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Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi, 21st September, 2021
PRESS RELEASE
Income Tax Department conduct`s searches in Delhi, Punjab and West Bengal
The Income Tax Department carried out a search and seizure operation on 18.09.2021 on a leading business house of India involved in manufacture of textile and filament yarn having corporate offices in Delhi, Punjab and Kolkata.
During the course of the search operation, many incriminating documents, loose sheets, diaries, digital evidences etc have been recovered which indicate involvement of the group in routing of unaccounted funds back in its Indian entities, possession of foreign bank accounts unreported to the Department. Substantial evidence of transactions outside the books of accounts, cash transactions in land deals, bogus expenses debited in books of accounts, unaccounted cash expenditure, accommodation entries taken from entry operators have been gathered.
The group has maintained unaccounted funds of about Rs. 350 crore in its foreign bank accounts and has also routed these funds back into its business through shell entities in tax havens. The modus operandi detected was related to investment by foreign entities, under control of the group, in Foreign Currency Convertible Bonds, issued by its main concern, and subsequently under the garb of defaulting on payments, converting it into shares of the company. It was also seen that foreign companies and trusts were being paid management fees for managing the unaccounted funds. Though there is a specific requirement of disclosing foreign assets owned/managed in the form of companies and bank accounts in Schedule FA in Income Tax Returns, the same has not been disclosed by the group to the Department.
Details of accounts related to unexplained personal expenditure in cash were found to be meticulously maintained in one of the main offices of the company. Evidence has been gathered that cash of about Rs. 100 crore was generated by debiting bogus expenditure in company accounts and cash transactions in land deals.
The search operation is still continuing and further investigations are in progress.
Surabhi Ahluwalia
Commissioner of Income Tax (Media & Technical Policy)
Official Spokesperson, CBDT
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
PRESS RELEASE
Income Tax Department conducts searches in Nagpur
The Income Tax Department carried out a search and seizure operation on 17.09.2021 in the case of a prominent public figure in Nagpur and his family members. The group is having wide business interest spanning the fields of Education, Warehousing and Agri-business in Nagpur and other parts of Maharastra. More than 30 premises were covered in the search and survey operations spread across Nagpur, Mumbai, New Delhi and Kolkata.
During the course of the search and seizure operation, many incriminating documents, loose sheets and other digital evidences were found and seized. These evidences clearly indicate the involvement of the group in unaccounted financial transactions made outside the regular books of accounts including inflation of expenses, money laundering, bogus donation receipts, unaccounted cash expenses etc. Evidence for receipt of bogus donation in the hands of the Trust run by the assesse group through money laundering, using Delhi based companies to the extent of Rs.4.00 crore has been found. This clearly substantiates the laundering of the unaccounted income of the assessee routed as donation to the Trust. Further, specific evidences have been unearthed which reveal that three Educational Institutions of the Trust have indulged in inflation of expenses in which salaries paid to the employees were partly collected back in cash. Such evidences were found for several financial years amounting to more than Rs.12 crore. During the search, it was also detected that the Trust, apart from suppression of receipts, has paid substantial amounts to brokers for arranging admissions. Such payments, to the tune of about Rs.87 lakh have been paid in cash and are completely unaccounted.
Evidence found during the search clearly indicates concealment of income to the extent of about Rs.17 crore. Several bank lockers found during the course of the search operation have been put under prohibitory orders. The evidence gathered during the search is being examined and further investigations are in progress.
(SurabhiAhluwalia)
Commissioner of Income Tax (Media & Technical Policy)
Official Spokesperson, CBDT
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
PRESS RELEASE
Central Government relaxes provisions of TDS u/s 194A of the Income-tax Act, 1961 in view of the section of 10(26) of the Act
The Central Government in exercise of the powers conferred by sub-section(1F) of section 197A of the Income-tax Act, 1961(“the Act”) notified that no deduction of tax shall be made on the following payment under section 194A of the Act, namely payment in the nature of interest, other than interest on securities, made by a Scheduled Bank (hereinafter the ‘payer’) located in a specified area to a member of Scheduled Tribe (hereinafter the ‘receiver’) residing in any specified area as referred to in s.10(26) of the Act, subject to the following conditions:
(i) the payer satisfies itself that the receiver is a member of Scheduled Tribe residing in any specified area, and the payment as referred above is accruing or arising to the receiver as referred to in section 10(26) of the Act, during the previous year relevant for the assessment year in which the payment is made, by obtaining necessary documentary evidences in support of the same;
(ii) the payer reports the above payment in the statements of deduction of tax as referred to in sub-section (3) of section 200 of the Act;
(iii) the payment made or aggregate of payments made during the previous year does not exceed twenty lakh rupees.
For the purposes of the said notification, ‘Scheduled Bank’ means a bank included in the Second Schedule of the Reserve Bank of India Act,1934.
Notification no. 110/2021 dated 17th September, 2021 has been issued. It is available on www.incometaxindia.gov.in and also on www.egazette.nic.in .
(SurabhiAhluwalia)
Commissioner of Income Tax (Media & Technical Policy)
Official Spokesperson, CBDT
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
PRESS RELEASE
Government extends certain timelines to ease compliances
The Central Government, in continuation of its commitment to address the hardship being faced by various stakeholders on account of the Covid-19 pandemic, has, on consideration of representations received from various stakeholders, decided to extend timelines for compliances under the Income-tax Act, 1961 (hereinafter referred to as “the Act”) in the following cases, as under:
Further, the time limit for issuance of notice and passing of order by the Adjudicating Authority under the Prohibition of Benami Property Transactions Act, 1988 has also been extended to 31st March, 2022.
Notification no. 113 of 2021 dated 17th September, 2021 has been issued in this regard and can be accessed at www.incometaxindia.gov.in.
(SurabhiAhluwalia)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi, 10th September, 2021
PRESS RELEASE
CBDT issues clarification regarding carry forward of losses in case of change in shareholding due to strategic disinvestment
Finance Act, 2021 has amended section 72A of the Income-tax Act, 1961 (the Act) to inter alia provide that in case of an amalgamation of a public sector company (PSU) which ceases to be a PSU (erstwhile public sector company), as part of strategic disinvestment, with one or more company or companies, then, subject to the conditions laid therein, the accumulated loss and the unabsorbed depreciation of the amalgamating company shall be deemed to be the loss, or as the case may be, allowance for unabsorbed depreciation of the amalgamated company for the previous year in which the amalgamation was effected.
In order to facilitate the strategic disinvestment, it has been decided that Section 79 of the Income-tax Act, 1961, shall not apply to an erstwhile public sector company which has become so as a result of strategic disinvestment. Accordingly, loss incurred in any previous year prior to, and including, the previous year of strategic disinvestment shall be carried forward and set off by the erstwhile public sector company. The above relaxation shall cease to apply from the previous year in which the company, that was the ultimate holding company of such erstwhile public sector company immediately after completion of the strategic disinvestment, ceases to hold, directly or through its subsidiary or subsidiaries, fifty-one per cent of the voting power of the erstwhile public sector company.
The term “erstwhile public sector company” and “strategic disinvestment” shall have the meaning in Explanation to clause (d) of sub-section (1) of Section 72A of the Income-tax Act, 1961.
Necessary legislative amendments for the above decision shall be proposed in due course of time.
(Surabhi Ahluwalia)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT