.

“Filing of prosecution complaints in cases where evidence is strong does not require completion of tax assessment,” the department said in its action plan prepared for FY-18.

“The department has tweaked its strategy from just raising tax demand to going the extra mile of taking them to courts,” said a senior tax official with direct knowledge of the plan.

Typically, the tax department launches a prosecution or charge sheets tax evaders under Section 276CC of the I-T Act after arriving at a decision post-tax assessment whether a particular case is fit for prosecution.

Section 276CC provides for prosecution and makes tax evasion punishable with rigorous imprisonment of three months to seven years along with a monetary penalty depending on the amount dodged. “When a person is found to have committed offences under the said sections and there is evidence to prove he has wilfully done so, the assessing officer can file a complaint. According to the new plan of action, a prosecution can be initiated soon after a search is conducted or the following day,” said another tax official.

“There have been chronic tax evaders who under-report their income, fudge accounts to hide their source of income, falsify statements, or disappear after being slapped with a tax demand notice to circumvent payments. A tough action plan was, therefore, needed,” the official added.

The tax department is also addressing another important area of tax subterfuge that takes place via benami transactions. The action plan emphasised on ways to investigate benami transactions under the newly enforced Benami Transactions Act.

The CBDT had asked the I-T wing to identify, examine and take prompt action against violators, and had also set a target and timeline to inspect and wind up the matter.

The tax department will have to finalise benami cases for FY14, FY15 and FY16 by the end of this month, and the remaining by March 2018. Moreover, tax officials were also given directives to dispose suspicious transaction reports they receive from banks and other Intelligence units.

According to the plan, the tax department has to first dispose of those investigations resulting in a detection of undisclosed income of Rs 100 crore and above, and to finalise them by December. In its action plan, the CBDT also revised the target of searches and seizures by tax officials.The new diktat said officials at the level of additional directorate would need to conduct at least two searches and seizures every week.

According to official figures, the I-T department conducted over 1,000 searches and surveys during the last financial year, and slapped close to 100 prosecution complaints against serial tax evaders during this period.

Business Standard New Delhi, 07th July 2017


Popular posts from this blog

RBI rushes in to prop up falling rupee

RBI rushes in to prop up falling rupee India’s central bank reportedly intervened in the currency markets on Monday to prevent a further slide in the local unit, which breached the 67 mark to a dollar for the first time in 15 months amid a widening trade gap and runaway import bills fuelled by high crude-oil prices. Some state-owned banks were seen selling dollars aggressively, interventions that market dealers attributed to the central bank’s strategy to stem the decline of the Indian rupee against the US currency. The rupee is the worst performing among a dozen Asian monetary units in the past three months. It lost 4.25 per cent to the dollar during the period, show data from Bloomberg. On Monday, the Reserve Bank of India (RBI) is said to have sold about Rs 800 million collectively on the spot and exchange traded futures markets, dealers said. An email sent to RBI remained unanswered until the publication of this report. The currency market has seen such a strong central bank interven…

GST Refund of Rs 20,000 Cr Pending: Exporters’ Body

GST Refund of Rs  20,000 Cr Pending: Exporters’ Body Refund of over Rs 20,000 crore on account of Goods and Services Tax (GST) is pending with the government with more than half the amount stuck as input tax credit, Federation of Indian Export Organisations said on Tuesday. While claims over Rs7,000 crore were cleared in March, the amount was Rs 1,000 crore in April.However, after exporters’ request, the GST council and tax department are organizing a second phase of Special Refund Fortnight starting May 31, which will enable exporters to draw their refunds at a speedy pace. Many exporters have been unable to file the refund of input tax credit due to technical glitches, exports and claim happened in different months. The major challenge lies on ITC refund especially because the process is partly electronic and partly manual which is cumbersome and add to the transaction cost, the exporters’ body said. On IGST, refunds are getting delayed due to airline and shipping companies not submitt…

Shrinking footprints of foreign banks in India

Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…