The income tax department has detected undisclosed income worth over Rs 1 lakh crore in FY14 from its search and survey operations, almost double of what it detected in the previous year.
According to a source, “prima facie amount found after the search and surveys operations are way over Rs 1 lakh crore. However, we are awaiting the replies from some of these assessees and after getting their explanation the amount may come down too”.
The data collated by the department shows that undisclosed income worth Rs 10,791.63 crore was found from search operations while Rs 90,390.71 crore was detected in survey operations conducted across the individuals, corporates and firms, the source said.
The department conducted 5,327 surveys in FY14 compared to 4,630 surveys conducted in FY13.
The source said that a major portion of the allegedly undisclosed income is from just one company in the energy sector, which faces a potential tax demand of several thousand crores of rupees. “Though the search and survey operations have disclosed the concealed income, the tax demand on such income might be lower,” the source explained.
In FY13, the department had found a total of Rs 29,628 crore during the raids. Further, the source said that 4,503 warrants were executed during the FY14 compared to 3,889 warrants in FY13.
Concerned over the rise in the undisclosed income, the department has drawn up an action plan for FY15 for conducting surveys more effectively.
“Surveys could be used as a tool for augmenting tax collections effectively. The cases for conducting surveys should be selected with due diligence and in a professional and transparent manner. In this regard, a close coordination between the assessment wing and the TDS wing and vice-versa will be helpful in identifying potential cases. The aim and purpose of survey operations, besides verification of specific facts, should be to detect tax evasion,” the department has said in its action plan.
In the Budget 2014-15, the government has tried to tighten its scanner on tax evaders. It has widened the scope of power of income tax officials with regard to survey, inquiry and provisional attachment of the assets.
While income tax officials will be able to call for information from assessees for verification without obtaining prior approval of chief commissioners, they can also keep documents and books of accounts seized during a survey to a period of 15 days from the current time of 10 days.
The department, in its action plan, has also laid down standard operating procedure for selecting a case for survey which includes cases in prosecution list, trend of TDS payment in stark contrast to other deductors in similar business; cases showing negative trend in payment; cases huge disallowance; habitual late filers or non filers of TDS statement; negative growth in TDS payment as against healthy growth in advance tax payment; analysis of newspaper reports and information available through Internet.
As such, the government has already set up a special investigation team (SIT) on issues related to black money under the chairmanship of retired Supreme Court judge MB Shah.
The first meeting of the SIT was held last month and the SIT has asked the income tax department to furnish information collected from various raids.
* Data collated by the I-T department shows that undisclosed income worth Rs 10,791.63 crore was found from search operations while Rs 90,390.71 crore was detected in survey operations
* The department conducted 5,327 surveys in FY14 compared to 4,630 surveys conducted in FY13
* An income tax source said that a major portion of the allegedly undisclosed income is from one company in the energy sector. The I-T department has drawn up an action plan for conducting surveys more effectively