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CBDT Launches Aggressive Prosecution Of Tax Evaders & Sends Warning To All Taxpayers To Behave

The Finance Ministry has revealed that it has launched aggressive prosecution against wilful attempt to evade tax or payment of any tax; wilful failure in filing returns of income; false statement in verification and failure to deposit the tax deducted/collected at source etc. It is made clear that the department will carry forward the drive against tax evasion in future as well. All taxpayers have been warned to get their act in order to avoid unpleasant consequences at the hands of the income-tax department

Press Release issued by the Ministry of Finance

Ministry of Finance

Sharp increase in prosecutions of tax evaders by Income Tax Department

Posted On: 12 JAN 2018 2:09PM by PIB Delhi

The Income Tax Department has accorded the highest priority to tackle the menace of black money. With this objective in mind, the Department has initiated criminal prosecution proceedings in a large number of cases of tax offenders and evaders.

Prosecutions have been initiated for various offences including wilful attempt to evade tax or payment of any tax;wilful failure in filing returns of income; false statement in verification and failure to deposit the tax deducted/collected at source or inordinate delay in doing so, among other defaults.

During FY 2017-18(upto the end of November, 2017), the Department filed Prosecution complaints for various offences in 2225 cases compared to 784 for the corresponding period in the immediately preceding year, marking an increase of 184%. The number of complaints compounded by the Department during the current FY (upto the end of November, 2017) stands at 1052 as against 575 in the corresponding period of the immediately preceding year, registering a rise of 83%. Compounding of offences is done when the defaulter admits to its offence and pays the compounding fee as per stipulated conditions.

Due to the decisive and focused action taken by the Department against tax evaders, the number of defaulters convicted by the courts has also registered a sharp increase during the current fiscal. 48 persons were convicted for various offences during the current year(upto the end of November, 2017) as compared to 13 convictions for the corresponding period in the immediately preceding year, marking an increase of 269%.

A few illustrative cases are highlighted.

i. A Dehradun Court convicted one defaulter for holding undisclosed foreign bank account and sentenced him to two years of imprisonment for wilful attempt to evade tax and to two years for false statement in verification alongwith monetary penalty for each default respectively.

ii. The Court of CJM, Jalandhar convicted a cloth trader with 2 years rigorous imprisonment for trying to cheat the Department by fabricating affidavits and gift deeds, in connivance with his advocate and witness, with the motive of evading tax. The Court, while awarding the sentence to the trader, also simultaneously awarded one year’s imprisonment to the advocate notarizing the forged affidavit and also to the witness for aiding and abetting the serious offence.

iii. In Bengaluru, the MD of a company engaged in infrastructure projects was found guilty of non-deposit of TDS of over Rs. 60 lakh(within the prescribed time), and was sentenced to rigorous imprisonment of three months alongwith imposition of fine. Similarly, a Mohali resident was held guilty of non-deposit of TDS within prescribed time and sentenced to one year jail alongwith fine.

iv. In another case of Hyderabad, the Director of an infrastructure company was sentenced to rigorous imprisonment of six months and fine for wilful attempt to evade tax. She was simultaneously sentenced to rigorous imprisonment for six months alongwith fine for false statement in verification.

v. The Economic Offences Court at Ernakulam sentenced an individual to rigorous imprisonment of three months for selling property to evade payment of taxes of about Rs. 76 lakh despite issuance of the tax recovery certificate by the Tax Recovery Officer.

vi. In yet another case reported from Agra, the Special CJM convicted one defaulter with imprisonment of one year & six months for wilful attempt to evade tax and for false statement in verification respectively alongwith fine.

The Income Tax Department is committed to carry forward the drive against tax evasion and action against tax evaders will continue in all earnest in the remaining part of the current Financial Year.


9 comments on “CBDT Launches Aggressive Prosecution Of Tax Evaders & Sends Warning To All Taxpayers To Behave
  1. CA Anand Partani says:

    CBDT also take a stand on those CPC officials on bogus demand raised, hold of refund, hi-pichted assessments, no natural justice followed during assessment, pending appeal more than a year
    Please do the constructive work than destructive by sending tax payers to jail

  2. CA Deepak Soni says:

    MY APPEAL TO THE CBDT TO TAKE AGGRESSIVE STAND AGAINST THE IGNORANT, ARROGANT AND CORRUPT OFFICERS OF THE IT DEPARTMENT WHO NEVER BOTHER ABOUT THE INCONVENIENCE AND HARASSMENT ON PART OF THE TAX PAYERS.THEY HAVE WITH THE BLESSINGS OF THE SENIOR OFFICERS BLOWN AWAY ALL THE CITIZENS’CHARTER AND HAVE NO FEAR. THE TAX PAYERS FOR THE DEFAULT ATLEAST IS MAKING PAYMENT OF HEAVY INTEREST AND PENALTIES BESIDES TAXES.

  3. Shashikant G Parasramka says:

    The income tax dept has nor stopped issuing refunds above 50000/- in bid to control the deficit. If an individual has problems then where should he go? He learns from the govt. itself. The dept is notorious to pay only 6% interest but it yet earns 12%, then why should they grieve? In scrutiny assessments finalised now, the officers in cases where refund was due did’nt issue rfunds but inflated demands with levy of interest u/s 234A, B & C even where the same was not applicable. This being the matter, then the govt. should take action against its own officers too. Will they take action against them?

  4. Adv E.S. Jagadeeshwar says:

    In my opinion before filing the Income Tax Return Auditor has to enlighten the tax payee clearly. Once the Assessee has received any Show Cause Notice from the Tax Officer, what is the approach to be followed? how to submit the documents? who has to appear before the Tax Officer, what documents either original or xerox copies have to be filed? In a case where even the tax payee appears before the Tax Officer, if he has not taken into consideration of such appearance what the party has to do? who has to receive the Assessment Order copy? if the party has not received the A.O. order copy due process of law what he has to do?

    If a tax payee prefer an Appeal what procedure he has to follow? where he has to file? if Auditor is unable to file appeal tax payee has to search for the suitable Tax Professional to represent him. So I think 30 days time limit is not sufficient.

    To file 1st Appeal time limit may be extended to 45 or 60 days. More awareness has to be created at Dist. level regarding the Appeal filing procedures among Tax Advocates and Tax Consultants.

    I wish our Hon’ble Finance Minister will consider the problems being faced by the people living at grassroots or district level where Tax professionals are less and those who are capable to appear before Appellate authority. Tax payee is confusing whom he has to approach to appear before Appellate Authority.

    People have to be encouraged to follow the procedures laid down in the Tax Acts. So that unwanted litigation will be reduced, burden on the courts will also be reduced. For this complicate tax procedures have to be simplified.

  5. CA Anand Partani says:

    Unless and until a with concrete evidence and natural justice is given to the assessee no prosecution to be filed. now days as soon as search and seizure is conducted the department is filing a prosecution case, as willful attempt to evade tax. At the other end whether Government is providing good Infrastructure to the public and corruption free goveranace. Transperent policies, ease of doing business in india, Government has given compensation loss suffered by the business community during riots or morcha, that is on account of worst law and order (recently Maharashtra)
    Taxation is quasi judicial no prosecution as against Government is penalizing and taking interest on delayed payment)
    Tax Payers send to jail what is other disadvantages need to evaluate

  6. Dipak J ShahShah Shah says:

    From the list of Police Station , residents doing business in nearby areas, or doing Money lenders Big way @6 % per month interest rates and borrowers had to make suicides . Harassing the Borrowers by Money lenders. Such people are very more and may be not paying Income Tax at all. They should be prosecuted for all these years. Take the case of Bhajiawala of Surat , had never filed Income Tax for many years and had more Assets. Like Rabaris. Desais doing money lending business silently all over India , in Ahmedabad also , there are many , should be found out by Income Tax Department.

  7. Adv. E.S. Jagadeeshwar says:

    The assessees have to be enlightened on at the time of filing of an Appeal whether they have to pay the estimated tax? if the Assessing Officer wrongly calculated the income and imposed heavy taxes, interest and penalty whether the common people can afford to pay such huge taxes ?

    Precisely say .. What fees the Appellant has to pay towards fee to file Appeal?

    Whether the appellant has to pay the estimated tax of Assessing Officer at the time of filing Appeal?

    Pl. enlighten the assessees.

    Instead of creating fear psychosis among the people it is better to enlighten the people to follow the law.

    For example : if the assessee did not have any taxable income he need not file any Return.

    If there is any wrong calculation on part of the Assessing Officer and if he imposes heavy tax how the commoner will pay?

    To encourage genuine tax payers if he received any Show Cause Notice from the department what he has to do? what is the approach to be followed? Limitation period, if there is any delay in giving reply what he has to do? where they can collect the official information clearly regarding the approach to be followed? has to be enlightened.

    In my opinion people have to encouraged to earn more and pay taxes in time without any fear of Tax Authorities. For this tax procedures have to be simplified.

    Another thing is Assessees have to be enlightened on the purview of Tax Consultants, C.As., C.Ss, CMAs and Advocates. So that talented people will be available at Dist. level. Advocates having accounting background also will get work. At present there is no guaranteed income to all Advocates at Dist. level.

  8. It is a welcome move by the Finance Ministry and the income-tax department. Black money is a scourge which must be eradicated by using the toughest measures.

    • K m sundaram says:

      In general Tax officials are very fair before they initiate prosecution which they use as last resort. Even then the higher officials do carry out conciliation exercise in general. In cases where it is initiated unfairly then courts give relief. Hence the move of Cbdt is appreciable.

3 Pings/Trackbacks for "CBDT Launches Aggressive Prosecution Of Tax Evaders & Sends Warning To All Taxpayers To Behave"
  1. […] Aditya R. Ajgaonkar has pointed out that the aggressive approach of the CBDT with regard to launching prosecution for offenses under the Direct Tax Laws means that all […]

  2. […] The CBDT has earlier sent the chilling warning to all taxpayers that it has launched aggressive prosecution against wilful attempt to evade tax or payment of any tax; wilful failure in filing returns of income; false statement in verification and failure to deposit the tax deducted/collected at source etc (see Press Release). […]

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