Black money: I-T prosecution action triples this financial year

Prosecution action by the Income Tax department in black money cases has shot up three times with the taxman filing over 570 such charge sheets across the country till January this year.

The department, as per an official report accessed by PTI, has also directed its field offices to not spare cases of "serious irregularities" in deposits ascertained by it under 'Operation Clean Money' after demonetisation and file court cases against such entities too.

The latest prosecution figures do not include action linked to demonetisation as such cases are still in the investigation stage, a senior I-T officer said.

The report said I-T prosecution action in cases of tax evasion has jumped three hundred per cent to 570 complaints filed till January under the current 2016-17 financial year, as compared to 196 such complaints filed in courts during the corresponding period in the last financial year fiscal across the country.

Under I-T laws, a court conviction for tax offences can lead to imprisonment of up to seven years in addition to fine and interest and penalty on the tax evaded.

The report said the charge sheets have been filed by the taxman largely under three sections of the I-T Act like 276 CC (not filing return of income), section 276B (not depositing Tax Deducted at Source in time) and section 276C(1) (wilful attempt to evade taxes).

The report stated that apart from filing of prosecution cases in courts, the department "has received 1,195 applications praying for compounding of offences committed by taxpayers".

"This is almost double the number of the applications filed during corresponding period in the last financial year," it said.

A filing of compounding application by an assessee before the taxman requires admission of the offence based on which the department may choose to not file a complaint in the court against the individual or entity and let them off with a penalty and fine.

The prosecution complaints this fiscal by the taxman also includes cases of offshore tax evasion like those under the HSBC bank list, the International Consortium of Investigative Journalists (ICIJ) and the Panama papers probe.

"The increase in number of prosecution cases is reflective of the tax department's shift in approach to tackle black money cases from a mere detection of black money to ensuring prosecution of wilful tax evaders and defaulters under I-T laws as promptly as possible," the I-T officer said.

"Such prosecutions are resulting in good numbers of conviction and this data is being compiled," he added.

The department has recently launched such an action in court against a Telangana MLA for allegedly amassing undisclosed income worth Rs 500 crore in a case of tax evasion.

In the Karnataka and Goa region, the tax department had recently issued over 850 prosecution notices to firms in the private and government domain on charges of delay in remitting TDS funds to the exchequer.

The official added that in a number of instances of black money, entities and individuals are opting for declaration window under the Pradhan Mantri Garib Kalyan Yojna (PMGKY) that ends on March 31.

"Those who are aware of the harsh penalties and prosecution by the taxman under I-T laws are opting for the PMGKY. More such cases will be filed once Operation Clean Money results are finally settled," he said.

"The latest prosecution figures are not connected to the demonetisation period as these cases are still in the investigation stage," the officer added.