Law prohibits IT dept from pursuing Quattrochi

NEW DELHI: The income-tax department’s hands are tied by the law even if it wants to go after Ottavio Quattrocchi, following the observations of the Income Tax Appellate Tribunal ( ITAT).

Sections 148 and 149 of the Income Tax Act prevent authorities from reopening assessment in any case that goes beyond six years.

The provision, which was brought in to protect the interest of taxpayers, now stands in the way of the I-T department, making any action against the Italian businessman almost impossible. Interestingly, ITAT’s observations against Quattrocchi came in a tax dispute case involving Win Chaddha, another middleman accused of receiving kickbacks.

The tribunal also observed that since Quattrocchi was living in India for a considerable time the issue about his tax residence status should have been verified.

As per the provisions in the Income Tax act, any one who has stayed in the country for more than 180 days is considered a resident.

A foreign citizens who become residents has to obtain an I-T clearance certificate from tax authorities before he can leave the country. An individual or a company is also required to stand guarantee for tax purposes when such a person leaves the country.