The government on Thursday said it would make tax evasion a criminal offence and prosecute offenders. “In its crusade against black money and with a view to have credible deterrence against generation of black money, the government has shifted the focus to successfully prosecute offenders in the shortest possible time,” the finance ministry said in a statement.
The income tax department conducted searches in 414 groups and seized undisclosed assets of Rs. 582 crore and income worth Rs. 6,769 crore in the first nine months of 2014-15. “During the current year, 628 prosecution complaints have been filed up to December 2014... 56 relate to offences concerning undisclosed foreign income. The undisclosed income detected as a result of further enquiries is, however, much more,” the statement added.
Besides, 1,174 surveys conducted up to November 2014 led to the detection of Rs. 4,673 crore more in undisclosed income.
“Willful attempt to evade tax is a serious offence punishable under section 276C of the Income Tax Act, 1961 with imprisonment up to seven years and a fine,” it said.
The special investigation team on black money headed by justice MB Shah had suggested making income-tax evasion a criminal offence. Shah had said such a shift in focus would add more teeth to the pursuit of black money, not just kept abroad but also within the country.
At present, tax evasion is dealt with under the I-T Act while forex violations come under the Foreign Exchange Management Act — both laws civil in nature — and offenders can end proceedings against them by paying a penalty.
Only failure to pay service tax, in certain specific situations, and excise duty are considered criminal offences.