Investigation wing of Income Tax calls the shots in black money cases

In terms of coping with issues beneath the cruel ‘Black Cash’ legislation, tax authorities in India have a special rule: In lots of instances, the Investigation Wing of the Revenue Tax (I-T) Division additionally carries out the ‘evaluation’ — notably, the place search and surveys have been performed.

The bizarre transfer, which has shocked these suspected of getting undisclosed overseas property, is aimed to quicken tax assortment and construct a stronger case that might stand the scrutiny of appellate our bodies when taxpayers problem the evaluation orders.

The process could be just like the one adopted by central investigation companies like CBI and Enforcement Directorate the place the ultimate report is filed by officers who conduct the investigation.

“Black cash is extremely investigation oriented. That is being carried out on a pilot foundation. There was a thought that evaluation of search issues ought to be carried out by the investigation wing… Now, we is not going to be shocked if somebody challenges the jurisdiction, complaining that the investigating officer could also be biased. Assessees do decide flaws in procedures in defending themselves,” a senior tax official instructed ET.

“Typically there’s a hole between the investigation findings and the ultimate end result. Finally, the (evaluation) orders seem weaker and are unsuccessful within the dispute decision course of,” stated the individual.

The division has activated an earlier, inner directive of the apex physique Central Board of Direct Taxes (CBDT) giving the 2 I-T Division arms concurrent jurisdiction.

Battle of Curiosity

Tax practitioners advising individuals who have been served notices discover this unusual. “The division can all the time argue that if the assessee has nothing to cover what distinction does it make whether or not the evaluation order is issued by the investigation wing or the central circle. However there could be a battle of curiosity because the individual entrusted with investigation can be passing the evaluation order,” stated a senior chartered accountant.

The Investigation Wing collects intelligence and carries out enquiries and searches to identify tax evasion and undisclosed wealth. Collating the proof gathered by the investigation wing, the central circles put together the evaluation order. “Investigation officers are sometimes finest positioned to situation the evaluation order, notably in black cash issues which includes in depth probe… Individuals don’t furnish proof, don’t cooperate, and attempt to delay the method. The assessing officer might not be absolutely clued on to the case and has to go over the investigation report once more. Some assessees make the most of this to stall the method,” stated the tax official.

The CBDT spokesperson didn’t touch upon the topic.

Business circles suppose that the broader involvement of the Investigation Wing could be confined to Black Cash instances as a result of nature of the statute. The Black Cash (Undisclosed International Revenue and Property) and Imposition of Tax Act, which was handed in mid-2015 and got here into pressure on April 1, 2016, was introduced in to beat the restrictions within the Revenue tax Act and tax hidden wealth of Indians stashed in tax havens and held as properties and others property by particular person names, closely-held firms, discretionary trusts and foundations. Within the first set of assessments which grew to become time-barred on March 31, 2021, a number of the assessments have been carried out by the Investigation Wing. That is prone to proceed in subsequent instances. As an example, in an order in Could 2021 (relating to 2 assessees), the deputy director and assistant director investigation have been assigned to train the ability and carry out the operate of the assessing officer.

The Black Cash Act empowers the tax division to query offshore accounts and property which can have been opened or acquired a long time in the past. Underneath the Act, the 12 months during which info is acquired by the tax workplace is the 12 months during which earnings is deemed to have been earned by the assessee.

Leave a Reply

Your email address will not be published. Required fields are marked *