Drastic changes in revised tax returns will invite action: Finance Ministry
New Delhi, Dec 14 (IANS) Any drastic alterations in revised income tax returns may call for strict action as people may try to misuse it post-demonetisation to declare their unaccounted cash, the Finance Ministry said on Wednesday.
“It is brought to the notice of tax payers that any instance coming to the notice of the Income Tax Department, which reflects manipulation in the amount of income, cash in hand and profits etc., and fudging of accounts may necessitate scrutiny of such cases so as to ascertain the correct income for the year. It may also attract penalty/prosecution in appropriate cases as per the law,” said a ministry statement.
Post-demonetisation, some taxpayers may misuse this provision to revise the income return filed by them for the earlier assessment year, with an intention to show the current year’s undisclosed income (including unaccounted income held in the form of demonetised currency in the current year) in the earlier return, it said.
“It is hereby clarified that the provision to file a revised return of income has been stipulated for revising any omission or wrong statement made in the original return and not to make changes in the income initially declared so as to drastically alter the form, substance and quantum of the earlier disclosed income,” the statement said.
Under the existing provisions of Section 139 (5) of the Income Tax Act, 1961, the revised return can only be filed if any person discovers any omission or any wrong statement therein.
“The clarification is issued in order to curb cases wherein the tax evaders may try to declare their undisclosed cash. Given this, it can be said that government does not want give any room to the assessee to convert black money into white without paying appropriate tax and penalty,” member of Institute of Chartered Accountants (ICAI) Pritam Mahure told IANS.