Fast-track prosecution cases against shell cos: CBDT to taxmen
As the noose tightens around shell companies evading taxes, the CBDT Chairman has asked field officers to file prosecution cases against those entities which claimed bogus long-term capital gains.
In a letter to Principal Chief Commissioner of Income Tax, Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra has called for fast track prosecution proceedings in cases where the Settlement Commission has rejected entry operators who have claimed advantages of long-term capital gains.
"Prosecution proceedings can be successfully initiated in several cases of entry operators, including those concerning bogus LTCG (Long Term Capital Gains) claims, cases rejected by Settlement Commission, etc," Chandra said.
The Prime Minister's Office last month has set up a task force under Revenue Secretary Hasmukh Adhia comprising members from central probe and enforcement agencies to monitor action against deviant shell companies.
According to the tax department, there are about 15 lakh registered companies in India of which only 6 lakh file annual returns. This means a large number of these companies could be indulging in financial irregularities.
While the Serious Fraud Investigation Office (SFIO) has filed cases against 49 shell companies, Rs 3,900 crore is believed to have been laundered by 559 persons with the help of 54 professionals. Also, Rs 1,238 crore cash has been deposited in shell or dormant companies, post-demonetisation.
The I-T department is taking steps to plug loopholes in the law and deter people from wrongly availing capital gains benefits.
With bogus capital gains of Rs 80,000 crore availed by shell companies last year coming to the notice of the I-T department, the Budget 2017-18 has proposed 10 per cent long-term capital gains tax on those who acquired shares in unlisted companies after October 1, 2004, if they had not paid securities transaction tax (STT) at the time of purchase.