Income Tax Dept warns public against cash dealings of Rs 2 lakh or more saying that the receiver of the amount will have to cough up an equal amount as penalty. CBDT further extends the time for Linking PAN with Aadhaar from 31st December 2017 to 31st March 2018.

I-T sleuths unearth Rs 3,200 crore TDS scam; 447 firms in dock

MUMBAI: The income tax department has unearthed a Rs 3,200 crore scam where 447 companies deducted tax from its employees but did not deposit with the government and diverted to further their business interests. 

The TDS wing of the I-T has initiated prosecution against these firms and in some cases, warrants have been issued, sources said. Under the Income Tax Act, the offences attract a minimum punishment of rigorous imprisonment of three months to a maximum of seven years with fine. Prosecution is initiated under Section 276 B. 

I-T is contemplating adding IPC Sections of cheating and criminal breach of trust as this act amounts to duping its employees, sources said. The offenders mainly include builders with one of them, a leading and politically connected, diverting Rs 100 crore collected from his employees for business purposes. 

The others are from various sectors including movie production houses, infrastructure companies, start-ups and fly by night operators. An infrastructure company, part of a port development has diverted Rs 14 crore, sources said. An MNC, which provides IT solutions has not deposited Rs 11 crore. 

An I-T official told TOI, “In the recent verification surveys carried out, it was detected that in about 447 cases, Rs 3,200 crore was deducted by the companies but not deposited into the government account.’’ This is for the period April 2017 to March 2018. “We also intend to arrest some of them,’’ the official added. 

These companies are under a legal obligation under the Income Tax Act to deduct TDS on behalf of the government and deposit it into the government account within a prescribed time frame. 

I-T has initiated recovery actions by attaching bank accounts besides movable and immovable assets, a source said. “In several of the cases, they diverted the money towards working capital. Some apologised and promised to pay while some said they could not pay because of adverse market conditions. In some cases, of the amount collected from the employees, 50% was deposited with the government and the balance misused by the employer,’’ an official explained. 

Officials said it not possible to hoodwink the system since everything is digitised. 

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