A court under the Kamrup (M) District Judiciary has been notified as Special Court for prosecution of offences under the Income Tax Act, 1961.

The court of Munsiff No. 3 of the Judicial Magistrate 1st class has been notified by the Gauhati High Court.
District Munsif Court is a court of the lowest order handling matters pertaining to civil matters in the district. The state government or the State court also can notify the pecuniary limits for the District Munsiff Courts. It is under the charge of a munsiff magistrate/judicial collector.

According to highly placed sources in the Income Tax department, the move was necessitated due to rise in tax offences and to avoid inter-judiciary imbroglio.

“Several cases of income tax offences are filed in various courts and it gets hard to keep a track of these cases. It has become even harder as over the years, the number of such offences has also swelled up. With the setup of a special court, these confusions can be avoided. Any cases that falls under the IT Act’s periphery will be forwarded to this court where it will be easy to keep a track of the case and also initiate a speedy disposal of those cases,” the source said.
The IT department had approached the Gauhati High Court with the same request following which, the special court was notified last week.
In the financial year 2017-18, prosecution for 120 cases are going on against those who have conducted tax offences such as default in payment and collection of TDS, concealment of income, non-furnishing or late furnishing of income tax and abatement of false return statement.

Even though the IT department here has jurisdiction over the entire northeast region, the bulk of the cases are from Guwahati, the source revealed.

“There are only 7-8 income tax slabs in the entire region. Most of the offences happen in Assam. At least 70 per cent of the cases under prosecution are from in and around Guwahati,” the source revealed. 

According to Section 10 (26) of Income Tax Act, 1961, in the Northeast, members of scheduled tribes permanently residing in any area in the states of Nagaland, Manipur, Tripura, Arunachal Pradesh and Mizoram and in certain areas of Assam and Meghalaya (district councils or regional councils are created under the Sixth Schedule such as North Cachar Hills, Karbi Anglong and Bodo Territorial Council in Assam and Garo Hills, Jaintia Hills and Khasi Hills in Meghalaya) and generating income from within their respective states are exempted from paying income tax.

IT cracks whip against defaulters and money laundering cases

The Income Tax Department has issued notices against at least 300 bank accounts that saw a disproportionate deposit of over 1 crore during demonetisation asking to reveal the source of income.

The step was taken by the department under its Operation Clean Money campaign which was started on January 31, two months after demonetisation when the government had banned high denomination currencies 500 and 1000.

“We have identified 575 persons who had made deposits of over 1 crore in various accounts. Out of that, 110 have already complied and have proved the source of income. The department will be taking stern action against the rest accounts which will not be able to show the source of income,” the source revealed.

As many as 12,000 accounts were identified that had a sudden surge of money deposits over Rs 10 lakhs. Out of these, 2,700 persons have already complied while 9,700 are yet to reveal the source of income, the source said.
The accounts were identified by the department by its money trailing process in which, it makes a comparative study of the individual’s last year’s tax declarations and sources of income.

“If the people who had tried to launder money during the demonetisation by depositing in accounts have thought that it’s been a year and they are going to get away scot free, then they are wrong. Huge amount of money were deposited during the demonetisation and the scrutiny for those is still going on,” the source said.

On non-compliance to the notices, the persons will be prosecuted under the Prevention of Money Laundering Act, 2002.
In the financial year 2016-17 when the demonetisation happened, the IT department had conducted 30 searches and seizure in which, it had recovered 25 crores of cash and gold worth crores. It has also identified Rs. 450 crores of undisclosed money. 138 persons were booked under IT Act, 1961.

This year, 15 operations were conducted in which, Rs 10 crore in cash was recovered and Rs 500 crores of undisclosed money was identified.
This year, from various data bases such as mutual fund investments, stock purchases, bank statements, property documents etc, the IT department has identified at least 3 lakh persons who over a long period of time have not filed their income tax returns.

“The department has been knocking on their doors of these defaulters to file their return. Of these, 70,000 have complied while the rest have not responded yet. As many as 1.85 lakh such cases are under verification by the department. Stern actions will be taken against the defaulters,” the source said.

IT aims to supersede 2017-18 target of Rs 7000 crore tax collection

With only six working days left for the last date of paying tax on March 31 left, the Income Tax department of northeast region is hopeful of realizing more than its target.

“The target set for this financial year was 7000 crore and till now (Friday), the department has collected 6000 crore from this region. This gap of around 600 crore is expected to be plugged over the next six working days by way of extensive and intensive action for collection of advance tax, tax deducted at source (TDS) and self-assessment tax by the defaulters of more than 15 crore.
The northeast region has a tax payer base of about 6.54 crore, 70 per cent of which, are from Assam. So far, about 4 lakh have already paid their taxes.

“We are expecting that the rest 2 lakh will comply before March 31,” an IT official said.
The tax collection of the department has increased substantially over the last three years with the collection figure exceeding the target every year.

In 2015-16, the department had targeted 5122 crore and collected 5,200 crore. Last financial year, it set a target of Rs 5886 crore and collected Rs 6092 crore. This year, a 15 percent higher target was kept.

Certain measures by the IT department has attributed to the rise such as abolition of slabs in TDS return, reeling in the bulk Agricultural producers and the imposition of the amended Benami Property Act,2016.

“The farmers who produce in bulk and earn higher than the slabs have been brought under scrutiny, they will have to show the source of income and pay the equivalent tax,” the source said.

Regarding TDS, while last year, no cases were registered, at least 182 cases were filed for discrepancy in TDS and 125 persons were prosecuted and penalized.

Under the Benami Property Act, which was amended to thwart people purchasing property under the name of relatives to launder money, at least 10 cases have been registered by the department.