Under new law, Rs 2 lakh penalty for not answering tax authorities' queries

Failure to answer questions from the tax department can entail a penalty of up to Rs 2 lakh from the next financial year, under the new black money law, which has got the assent of the President.

The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 provides for a minimum penalty of Rs 50,000.

Besides, tax authorities would be able to send summons or notices via electronic mails (emails) and fax to seek information from the suspects of stashing the black money abroad.

The Act got the President's assent on Tuesday and will come into force from April 1, 2016. The new law, which has provisions to deal with the problem of the undisclosed foreign income and assets, was passed in the Rajya Sabha on May 13, two days after it got the Lok Sabha nod.

A person shall be liable to a penalty if he has, without reasonable cause, failed to answer any question put to him, by a tax authority in the exercise of its powers, the Act says.

The penalty will be imposed if he fails to sign any statement made by him in the course of any proceedings which a tax authority may legally require him to sign and, also for their failure to attend or produce books of account or documents called in response to summons issued to him.

The service of any notice, summons, requisition, order or any other communication might be made by delivering or transmitting a copy to a person by post or by such courier service as might be approved by the Central Board of Direct Taxes (CBDT).

It can also be issued in the form of any electronic record and “by any other means of transmission of documents, including fax message or electronic mail message, as may be prescribed”.

The CBDT might make rules providing for the addresses including the address for electronic mail or electronic mail message to which the communication might be delivered or transmitted to a person, as per the Act.