I-T Dept launches nationwide probe into suspicious foreign remittances

The Income Tax (I-T) Department has launched a nationwide verification exercise into suspicious foreign remittances after identifying entities that allegedly transferred large amounts overseas despite reporting little or no turnover, the Central Board of Direct Taxes (CBDT) said on Wednesday.The action followed ground intelligence and analysis of outward foreign remittance data for the past three years. During a search operation targeting fictitious charitable trusts allegedly involved in providing accommodation entries against bogus donations, the department uncovered a network of entities suspected of remitting funds abroad.
According to agency reports, preliminary verification found that several remitting entities were either non-filers or had reported very low turnover in their income-tax returns. The department said there appeared to be no correlation between their reported business activity and the large sums sent overseas.The stated purposes of the remittances, including freight payments and imports of software and consulting services, also did not appear consistent with the entities' financial profiles. Further ground-level intelligence found that some entities were not operating from their declared addresses, the CBDT said.The investigation also flagged a large number of Form 15CB certificates issued by a relatively small group of professionals, while the remitted funds were received by a clustered group of entities.

The Income Tax Department has launched a nationwide verification exercise into suspicious foreign remittances. The exercise follows data analysis and ground intelligence indicating significant overseas remittances by entities with little or no reported business activity.

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On Tuesday, the department launched a detailed nationwide verification exercise covering shell entities, persons behind them and professionals who issued Form 15CB certificates. Entities in districts along India's land borders that had remitted significant amounts overseas have also been covered.The verification has so far covered around 394 entities, including 117 in states along India's land borders, and 36 professionals, the CBDT said.The department stressed that accountants issuing Form 15CB/Form 146 certificates are required to exercise due care, diligence and professional judgment while examining underlying transactions and relevant documents.“Further ground-level intelligence revealed that these entities were not actually operating from the addresses declared by them,” the department said.Further investigation into the suspicious foreign remittances is underway, the CBDT said.