Tax evaders beware! I-T dept tightens noose around those ignoring notices

The Income Tax department has launched a nationwide campaign to identify people who have deliberately chosen to ignore the notices calling for enquiry and verification of the tax returns, to catch tax evaders and collect due taxes and penalties from them.

Sources in the revenue department say that the Income Tax Department has identified a noticeable number of persons who have deliberately chosen to ignore the notices calling for enquiry and verification of the tax returns. These persons have ignored emails, SMSes and even the physical notices in some cases.  

However, say sources in the revenue department, that it would be difficult for them to avoid outreach of the Income tax department as the technology driven Faceless Assessment Scheme has been operationalised.

The tax department has detected around 6,000 such cases where the individuals have ignored I-T notices in an apparent bid to escape from the rigours of law.  

In one of such cases, an individual at Rajkot, Gujarat who showed his income for less than Rs 5 lakh a year has the bank accounts with cash deposits of nearly Rs 10 crore and cash withdrawal of Rs 7.5 crore. This person did not respond to six notices, over 10 SMS alerts and other means to contact him. A survey operation was conducted during which the individual was not traceable and the business premises shown in the income tax return was of someone else. His home was traced from the bank but he appears to have absconded. Now, the process to attach his bank account and other assets has been initiated.  

Sources say these unscrupulous tax evaders have probably mistaken the taxpayer facilitating approach of I-T department to mean laxity in follow-up action but the department is quite watchful with non-intrusive means of data analytics and AI and machine learning and it won't be possible for a dishonest tax evader and fraudsters to escape from the tech-driven tax system.  

A Ministry of Finance official says on the condition of anonymity that the I-T department is committed to honour the honest taxpayers while penalise the tax evaders. He cites a case in Mumbai in which an individual mentioned his income for less than Rs 5 lakh a year but made cash deposits worth Rs 12 crore. Later, pre-survey examination revealed cash deposits were of about Rs 60 crore. During the survey, diaries were impounded as the individual does not maintain books of accounts. Further enquires are underway to pinpoint the source of cash.

Similarly, in yet another case, an individual from Alwar, Rajasthan had deposited Rs 27 crore cash in his bank account in FY 2017-18 and Rs 22 crore in FY 2019-20, although he had shown his income in the range of Rs 3-5 lakh. The individual now under survey is being investigated, say sources, adding that the Faceless Assessment Scheme along with improved Form 26AS and pre-filled ITRs is robustly tuned to make a distinction between honest taxpayers and deliberate tax evaders/ fraudsters and the I-T department would not hesitate to take required coercive actions against non-responding persons and tax evaders who have misused the trust reposed on them.

Sources say the Faceless Assessment Scheme is a data driven model of tax compliance. It presumes a voluntary and honest conformity with tax laws by the persons and is based on aggregation of financial transactions of a taxable entity that are collected by the various regulatory and facilitation agencies like the sub-registrars of properties or the banks and other NBFCs and being shared with the income tax department. It's just not possible to dupe the tax administration now fastened with the Faceless Assessment System, says the source.

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