IT Dept verifying 394 entities, 36 professionals for money sent abroad
New Delhi, Aug 18: The Income Tax Department is verifying 394 entities and 36 professionals over suspected irregularities in large amounts of money sent abroad during the past three years, the Central Board of Direct Taxes (CBDT) said on Tuesday.
Of the 394 entities being examined, 117 are located in states sharing land borders with India, the CBDT said.
The exercise covers entities that sent large amounts of money abroad despite reporting very little business activity or not filing income-tax returns. The department is also checking the role of professionals who certified these foreign payments.
The department’s data analysis found that some entities had sent large amounts abroad for purposes such as freight, software imports and consultancy services, even though the payments appeared disproportionate to their reported business.
Some of the entities were also found not to be operating from the addresses declared by them.
The department is also examining a group of professionals who issued a large number of Form 15CB certificates. A Form 15CB is a certificate issued by an accountant stating whether tax is payable on a particular payment being sent outside India.
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The foreign remittances were received by a cluster of entities, raising questions about whether the transactions were genuine and whether proper checks were carried out before the payments were certified, the department said.
The development comes after an earlier search by the department uncovered a network allegedly involved in providing “accommodation entries” through bogus donations and contributions to fictitious charitable trusts.
An accommodation entry is essentially a paper transaction created to make unaccounted money appear to have come from a legitimate transaction. For example, a transaction may be shown as a genuine donation, loan or investment even though the underlying transaction is not genuine.
The department said its investigation is now examining the entities involved in the foreign remittances, the people behind them and the professionals who certified the transactions.
It said accountants issuing Form 15CB and other certificates are expected to carefully examine the underlying transactions and supporting documents before certifying them. Further investigation is underway. (BVI)
