As the dates for depositing now defunct notes of Rs 1,000 and Rs 500 are getting closer, people are coming up with new tricks to ‘safeguard’ their undisclosed incomes. In a latest disclosure, it has come to the notice of the Central Board of Direct Taxes (CBDT) that assessees are misusing the provision of revising Income Tax returns by “drastically” altering the forms to revise their income.
Cracking the whip against all such errant taxpayers, the CBDT on Wednesday has issued a stern warning saying that the department would scrutinise all such I-T returns found with major “alteration” in their forms and they will face penal action.
The worry of the CBDT is its clause which allows a taxpayer to revise their return after he realises that he has missed reporting an income or deduction while filing his Income Tax Return for the previous fiscal.
As per the provision, in that case, one gets the option of filing a revised return only if the taxpayer had filed the original return before the due date — July 31 — of the financial year.
“The provision to file a revised return has been stipulated for revising any omission or wrong statement made in the original return of income and not for resorting to make changes in the income initially declared so as to drastically alter the form, substance and quantum of the earlier disclosed income,” the CBDT said in a statement.
Explaining about the provision, Sanjay Rai, a Chartered Accountant, said: “The Section 139(5) of the I-T Act permits revision in return form if a taxpayer omits mistake, but it can’t be misused for ‘parking’ unaccounted money. If a taxpayer has mentioned some amount of cash in hand in the return form and if he alters his form by showing more than what he was originally possessing the cash, that alteration would come under the scrutiny.”
“Any instance coming to the notice of the I-T department which reflects manipulation in the amount of income, cash-in-hand, profits, etc and fudging of accounts may necessitate scrutiny of such cases so as to ascertain the correct income of the year and may also attract penalty and prosecution in appropriate cases as per provision of law,” the CBDT said.