CBDT Pushes For Quick Data Sharing

CBDT Pushes For Quick Data Sharing The income tax department has directed its officials to respond to all queries from investigating agencies within 15 days of getting a request. The move is part of a strategy to improve collaboration across agencies such as the Central Bureau of Investigation (CBI), the police, the Enforcement Directorate (ED), the Securities and Exchange Board of India, and the Serious Fraud Investigation Office (SFIO). The idea is to make enforcement more stringent. The department also directed income tax officers to identify situations where seized assets were expected to be released and to finish the procedure by June 30th. Every year, the Central Board of Direct Taxes (CBDT) releases a central action plan (CAP) directing tax officials on targets and deliverables for the year ahead. The interim action plan is rolled out in April before the CAP is finalized within a few months. According to the interim action plan, all information submission requests pending as on 31 March 2022 must be submitted by 15 May. All information requests received after 1 April must be submitted within a fortnight. Mint has seen a copy of the action plan. The Directorate General of Income Tax (Systems) exchanges information with 10 government agencies through the National Intelligence Grid or NATGRID, an integrated intelligence master database. These include the CBI, ED, Directorate of Revenue Intelligence (ORI), Intelligence Bureau (IB), Central Board of Indirect Taxes and Customs (CBIC), and the Directorate General of GST Intelligence (DGGI), among others. The sharing of information is aimed at enabling the agencies to perform their functions under the respective laws. Data sharing among agencies and departments has become an important tool for the government in detecting discrepancies and zeroing in on transactions that need to be investigated. This, combined with the push to use digital payments, disincentivize cash usage, and deduct tax at source, have all contributed to increased tax compliance. According to experts, the income tax department's timely exchange of information with other authorities will increase regulatory efficiency and compliance. "Often, law enforcement agencies seek crucial information from the income tax department, which may include information procured from foreign tax counterparts regarding the assets or investment held outside India, material found during search and seizure operations, and details of unaccounted money and money laundering," said Om Rajpurohit, director, corporate and international tax, AMRG & Associates, an accounting firm. "Strict instructions to provide information within 15 days, where information is sought after 1 April, will help early access to information allowing agencies to act more quickly as an unnecessary delay may not be counterproductive," Rajpurohit said.