Confidentiality in VDIS 8217;97 cannot be ensured 8212; CAG

The declarants were required to deposit the tax in the designated banks and their branches and the 8220;officers and staff of these banks cannot be considered as employed in the execution of the Income Tax Act or the Wealth Tax Act.8221;

Since these banks also maintained a register to depict the names and amount received from the declarants, the amount declared by any person could be easily made out from the level of tax paid in these banks.

8220;Thus the procedure for receipt of tax amount necessarily reckoned the staff and officers of the banks to maintain confidentiality,8221; says the report.

On the secrecy clause, the report said though it may have its advantage vis-a-vis the declarants who wish to make a clean record of all the guilt of past years, it afforded an opportunity to several others for manipulations to their advantage.

The report says it was provided in the scheme that secrecy provisions would be applicable only to those declarations which are complete in all respects and which meet the specific criteria.

The issue for audit examination was the applicability of secrecy provision in the case of declarations where full tax and or interest have not been paid.

8220;It was noted in the field of examination that the Income Tax Department had taken practically no action on the declaration with nil income tax payments,8221; says the report.

In fact in most of the commissionerates of income tax all these declarations were being guarded as confidential and information contained therein was not shared with the respective officers, the report observes.

Even with regard to officers and staff of the income-tax department, Section 72 of the scheme itself provides that the particulars contained in the declarations could be disclosed to persons executing the duties under the Income Tax Act or Wealth Act.

Furthermore, under Section 78 of the Finance Act, 1997, the voluntarily disclosed income was not to be included in the total income of the declarant for any assessment year subject to certain conditions.

It is subject to the fact that 8220;the declarant credits such amount in the books of account, if any, maintained by him for any source of income or in any other record and intimates the credit so made to the assessing officer.8221;

8220;Implicit in this provision is a communication from the declarant to his assessing officer regarding the disclosure and the amount thereof,8221; says the report.