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  • I-T Cracks Whip on Benami Assets, Large Depositors

    Publish Date : 08 Nov 2017

    India's tax authorities have begun cracking down on benami assets and those who deposited large amounts of cash in the aftermath of demonetisation but haven't yet filed returns as it intensifies the war against black money .

    The income tax department has already seized 541 properties and frozen bank accounts holding funds of about Rs. 1,800 crore, said a top department official, adding that more action is expected soon.

    “Big focus would be on benami properties and action on persons who have not filed returns even after their cash deposits during demonetisation were detected,“ the official said.

    Some of these are assets belonging to high-profile politicians and their relatives, the official said. The department could soon start auctioning some of these seized assets after due legal process.

    The stringent benami law enacted last year empowers the taxman to confiscate such assets, impose penalty of as much as 25% of the fair market value and send the guilty to jail for up to seven years.

    Prime Minister Narendra Modi declared that the uld go after bena government would go after benami properties during a campaign speech on November 4 in Himachal Pradesh. PM Modi said that the Congress was worried as its leaders holding such assets would face the heat. He said the Congress campaign against demonetisation was driven by its attempts to mislead the people and whip up sentiment against him before he raises a “storm“ over benami assets.

    The tax department has identified 20,572 cases for scrutiny. It plans to send notices to those that have not filed returns despite reminders after the due date of November 7 under Section 142(1) of the Income Tax Act. High-risk cases, where there is a large mismatch between returns and deposits, will be picked up for enforcement action, said the official cited above.

    The fight against black money has been a key focus area for the government. Its first cabinet decision after taking charge in May 2014 was to set up a special investigation team under the Supreme Court on black money.

    OPERATION CLEAN MONEY

    The department launched Operation Clean Money soon after Rs. 500 and Rs. 1,000 notes were demonetised. In the first phase of the operation, 1.77 million suspicious cases, involving Rs. 3.68 lakh crore and 2.3 million bank accounts were identified. Only 1.12 million people responded to SMS messages and emails sent by the income tax department.

    Subsequently, Operation Clean Money 2.0 included the launch of a dedicated portal for the black money cases that had been identified.

    Apart from this, 900 searches took place between November 2016 and March 2017, leading to the seizure of Rs. 900 crore, including cash of Rs. 636 crore and the admission of undisclosed income of about Rs. 8,000 crore. The government carried out 8,239 surveys during this period leading to the detection of Rs. 6,745 crore of unaccounted wealth.

    A crackdown on shell companies that allegedly helped individuals launder money led to cash seizures of Rs. 13.65 crore and a surrender of Rs. 127 crore in December. More than 110 fuel retailers in Rajkot were found to have deposited cash of over Rs. 190 crore, exceeding sales made during the period. Fuel outlets had been allowed to accept the demonetised notes for a limited period of time.

    A special task force under the joint chairmanship of the revenue and corporate affairs secretaries has been set up to look at the shell companies. A total of 22,000 beneficiaries that evaded income of over Rs. 13,300 crore were identified in 2013-16. - www.economictimes.indiatimes.com [08-11-2017]

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