CBDT pushes income tax recovery in demonetisation cases

With only Rs10,21,251 crore, or 85 per cent of the budget target of Rs12,00,000 crore tax collection, realised as of 23 March 2019, the authorities are taking a relook at the demonetisation impact on tax collections.

As an interim measure to address the issue of tax shortfall, the CBDT has instructed its officials to “dispose of all cases related to demonetisation where assessment is required to be framed”.

The CBDT had earlier identified 87,000 cases where assesses had not filed their responses to income-tax notices issued post-demonetisation. 

The CBDT had also issued directions to income tax offices across the country to probe financial transactions of about 3 lakh firms de-registered by the government for tax evasion and money laundering.

However, collection of data related to income for tax purposes become difficult once a firm is de-registered by the MCA.

The tax department has now set a 30 June deadline for filing of references before the National Company Law Tribunal for firms that have been “struck off” under the Companies Act.

The CBDT will issue notices to non-filers of Statement of Financial Transactions (SFTs) under Section 285 BA of the Income-Tax Act by 15 May.

The Income Tax Act requires specified entities such as banks and mutual funds to report and file Annual Information Returns (AIRs) of individuals carrying out high-value transactions.

The CBDT has also instructed recovery officials to identify cases of violation of Section 269SS of cash payments of Rs5 lakh and above for 2016-17 and 2017-18, and also identify cases of undisclosed income as per section 50C and 56(2)(vii) relating to capital gains from sale of land and real estate by 30 June.

They have been asked to look at issues relating to tax deducted at source and process cases of pending demand.

CBDT has also asked recovery officials to proceed with auction sale of 20 per cent of properties attached till 31 March, by 30 June. It has also set a target of at least one eligible property per TRO for the proposed auction sale.

Last year also, the CBDT had directed the department to ensure filing all its petitions before the NCLT to recover due taxes worth crores of rupees from about three lakh de-registered shell or dummy companies.