Vdis Declarations May Be Sealed To Ensure Secrecy

The revenue department is considering the possibility of sealing the 4.5 lakh odd declarations made under the voluntary disclosure of income scheme (VDIS), 1997, in a special vault in Delhi to ensure total confidentiality. Though there has never been a leak on VDIS information during the last 40 years, we have to do the best for the declarants since they have reposed their faith in the government, revenue secretary N K Singh said.

The revenue department is keeping the declarations in sealed envelopes at present. Each of these envelopes is in the custody of chief commissioners of the respective income tax circles.

The revenue department has started toying with various options following fears of breach of confidentiality. Media reports hinting at the identity of the son of a politician taking recourse to VDIS have raised serious doubts about whether the identities of declarants can be kept confidential.

Revenue department officials have been busy denying these reports but the denials are not being taken seriously. When so much information is flowing to the media regarding the class of declarants and the quantum declared, how can one assume that the names will not be leaked, said a chartered accountant.

Confidentiality has also become an issue on account of the number of IT officials who have access to the declarations. Technically, IT officials with the requisite level of clearance (assistant commissioners and above) number about 2,900. At least three officials will have definite information on each of the declarations. These include the chief commissioner of the circle, the income tax commissioner who is the receiving authority for the declarations and the assessment officer, who could be of the rank of commissioner, deputy commissioner or assistant commissioner, depending on the quantum of declaration.

Despite the layers of access, IT officials claim that none of the officials will leak information for fear of losing their job. The lower courts cannot demand this information, but even if the Supreme Court would summon me, I would only take the sealed envelope and request the judge to open it in his chamber, an IT official said.

Another fear expressed is the possibility of a new government reviewing the declarations. However, officials point out that since the scheme has been cleared by Parliament, all political parties are legally bound by the secrecy clause.

Traders and other declarants are particularly uneasy about being targeted by the excise and sales tax departments on the basis of information disclosed under VDIS. This fear has risen on account of the non-availability of immunity under the Sales Tax and Excise Acts for declarations made under VDIS.

However, IT officials point out that specific information like the year of violation and the quantum of suppressed production is required for sales tax and excise purposes, which is not provided by declarants while filling the VDIS form.