Bimalanandan Mahapatra is a doyen among the tax practitioners. He took to taxation as a fish takes to water. He has been appearing before the High Court, the Tribunal and in the original side and appellate side too. He was vice-president of the All India Federation of Tax Practitioners (the apex body of the tax practitioners of India) for 2013-14 & 2014-15. He was the first president of the Bhubaneswar Tax Bar Association, and at present he is s national executive member of the All India Federation of Tax Practitioners. Besides being a member of the Bar Association and Orissa High Court Bar, he is the joint secretary (administration) of the All Orissa Tax Bar Association. His contribution Orissa Sales Tax Manual, 1998 has received wide reviews as a handbook for tax consultants. He has been nominated by the Regional Direct Taxes Advisory Committee Bhubaneswar by the CBDT and by the Commissioner Commercial Tax to the Range level Advisory Committee, Bhubaneswar. It is rewarding to watch Mahapatra delivering the best in State and national-level taxation seminars.
The recent income declaration scheme 2016 announced by the Government of India is an attempt to woo the black money hoarders and tax evaders to the mainstream of taxpayers. While economic observers opine that it is nothing but an attempt to coax and cajole the tax evaders, others are of the opinion that it is all intended as a maiden attempt by the Modi Government to galvanise and strengthen India’s economy from within; the disillusionment in the return of stashed foreign black money issue notwithstanding. Mahapatra while giving an interview to The Pioneer spoke to Sugyan Choudhury explaining the scheme for the larger benefit of taxpayers.
Could you please throw light on the recent income declaration schemeIJ
In the Finance Act 2016, the Government of India brought the Income Declaration Scheme, 2016 which has been provided in Chapter IX at Section 178 to 196. The Finance Minister in his Budget speech has emphatically said, “Our Government is fully committed to remove black money from the economy. Having given one opportunity for evaded income to be declared once, we would then like to focus all our resources for bringing people with black money to books.” With this emphatic word, the Government has introduced the Income Declaration Scheme, 2016. The scheme has come into force from June 1, 2016.
Who can make the declaration under the schemeIJ
Any individual, HUF, AOP, BOI, Firm, llP or company can make a declaration of undisclosed income or assets during the specified period (01/06/2016 to 30/09/2016).
Who then are debarred from making declarationIJ
Any person in respect of whom an order of detention has been made under the Conservation of Foreign Exchange and Prevention Smuggling Activities Act, 1974, any person prosecuted for an offence punishable under chapter IX or chapter XVII of the IPC, the Narcotic Drugs and Psychotropic Substances Act, 1985, the Unlawful Activities (Prevention) Act 1967 and the Prevention of Corruption Act, 1988. Besides, any person facing trial under offences relating to transactions in the Securities Act, 1992 is also debarred from the same. The scheme is not applicable in relation to any undisclosed foreign income and asset which is chargeable to tax under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. Declaration cannot be made in relation to any undisclosed income chargeable to tax under the income tax for any previous year relevant to assessment year 2016-2017 or earlier years where:
(a)Notice u/s.142, 143(2), 148, 153A or 153C of the Income Tax Act has been issued and the assessment for that year is pending.
(b)Search u/s.132 or requisition u/s.132A or survey u/s.133A of the Income-tax Act has been made in the previous year and notice u/s.143(2), 153A or 153C have not been issued and the time limit for issue of such notices has not expired.
(c)Information has been received by the competent authority under an agreement entered into by the Government u/s.90 or 90A of the Income-tax Act in respect of such undisclosed asset.
Which income or assets can be declaredIJ
Section 180 of the Finance Act provides the type of income to be disclosed such as:
(i)Income for which the person has failed to furnish return of income u/s.139 of the Income-tax Act.
(ii)Income which the person has failed to disclose in the return filed before 01/06/2016.
(iii)Income which has escaped assessment by reason of the failure on the part of the person to disclose the same.
(iv)Where such undisclosed income is held in the form of investment in any asset, the fair market value of such asset as at 01/06/2016 shall be deemed to be the undisclosed income. CBDT has issued the Income Declaration Scheme Rules, 2016. Rule 3 of these Rules provides for the method for determining the Fair Market Value of such assets.
(v)No deduction for any expenditure or allowance shall be allowed against the income which is undisclosed under the scheme.
What will be the mode and manner of declarationIJ
The declaration form under the scheme will be produced to the Chief Commissioner of Income Tax or the Commissioner of Income Tax who is authorised for it. The commissioner will give acknowledgement in Form 2 within 15 days from the end of the month in which the declaration is filed. The person is not authorised to make another declaration who has already filed a declaration under the scheme.
What are the immunity provisions extended in favour of the declarantsIJ
(i)The scheme provides for immunity from from proceedings under other Acts as under:
(a)Provisions of Benami Transactions (Prohibition Act), 1988, shall not apply in respect of the assets declared even if such assets exist in the name of Binamidar. This is subject to the condition that the Binamidar transfers the assets to the declarant on or before 30th September, 2017.
(b)No wealth tax shall be payable under the Wealth-tax Act in respect of any undisclosed cash, bank deposits, bullion, jewellery, investments or any other asset declared under the scheme.
(c)No Prosecution will be launched against the declarant under the Scheme in respect of any income/assets declared under the Income-tax or Wealth-tax Acts.
(ii)It is also provided that nothing contained in the declaration made under the scheme shall be admissible in evidence against the declarant under any other law for the purpose of any proceedings relating to imposition of penalty or for the purpose of prosecution under the Income Tax Act or Wealth Tax Act.
(iii)It may be noted that no immunity is provided in the scheme from proceedings under the Foreign Exchange Management Act, Money laundering Act, Indian Penal Code, Central Excise Act, Customs Act, Service-tax provisions, VAT provisions or other Acts.
How will the market values of the assets be determined under the ActIJ
As stated earlier, CBDT has prescribed “Income Declaration Scheme Rules, 2016” on 19/05/2016. Rule 3 deals with determination of Fair Market Value of the asset declared in Form No.1.