I-T notices to holders of foreign assets

‘Quite a few notices have been issued in both black money and benami transactions.’
Shrimi Choudhary reports.

The Income-Tax department has issued notices to taxpayers, seeking action under the black money and benami transactions laws for not disclosing their foreign assets in assessment years from FY14 to FY18.

The notices have been issued ahead of the April 30 deadline, which has been set for reopening tax evasion cases as announced in Budget 2021, shortening the period of investigation to three years from six.

For serious tax fraud cases, in which the concealment of income is Rs 50 lakh (Rs 5 million) or more, the period would be 10 years.

The move indicated the revenue department might be looking at restricting action to limited time periods under these Acts instead of keeping them open-ended. Currently, action under these two stringent Acts is not time-barred.

class=”rbig”Sources said the information was being passed on by the Systems Directorate of the Central Board of Direct Taxes to tax sleuths across the country for assessment years 2013-2014 to 2017-2018 for action under the Black Money Act and Benami Act, in addition to reopening them under the Income Tax Act.

On black money and benami particularly, the note said suspected cases such as the high-risk foreign asset/income of these period should be assessed and assigned to officers for action.

“We are issuing notices. Quite a few have been issued so far in both matters. Even though action under Acts is not time-barred unlike tax evasion reopening cases, the instructions are to act in a time-bound manner,” said another official cited above.

On making these Acts time-bound, tax experts say that it would be reasonable because at present the department can go back 40 years.

“The government could consider making it 10 years as they have done in reopening matters of high-value transactions,” said an expert.

The Black Money Act was introduced in 2015 to nab those with undisclosed foreign income, and at the same time the Benami Act was also amended with stringent features to keep a check on illegal wealth/properties. Both have stiff jail terms as well as hefty penalties.

In reopening tax cases, the department issues notices in a standard format and asks the taxpayer to reassess income/loss and send it within 30 days.

In black money notices, the department seeks detailed information such as copies of all documents in respect of investment in a particular property which is under suspect, along with its agreement, sale deed, possession letter, etc.

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