NEW DELHI, Feb 7:
In a bid to check filing of incorrect returns by CAs, the tax authority will impose Rs 10,000 fine on such professionals to deter such act.
“Under Section 271J… We have entrusted responsibility with chartered accountants, valuers and merchant bankers who files audit, valuation reports and other things… So, if they file any incorrect information in the returns, they are also liable for a token penalty of Rs 10,000,” CBDT Chairman Sushil Chandra said.
The whole system is based on “a lot of faith on CAs and assessees and they have to be more responsible”.
“Various provisions exist to penalise the defaulting assessees in case of furnishing incorrect information. However, there exists no penal provision for levy of penalty for furnishing incorrect information by the person who is responsible for certifying the same,” the budget memorandum said.
“In order to ensure that the person furnishing report or certificate undertakes due diligence before making such certification, it is proposed to insert a new section (271J in the Act) so as to provide that if an accountant or a merchant banker or a registered valuer, furnishes incorrect information in a report or certificate, the assessing officer or the commissioner (appeals) may direct him to pay a sum of Rs 10,000 for each such report or certificate by way of penalty,” it said.
Chandra further said that the objective of the budget is improve tax compliance along with increasing tax base and improving ease of doing business.
Despite having a low tax, non compliance level is high, he said, adding that Indians named in various black money reports, including Panama Papers, are among the highest.
He pointed to high level of evasion of tax and tendency to export the black money to foreign shores in spite of having global practices and standards, emphasising that this has to come down.
“The department has done its bit, now it’s time for the taxpayers to show their respect to the law of land,” he said in a post-Budget interaction with PHD Chamber.
On long-term capital gains tax, he said the Budget has tried to plug gaps.
In the last few years, the tax department has detected Rs 80,000 crore sale consideration through penny stock mechanism, the CBDT chief said, adding that this was used for conversion of black money into white.
However, “neither we have changed capital tax regime nor we have changed any law. So, whosoever was getting the benefit of long-term capital gains through ESOP, IPO and FPO is not going to change”.
Nothing is going to change except misuse, he clarified. (PTI)