The Income Tax department is strengthening its investigation arm to probe unusual banking transactions and deposits witnessed in the last one month and to help ferret out unaccounted wealth including the new currency notes by conducting raids on suspected persons across the country.
Instructions have been issued to all divisions in the country to identify and send officers and staff to the investigation arm on deputation. This would be effective December 15, 2016, according to people familiar with the development.
Confirming this, a spokesperson for the Central Board of Direct Taxes (CBDT) said: “Director Generals have been asked to allocate officers and staff from other departments to the investigation department on a temporary basis. Though there is a shortage of people in every department, currently we need more people in the investigation department. Director Generals will decide as to how many people will be shifted.”
Though no quota has been fixed, approximately 50 per cent of the 8,000 personnel and officers of the Mumbai division are set to be shifted to the investigation arm, where they would be deployed to probe and send notices to people needing to explain fresh deposits in their bank accounts.
Besides, officers would be needed to calculate the taxes and penalty for those people whose accounts had received undeclared deposits since November 10, 2016. A leading IT company is believed to have been asked to develop a software to catch unusual banking transactions to help in the assessment process.
Income tax officers said that searches and raids would intensify after December 15 and that they were preparing for this.
“This would continue till end of March,” an official, who did not wish to be identified, said. The window for depositing old notes ends on December 30, 2016 and after that one can deposit the banned notes at RBI counters till the end of March 2017.
Jewellers, especially those who conducted unusually high volume of business after the withdrawal of high-denomination currency notes were likely to come under the scanner as part of the investigation.
“Tax evaders and people with black money have managed to convert large part of their money into new currency notes and precious stones including diamonds,” the tax official said. “They seemed to have outsmarted the government with the help of bank officials. The recent raids in Delhi and Chennai have validated this. Now the focus would shift to investigations,” the officer added.
Once the investigation arm is strengthened, the respective Director Generals of Income Tax department would decide the nature of investigation on various categories of targets.
The Centre is also mulling an option to recruit a large of number of people in the Income Tax department including rehiring retired personnel to carry out investigations, according to officials.
