IT sleuths to prosecute EO involved in converting Black Money into white

New Delhi [India], July 10 (ANI): The Income Tax Department has made a list of 100 Entry Operators (EO) who were found converting black money into white on commission basis. IT sources said these people have accepted that they took commission of 3-5 per cent and routed the money through their firms.

These Entry Operators are Chartered Accountants or middlemen who launder money on behalf of clients by operating multiple bank accounts. These intermediaries provide cheques to beneficiaries to convert unaccounted cash into legal tender. This is done against cash deposits in the accounts of operators who later raise bogus bills for a commission of 3-5%.

As per sources, the IT officials received a nod from the Central Board of Direct Taxes (CBDT), the apex body of the Income tax Department, to begin action against the erring EOs.

The IT Department has decided to prosecute such Entry Operators under section 277A of IT Act. According to Section 277A IT sleuths can prosecute for falsification of books of account or documents.

A Senior IT official informed ANI on the condition of anonymity that section 277A has been effective since October 1st, 2004, but not a single case was prosecuted under this section.

According to Section 277 A, "If any person willfully and with intent to enable any other person to evade any tax or interest or penalty changeable and imposable under this act, makes or causes to be made any entry or statement which is false and which the first person either knows to be false or does not believe to be true, in any books of account or other documents relevant to or useful in any proceedings against the first person or the second person, under this act the first person shall punishable with rigorous imprisonment for a term which shall not be less than three months, but which may extend to two years with fine."

"After 18 years we are going to prosecute large number of firms which have accepted falsification of books of accounts," the source added.