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

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New Delhi, 18 th October, 2023

Press Release

Income Tax Department conducts searches in Tamil Nadu and Puducherry Region

Income Tax Department conducted search & seizure action in the cases of two groups, primarily running educational institutions engaged in professional courses, on 05.10.2023. These groups are also carrying out other businesses such as distillery, pharmaceuticals, hospitals and hotels, etc. About 100 premises were covered during the search action in Tamil Nadu and Puducherry.

A large number of incriminating evidences in the form of loose sheets, hard copy of documents, and digital data have been found and seized. The modus-operandi of tax evasion detected in running such educational institutions includes concealment of fee receipts, bogus claim of disbursement of scholarships, etc.

Large scale evidences about receipt of fee which are unrecorded in the books of account and claim of non-genuine disbursement of scholarships have been seized. The preliminary analysis, so far, has resulted in collecting evidences for such unaccounted fee receipts of more than Rs. 400 crore and incorrect claim of disbursement of scholarship to the tune of Rs. 25 crore. In one of the groups, seized evidence indicates that trust was utilizing the services of agents for garnering students, for which unaccounted commission payment of about Rs. 25 crore has been made.

In the distillery business run by one of the groups, it has been found that bogus expenditure has been claimed for about Rs. 500 crore towards purchase of inputs such as, bottles, flavours, Extra Neutral Alcohol and freight charges, etc. Such purchases are not corroborated with purchase invoices or entries in stock registers. Several evidences have been recovered showing that cheques have been issued to various non-existent entities and the same have been received back in the form of cash for making unaccounted investments and for other expenditure which are not allowable as business expenses.

The seized documents suggest that amount exceeding Rs. 300 crore has been diverted from trusts either for personal expenses of the trustees or for deployment in diverse businesses. It includes payments made by one of the groups for acquiring an industrial entity in Andhra Pradesh.

So far, the searches have resulted in seizure of unaccounted cash amounting to Rs. 32 crore and gold bullion of Rs. 28 crore, thereby aggregating to Rs. 60 crore. 

Further investigations are in progress.

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

 

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

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New Delhi, 16 th October, 2023

Press Release

Income Tax Department conducts searches in Karnataka and AP&TS region 

Income tax department conducted a search & seizure action in the case of some Government Contractors, Real estate developers and their Associates on 12.10.2023. About 55 premises were covered during the search action in the State of
Karnataka, AP, Telangana and New Delhi.

A large number of incriminating evidences in the form of loose sheets, hard copy of documents and digital data have been found and seized. The modus-operandi of tax evasion detected indicates that these contractors were involved in reducing their income by inflation of expenses by booking bogus purchases, non-genuine claim of expenses with sub-contractors and claiming ineligible expenses. The irregularities detected in utilization of contract receipts, has resulted in generation of
huge unaccounted cash and creation of undisclosed assets.

Evidence indicating inflation of expenses in the form of discrepancies in Goods Receipt Note (GRN) validation have been unearthed during the search. Evidences of huge discrepancies in documentation related to purchases booked and actual
physical transport of goods have also been unearthed, with regard to bogus transactions with sub-contractors, some of whom were also covered during the search. Further, these contractors were also involved in booking expenses for non-
business purposes. Evidences of claim of liaison expenses have also been found and seized.

Large scale unaccounted cash transactions, which are not found recorded in the books of account, have also been found during the search, from the premises of assessees, sub-contractors, and associates including certain cash handlers.

The search has resulted in seizure of unaccounted cash of approximately Rs.94 crore and gold and diamond jewellery of over Rs.8 crore, aggregating to more than Rs. 102 crore. Further, a cache of about 30 luxury wrist watches of foreign make
were unearthed from the premises of a private salaried employee, not engaged in the business of wrist watches.

Further investigations are in process.

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

 

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

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New Delhi, 2^nd October, 2023

PRESS RELEASE

More than 30 lakh Audit Reports filed till 30^th September, 2023, on the e-filing portal of the Income Tax Department

The Income-tax Department appreciates taxpayers and tax professionals for making compliances in time with respect to filing of Tax Audit Reports (TARs) and other audit reports in Form No. 29B, 29C, 10CCB, etc. More than 30.75 lakh audit reports, including about 29.5 lakh Tax Audit Reports have been filed for AY 2023-24 on the e-filing portal till the end of the due date. 

To facilitate the taxpayers, extensive outreach programmes were carried out. Around 55.4 lakh outreaches were done through e-mails, SMSs, social media, along with information messages on Income Tax portal to create awareness among the taxpayers to file the Tax Audit Reports and other audit forms within the due date. Various user awareness videos were uploaded on the Income Tax portal to provide guidance. Such concerted efforts have been helpful to the taxpayers and tax professionals in filing the audit reports within the due date.

The e-filing portal successfully handled the traffic, providing a seamless experience to the taxpayers and tax professionals for filing the audit reports. This smooth filing experience has been appreciated by professionals on various platforms including social media. 

The e-filing Helpdesk team has handled approximately 2.36 lakh queries from the taxpayers in the month of September, 2023 supporting the taxpayers and tax professionals proactively during the filing period, helping them resolve any complexity involved. The support from the helpdesk was provided through inbound calls, outbound calls, live chats, Webex and co-browsing sessions. The Helpdesk team also supported resolution of queries received on the Twitter handle of the Department through Online Response Management (ORM), by proactively reaching out to the taxpayers/ stakeholders, providing assistance to them on different issues on a near real-time basis. Various webinars related to filing of Audit forms were conducted to guide the Tax professionals.

The Department expresses gratitude to all tax professionals and taxpayers for their support in compliances. 

(Surabhi Ahluwalia)

Pr. Commissioner of Income Tax

(Media & Technical Policy) &

Official Spokesperson, CBDT

 

Ministry of Finance

CBDT notifies changes to Rule 11UA in respect of ANGEL TAX

Dated: 26 SEP 2023

The Finance Act, 2023, brought in an amendment to bring the consideration received from non-residents for issue of shares by an unlisted company within the ambit of section 56(2)(viib) of the Income-tax Act, 1961(the Act), which provides that if such consideration for issue of shares exceeds the Fair Market Value (FMV) of the shares, it shall be chargeable to income-tax under the head ‘Income from other sources’. 

Keeping in line with the commitment of the Government to involve stakeholders in the drafting of the law, suggestions and feedback were invited from stakeholders and general public on the Draft Rule 11UA for valuation of methods for calculating the Fair Market price vide Press Release dated 19th May, 2023.

Taking into consideration the suggestions received in this regard and detailed interactions held with stakeholders, Rule 11UA for valuation of shares for the purposes of section 56(2)(viib) of the Act has been modified vide notification no. 81/2023 dated 25th September, 2023.

The key highlights of the changes in Rule 11 UA are:

a) In addition to the two methods for valuation of shares, namely, Discounted Cash Flow (DCF) and Net Asset Value (NAV) method, available to residents under Rule 11UA, five more valuation methods have been made available for non-resident investors, namely, Comparable Company Multiple Method, Probability Weighted Expected Return Method, Option Pricing Method, Milestone Analysis Method, Replacement Cost Method.

b) Where any consideration is received for issue of shares from any non-resident entity notified by the Central Govt., the price of the equity shares corresponding to such consideration may be taken as the FMV of the equity shares for resident and non-resident investors, subject to the following: 

(i) To the extent the consideration from such FMV does not exceed the aggregate consideration that is received from the notified entity, and

(ii) The consideration has been received by the company from the notified entity within a period of ninety days before or after the date of issue of shares which are the subject matter of valuation.

c) On similar lines, price matching for resident and non-resident investors would be available with reference to investment by Venture Capital Funds or Specified Funds. 

d) Valuation methods for calculating the FMV of Compulsorily Convertible Preference Shares(CCPS) have also been provided.

e) A safe harbor of 10% variation in value has been provided.

The notified Rule provides for expansion of the valuation methodologies to include globally accepted methodology and provide a broad parity to resident and non-resident investors.

The Notification No. 81/2023 dated 25th September, 2023 is available at www.incometaxindia.gov.in.

 

Press Information Bureau
Government of India
Ministry of Finance
18 SEP 2023 8:19PM by PIB Delhi

CBDT extends due date for filing of Form 10B/10BB and Form ITR-7 for the Assessment Year 2023-24

The due date of furnishing Audit reports in Form 10B/Form 10BB for the Financial Year 2022-23, which is 30.09.2023 has now been extended by the Central Board of Direct Taxes (CBDT) to 31.10.2023.

The due date of furnishing of Return of Income in Form ITR-7 for Assessment Year 2023-24, which is 31.10.2023 is also extended to 30.11.2023.

CBDT Circular No. 16/2023 in 225/177/2023/ITA-II dated 18.09.2023 issued. The said Circular is available on www.incometaxindia.gov.in.