IT Dept reports sharp rise in prosecutions against tax evaders

IT Dept reports sharp rise in prosecutions against tax evaders

With another blow from Modi Govt to make India free of corruption and curb theblack money menace in the country. Tackling themenace of black money isone amongst the highest priority ofIncome tax department. In order to achieve the objective, IT Dept has started taking stricter actions against the corrupts, tax offenders, tax evaders, black money holders benamidars etc. etc. For instanceBenami properties of more than Rs. 3500 crore are attached by Income Tax Department. In a press release issued by CBDT on 12th January,2018 , IT department claims that there is a sharp increase in the number of criminal prosecution proceedings as compared to previous year. Proceedings of prosecutions have been initiated for offences like

• failure to deposit the tax deducted/collected at source or
• willful attempt to evade tax or payment of any tax;
• willful failure in filing returns of income;
• false statement in verification and inordinate delay in doing so. etc. etc.

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Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes

New Delhi, 12th January, 2018

PRESS RELEASE

Sharp increase in prosecutions of tax evaders by Income Tax Department

The Income Tax Department has accorded the highest priority to tackle themenace of black money. With this objective in mind, the Department has initiatedcriminal prosecution proceedings in a large number of cases of tax offenders and evaders. Prosecutions have been initiated for various offences including wilful attemptto evade tax or payment of any tax; wilful failure in filing returns of income;false statement in verification and failure to deposit the tax deducted/collectedat source or inordinate delay in doing so, among other defaults. During FY 2017-18(upto the end of November, 2017), the Department filedProsecution complaints for various offences in 2225 cases compared to 784 for thecorresponding period in the immediately preceding year, marking an increase of184%. The number of complaints compounded by the Department during the currentFY (upto the end of November, 2017) stands at 1052 as against 575 in thecorresponding period of the immediately preceding year, registering a rise of 83%.Compounding of offences is done when the defaulter admits to its offence and paysthe compounding fee as per stipulated conditions. Due to the decisive and focused action taken by the Department against taxevaders, the number of defaulters convicted by the courts has also registered asharp increase during the current fiscal. 48 persons were convicted for variousoffences during the current year(upto the end of November, 2017) as compared to13 convictions for the corresponding period in the immediately preceding year,marking an increase of 269%. A few illustrative cases are highlighted.

i. A Dehradun Court convicted one defaulter for holding undisclosed foreignbank account and sentenced him to two years of imprisonment for wilfulattempt to evade tax and to two years for false statement in verificationalongwith monetary penalty for each default respectively.

ii. The Court of CJM, Jalandhar convicted a cloth trader with 2 years rigorousimprisonment for trying to cheat the Department by fabricating affidavits andgift deeds, in connivance with his advocate and witness, with the motive of evading tax. The Court, while awarding the sentence to the trader, alsosimultaneously awarded one year's imprisonment to the advocate notarizingthe forged affidavit and also to the witness for aiding and abetting the seriousoffence.

iii. In Bengaluru, the MD of a company engaged in infrastructure projects wasfound guilty of non-deposit of TDS of over Rs. 60 lakh(within the prescribedtime), and was sentenced to rigorous imprisonment of three months alongwithimposition of fine. Similarly, a Mohali resident was held guilty of non-deposit ofTDS within prescribed time and sentenced to one year jail alongwith fine.

iv. In another case of Hyderabad, the Director of an infrastructure company wassentenced to rigorous imprisonment of six months and fine for wilful attempt toevade tax. She was simultaneously sentenced to rigorous imprisonment forsix months alongwith fine for false statement in verification.

v. The Economic Offences Court at Ernakulam sentenced an individual torigorous imprisonment of three months for selling property to evade paymentof taxes of about Rs. 76 lakh despite issuance of the tax recovery certificate by the Tax Recovery Officer.

vi. In yet another case reported from Agra, the Special CJM convicted one defaulter with imprisonment of one year & six months for a wilful attempt to evade tax and for false statements in verification respectively along with a fine.

The Income Tax Department is committed to carrying forward the drive against tax evasion and action against tax evaders will continue in all earnest in the remaining part of the current Financial Year.

(Surabhi Ahluwalia) Commissioner of Income Tax (Media & Technical Policy) Official Spokesperson, CBDT.