Serious tax offenders face prosecution as fight against black money intensifies

NEW DELHI: Indian tax authorities have decided to opt for prosecution of serious tax offenders, shifting focus to punishing evaders from mere revenue augmentation as they intensify the fight against black money.



"In its crusade against black money and with a view to have credible deterrence against generation of black money, the government has shifted the focus to successfully prosecute the offenders in shortest possible time," the Central Board of Direct Taxes said in a statement on Thursday.

Wilful attempt to evade tax is a serious offence punishable under Section 276C of the Income Tax Act, 1961 with imprisonment up to seven years and imposition of fine.

The focus of investigation in the income tax department had so far been on civil consequences, that is, revenue augmentation, the statement said.

"The intent is to step up action in the area of prosecution which was so far dormant. Till now, the customary practice by assessing officers has been to convince assessees to disclose income on the assurance that they won't be prosecuted.. But if the department is serious on prosecution, many assessees may be reluctant to disclose and this could affect overall collection," said Dilip Lakhani, a senior Mumbai-based chartered accountant.

During the current fiscal, 628 prosecution complaints have been filed up to December. Of these, 56 complaints relate to offences concerning undisclosed foreign income. The department conducted searches in 414 groups and seized undisclosed assets of Rs 582 crore and undisclosed income of Rs 6,769 crore in nine months to December 2014.