In the last video-conference of tax department held on Saturday before the end of the four-month long black money compliance window on September 30, officials were directed to take recourse of Section 273A of the Income-tax Act to facilitate easier disclosures under the scheme. Section 273A of the Income-tax Act deals with power of tax authorities to reduce or waive penalty in certain cases.
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As per Section 273A, the Principal Commissioner or Commissioner may, in his discretion, reduce or waive the amount of penalty imposed or imposable on a person under if he is satisfied that such person prior to the detection by the assessing officer, of the concealment of particulars of income or of any inaccuracy furnished in respect of such income, made full and true disclosure of such particulars voluntarily and in good faith and has also co-operated in any enquiry relating to the assessment of his income and has either paid or made satisfactory arrangements for the payment of any tax or interest payable in respect of the relevant assessment year.
In a case the amount of income in respect of which the penalty is imposed or imposable for the relevant assessment year, the aggregate amount of such income for those years, exceeds a sum of Rs 5 lakh, no order for reducing or waiving the penalty shall be made by the Principal Commissioner or Commissioner without the previous approval of the Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General, as the case may be.
“The section was highlighted to the tax officials in the video conference in one of the many steps being enlisted for encouraging tax evaders to come clean under the Income Declaration Scheme,” a senior tax department official said, adding that the taxpayers can avail this facility under section 273A only once in a lifetime.
Also, there were concerns raised by some penny stock traders, who felt that if they have been served a tax notice for a particular year, then they can opt for litigation route for previous financial years as well rather than going for disclosures under the black money compliance window, another official said. Waiving of penalty under this section will help attract tax evaders to come clean under the compliance window, the official added.
In its scrutiny of high-value transactions, the tax department had earlier this year asked BSE and NSE for data relating to penny stocks for detection of illegal money flow. The stock exchanges have subsequently been monitoring scrips for unusual price movements to stop flow of black money into stock markets.
Last year, Kolkata’s investigation wing had detected penny stock companies whose share prices were artificially increased through transactions intended to convert black money into white. Following that probe, around 15,000 penny stock traders across the country are under the scanner of tax department.
The Central Board of Direct Taxes (CBDT) in July also had said that the I-T department would issue 7,00,000 letters seeking PAN details for high-value transactions. The department had identified 7 lakh high-risk clusters having around 14 lakh non-PAN transactions after evaluating about 90 lakh high-value transactions for 2009-10 to 2016-17.