Lok Sabha Question No. 1710 (UNSTARRED), answered on 2016-11-25
Subject: Tax Evaders
Ministry: FINANCE
Asked by: NALIN KUMAR KATEEL, RANJANBEN BHATT, DODDAALAHALLI KEMPEGOWDA SURESH

(a):

## Direct Tax

The Income Tax Department collects information regarding tax evasion from various sources which is an on-going process. Appropriate action under direct taxes laws is taken on such information which includes sending  notices,  conducting  enquiries,  surveys,  searches,  assessment  of  income,  levy  of  tax,  interest, penalties, etc. and filing of prosecution complaints in criminal courts, wherever applicable. The tax, interest and penalties, forming part of the total liability of each assessee, are enforced as per law. However, tax evasion is established only after finalization of assessment orders, inter alia, by way of appeals before all appellate authorities, including the Hon'ble Supreme Court.

Details regarding the amount of tax recovered in all such cases are not maintained centrally. However, the data of search & seizure and surveys conducted in the last 3 years and the current year, alongwith preliminary outcome thereof is as under:

| Financial Year                |   Number of groups searched |   Total assets seized (In Rs. crore) |   Undisclosed income admitted u/s 132(4) of the Income-tax Act, 1961 [in Rs. crore] |
|-------------------------------|-----------------------------|--------------------------------------|-------------------------------------------------------------------------------------|
| 2013-14                       |                         569 |                               807.84 |                                                                            10791.6  |
| 2014-15                       |                         545 |                               761.7  |                                                                            10288    |
| 2015-16                       |                         445 |                               712.68 |                                                                            11066.2  |
| 2016-17 (upto October, 2016)* |                         252 |                               569.41 |                                                                             7699.74 |

*Provisional

## Government of India Ministry of Finance Department of Revenue

## LOK SABHA UNSTARRED QUESTION NO. 1710

TO BE ANSWERED ON FRIDAY, NOVEMBER 25, 2016 AGRAHAYANA 4, 1938 (SAKA)

## TAX EVADERS

## 1710: SHRI NALIN KUMAR KATEEL: SHRIMATI RANJANBEN BHATT: SHRI D.K. SURESH:

Will the Minister of FINANCE be pleased to state:

- (a) whether Government has sent notices to the tax evaders, if so, the details thereof along with the amount of tax recovered thereon during the last three years and current year;
- (b) whether Government is aware of high value transactions taking place without PAN card; and
- (c) if so, the details thereof and the steps taken to make PAN mandatory for such transactions?

## ANSWER MINISTER OF STATE IN THE MINISTRY OF FINANCE (SANTOSH KUMAR GANGWAR)

## Surveys:

| Financial Year                |   No. of surveys conducted |   Undisclosed income detected (in Rs. crore) |
|-------------------------------|----------------------------|----------------------------------------------|
| 2013-14                       |                       5327 |                                     90390.7  |
| 2014-15                       |                       5035 |                                     12820.3  |
| 2015-16                       |                       4422 |                                      9654.8  |
| 2016-17 (upto October, 2016)* |                       4233 |                                      7526.42 |

## *Provisional

## Indirect Tax

In  instances,  where default in payment of Central Excise duty, Customs Duty or Service Tax due to non-payment, or short payment of duty/tax or delayed payment of duty/tax or duty/tax evasion or incorrect availment / utilization of CENVAT credit is detected, a Show-Cause Notice is issued. The Show-Cause notices (SCNs) are adjudicated and where the demand is conferred, the same has to be recovered.  The Show-Cause Notices issued during the last years are as under:-

|                           | (Rs. In crore)   | (Rs. In crore)   | (Rs. In crore)   |
|---------------------------|------------------|------------------|------------------|
| Year                      | Central Excise   | Duty             | Service Tax      |
| 2013-14                   | 1789             |                  | 4288             |
| 2014-15                   | 1488             |                  | 3402             |
| 2015-16                   | 1614             |                  | 3545             |
| 2016-17 (upto Sept, 2016) | 722              |                  | 1594             |

The details of cases detected / booked for Customs related offences are as under:-

## (Rs. In crore)

| Year                         | Outright Smuggling Cases   | Outright Smuggling Cases   | Commercial Fraud Cases   | Commercial Fraud Cases   |
|------------------------------|----------------------------|----------------------------|--------------------------|--------------------------|
|                              | No. of cases               | Value of goods seized      | No. of cases             | Duty Evasion detected    |
| 2013-14                      | 27519                      | 1555.44                    | 4625                     | 3974.14                  |
| 2014-15                      | 20218                      | 1793.42                    | 1926                     | 4470.34                  |
| 2015-16                      | 38259                      | 2049.24                    | 3198                     | 3609.84                  |
| 2016-17 (upto October, 2016) | 25172                      | 1165.48                    | 1297                     | 757.04                   |

The recovery of arrears of Indirect tax arrears during the last three years and the current year is as below:-

## (Rs. in crore)

| Year   | Central Excise Duty   | Customs Duty   | Service Tax   |
|--------|-----------------------|----------------|---------------|

| 2013-14*                  |   2880.82 |   3835.71 |   7310.95 |
|---------------------------|-----------|-----------|-----------|
| 2014-15                   |   1615.88 |    950.86 |    900.7  |
| 2015-16                   |   1690    |    825.19 |   1564.75 |
| 2016-17 (upto 30.09.2016) |    790.44 |    343.44 |    537.81 |

*Data for  year  2013-14 includes Spot recovery (pre-adjudication) since 2014-15 onwards these spot recoveries (Pre-adjudication recoveries) have not been included  in arrears as these are not confirmed demands and hence do not qualify as arrear recovery.

The amount recovered does not necessarily relate to SCNs issued during the corresponding period as the adjudication thereof by the competent authority may take time.

(b) & (c):

## Direct Tax

The Government is aware of the high value transactions taking place without PAN Card and as per the latest  Annual  Information  Return  (AIR)  furnished  for  F.Y.  2015-16  under  Rule  114E  read  with  section 285BA, 15.22% of total transactions reported in respect of specified transactions do not have a valid PAN.

The steps taken to make PAN mandatory includes recent amendment made in the Rules 11B, 11C and 114D of Income Tax Rules, 1962 effective from 01.01.2016, which are briefly explained below:

- i. As per Rule 114B, it is mandatory for a person to quote PAN in respect of all specified transactions exceeding the specified monetary value. There are 18 different kinds of transactions specified with monetary value for which PAN quoting has been made mandatory. Where a person does not have a PAN he is required to give particulars of his identity and address in the prescribed Form 60.
- ii. Rule 114C now requires that the person with whom the transaction is made in relation to Rule 114B, shall  ensure  after  verification  that  PAN  has  been  duly  and  correctly  mentioned  or  a  declaration  in Form 60 has been duly furnished with complete particulars, as the case may be.
- iii. Rule 114D now requires that person with whom the transactions is made in relation to Rule 114B, shall furnish a statement in Form 61 w.r.t. Form 60 declarations made by transacting parties online to Intelligence and Criminal Investigation Wing of the Income-tax Department. The statement is required to be furnished  twice a year by 31 st Oct in respect of declarations received up to 30 th September, and 30 th April in respect of declarations received up to 31st March.'

## Indirect Tax

Registration in Central Excise and Service Tax is PAN based, which is to be mentioned by the assessee / service provider on their invoices/ bills.

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