The countdown has begun. From the 1st of April, 2017 the Central Govt.’s steps for curbing black money is going to be more and more intense. The Government in the Finance Bill 2017 has inserted at least 40 amendments, which was duly passed as money bill in Lok Sabha. This includes key changes in the Income Tax Act which will provide sweeping powers to the officials of Income Tax Departments.
Sweeping Powers to Assessing Officers for Curbing Black Money
- One of the major changes the Finance Bill 2017 in respect of Income Tax is how the Department will be carrying out an IT raid without disclosing the reasons for it. The Income Tax Department won’t be required to substantiate on what ground an assessee is being scrutinized and why the assets and liabilities were evaluated.
Such amendments made in the Finance Bill 2017 also have become a political issue, which opposition is criticizing for bringing back ‘inspector raj’.
THE AMENDMENTS AND POLITICAL REACTIONS
Even a Junior Assessing Officer can take a Call on Search or Survey- Is our system mature enough to delegate such Liberal Powers?
Till now, the Commissioner of Income Tax Department could order a ‘survey’, whereas the director general could order a ‘search’. The director general of the IT Department authorizes tax officials to enter any residential premises of a concerned tax evader. With this amendment in the Finance Bill 2017, even a junior A.O. is empowered to take a call on conducting a ‘search’ or ‘survey’.
Fundamentally, an income tax official or assistant commissioner of the IT Department, who are 3 to 4 ranks lower than Principal Commissioner of the IT Department, can take a call on conducting a ‘survey’. An assistant director, meanwhile, is empowered to pass an order for conducting a ‘search’.
2. Now any Property can be Attached-
The second noticeable impact is the amendment to section 132 of the Income Tax Act 1961. Section 132 has been twisted so that anything can be ‘provisionally attached’. Now a tax official conducting a raid (survey) is being authorized to ‘seize or attach’ the property. The Income Tax Department now is authorized to raid the property of a charitable institution registered under section 12AA for seeking any information. Previously, a tax evader’s property could be ‘attached’ only after the pronouncement or order of the court with the comprehensive scrutiny of the evidence so collected.
While the Finance Bill 2017 duly passed in the Lok Sabha, the opposition parties raising objections on the said amendments made in the Finance Bill in the upper house. Interestingly, even if the upper house i.e. the Rajya Sabha downturns this amendment in the Finance Bill, it will be considered as a token gesture to register their ‘objections’. However, the Lok Sabha is empowered to reject or discard the directive of the upper house in case of a money bill.