We will punish those who dare to expose tax dodgers: CBDT

To protect confidentiality of tax information from abroad, the CBDT has warned of stern action against those making unauthorised disclosures as it amounts to breach of treaty commitments and cause embarrassment to the government.

The Central Board of Direct Taxes (CBDT) said the confidentiality of taxpayers’ information has assumed a greater significance in view of “increased availability of information” regarding offshore tax evasion, tax avoidance and stashing of unaccounted money abroad. The information or evidence of such tax avoidance or evasion and the underlying criminal activity is often located outside the territorial jurisdiction and is obtained only through bilateral and multilateral cooperation amongst countries/jurisdictions, it said.

The government of a country/jurisdiction will, however, agree to exchange information with another country only if the information exchanged is kept confidential and used only for the specified purposes in accordance with the agreement.

The government will soon start getting more tax related information under the US law FATCA. That information too would have to be kept confidential. An Information Security Committee (ISC) has been constituted in the Central Board of Direct Taxes (CBDT) with a view to put in place a robust information security mechanism. It has also decided to set up a Local Information Security Committee (LISC).

“If an unauthorised disclosure takes place, the LISC should undertake an investigation and prepare a complete report, fixing responsibility and recommending actions to be taken against the person(s) concerned for the breach...,” CBDT said.

The CBDT further said that the files/documents classified as top secret/secret/confidential/restricted need to be safeguarded since their authorised access or disclosure “may cause embarrassment to the government and result in breach of treaty commitments”.