I-T sleuths unearth ₹3,200cr TDS scam, arrests likely
447 Firms Used Deducted Sum To Further Their Business
C.Unnikrishnan@timesgroup.com 05.03.2018
Mumbai: The income tax department has unearthed a ₹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 companies in the Esplanade metropolitan magistrate court and in some of the cases, warrants have been issued, sources said. Under the Income Tax Act, the offences attract a minimum 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 ₹100 crore collected from his employees for business purposes. The others are from various sectors including movie production houses, infrastructure companies, startups and fly-by-night operators. An infrastructure company, part of a port development has diverted ₹14 crore, sources said. A multinational company, which provides information technology solutions has not deposited ₹11crore. A senior I-T official told TOI, “In the recent verification surveys carried out, it was detected that in about 447 cases, ₹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 timeframe. I-T has initiated recovery actions by attaching bank accounts besides movable and immovable assets, a source said. All sums deducted as TDS ought to be paid to the credit of the central government within seven days from the end of the month in which deduction is made or before the prescribed dates. The payments can also be made quarterly. “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. I-T also came across startups that functioned for a brief period and vanished into thin air. Officials also came across fly by night operators whose intention was not to carry out any genuine businesses.
The official said, “The employees found a mismatch when they filed returns. Several employees had lots of grievance to share,’’ the official added. Officials said it is not possible to hoodwink the system since everything is digitised.
CBI arrests 4 more, including NiMo’s auditor, ‘director’
New Delhi : The CBI on Sunday made four arrests in connection with the alleged ₹12,636 crore fraud at Punjab National Bank perpetrated by billionaire jewellers Nirav Modi and his uncle Mehul Choksi, officials said. The agency has arrested two employees and an auditor of the Nirav Modi group of companies, while a director of the Gitanjali group of companies owned by Choksi has also been taken into custody, they said.
Manish K Bosamiya, the then AGM (operations) of Firestarter International Ltd owned by Nirav Modi, and then finance manager Miten Anil Pandya were arrested for their alleged role in the preparation of applications for fraudulent Letters of Undertakings submitted to Punjab National Bank, they said.
Auditor Sanjay Rambhia, partner in the chartered accountancy firm Sampat and Mehta, Mumbai and then director of Mehul Choksi’s company Gili India, Aniyath Shiv Raman Nair, were also held in connection with the case. PTI
447 Firms Used Deducted Sum To Further Their Business
C.Unnikrishnan@timesgroup.com 05.03.2018
Mumbai: The income tax department has unearthed a ₹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 companies in the Esplanade metropolitan magistrate court and in some of the cases, warrants have been issued, sources said. Under the Income Tax Act, the offences attract a minimum 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 ₹100 crore collected from his employees for business purposes. The others are from various sectors including movie production houses, infrastructure companies, startups and fly-by-night operators. An infrastructure company, part of a port development has diverted ₹14 crore, sources said. A multinational company, which provides information technology solutions has not deposited ₹11crore. A senior I-T official told TOI, “In the recent verification surveys carried out, it was detected that in about 447 cases, ₹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 timeframe. I-T has initiated recovery actions by attaching bank accounts besides movable and immovable assets, a source said. All sums deducted as TDS ought to be paid to the credit of the central government within seven days from the end of the month in which deduction is made or before the prescribed dates. The payments can also be made quarterly. “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. I-T also came across startups that functioned for a brief period and vanished into thin air. Officials also came across fly by night operators whose intention was not to carry out any genuine businesses.
The official said, “The employees found a mismatch when they filed returns. Several employees had lots of grievance to share,’’ the official added. Officials said it is not possible to hoodwink the system since everything is digitised.
CBI arrests 4 more, including NiMo’s auditor, ‘director’
New Delhi : The CBI on Sunday made four arrests in connection with the alleged ₹12,636 crore fraud at Punjab National Bank perpetrated by billionaire jewellers Nirav Modi and his uncle Mehul Choksi, officials said. The agency has arrested two employees and an auditor of the Nirav Modi group of companies, while a director of the Gitanjali group of companies owned by Choksi has also been taken into custody, they said.
Manish K Bosamiya, the then AGM (operations) of Firestarter International Ltd owned by Nirav Modi, and then finance manager Miten Anil Pandya were arrested for their alleged role in the preparation of applications for fraudulent Letters of Undertakings submitted to Punjab National Bank, they said.
Auditor Sanjay Rambhia, partner in the chartered accountancy firm Sampat and Mehta, Mumbai and then director of Mehul Choksi’s company Gili India, Aniyath Shiv Raman Nair, were also held in connection with the case. PTI
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