Tax Payers now don’t have to succumb to Coercion and admit Undisclosed Income

Traditionally since ages Income Tax Officers have been harassing tax payers and coercing them to admit to undisclosed income.

Not any more now, Well, May be. The CBDT has issued a letter dated 18.12.2014 pointing out that instances/complaints of undue influence/coercion have come to its notice and that it is noted that assessees were coerced to admit undisclosed income during Searches/Surveys conducted by the Department.

Such admissions made under undue pressure had been retracted later on and could not be proved due to lack of evidence.

While showing the department in poor light and proving the high handed attitude of the department, such instance fail to do any good to revenue.   The CBDT has drawn attention to earlier Instructions and Guidelines issued by the CBDT from time to time through which the Board has emphasized upon the need to focus on gathering evidences during Search/Survey and to strictly avoid obtaining admission of undisclosed income under coercion/undue influence.

The CBDT has also issued the warning that any instance of undue influence/coercion in the recording of the statement during Search/Survey/Other proceeding under the I.T.Act,1961 and/or recording a disclosure of undisclosed income under undue pressure/ coercion shall be viewed by the Board adversely.

The Text of the CBDT Notification  is given below-

Subject: Admissions of Undisclosed Income under coercion/pressure during Search/Survey – reg.

Sir/Madam,

Instances/complaints of undue influence/coercion have come to notice of the CBDT that some assessees were coerced to admit undisclosed income during Searches/Surveys opriducted by the Department. It is also seen that many such admissions are retracted in the subsequent proceedings since the same are not

backed by credible evidence. Such actions defeat the very purpose of Search/Survey operations as they fail to bring the undisclosed income to tax in a sustainable manner leave alone levy of penalty or launching of prosecution.

Further, such actions show the Department as a whole and officers concerned inpoor light

2. I am further directed to invite your attention to the Instructions/Guidelines issued by CBDT from time to time, as referred above, through which the Board has emphasized upon the need to focus on gathering evidences during

Search/Survey and to strictly avoid obtaining admission of undisclosed income under coercion/undue influence.

3. In view of the above, while reiterating the aforesaid guidelines of the Board, I am directed to convey that any instance of undue influence/coercion in the recording of the statement during Search/Survey/Other proceeding under the I.T.Act,1961 and/or recording a disclosure of undisclosed income under undue pressure/ coercion shall be viewed by the Board adversely.

4. These guidelines may be brought to the notice of all concerned in your Region for strict compliance.

5. I have been further directed to request you to closely observe/oversee the actions of the officers functioning under you in this regard.

6. This issues with approval of the Chairperson, CBDT