The Directorate of Criminal Investigation (DCI) was created vide Notification dated 30th May, 2011 and 19th August 2011 to perform functions in respect of criminal matters having any financial implications punishable as an offence under any direct tax law including inter-alia:

• Chapter XXII of the Income Tax Act, 1961 (Act 43 of 1961); and

• Chapter VIII of the Wealth Tax Act, 1957 (Act 27 of 1957).

The Government is satisfied with the functioning of the Directorate.

The DCI has been playing pivotal role in collection, collation and dissemination of intelligence for use by difference wings of the Income Tax Department in proceedings under direct tax laws apart from undertaking investigation in specified categories of cases including information received under exchange of information protocols from other countries.

Major part of the information collected is through the mechanism of annual Information Returns (AIR) and Central Information Branch (CIB). Such information is utilized inter-alia for computer aided selection of scrutiny cases.

Besides, the DCI has conducted search and seizure operations in 8 cases in which undisclosed income admitted was to the tune of Rs. 438 crores (aprox.).

Further, the DCI in association with Directorate of systems undertook a pilot project named ‘Non-filers Monitoring System’ in February-March 2013 with encouraging results in terms of both widening and deepening of the tax base.

The DCI has also undertaken various other projects including enquiries under direct taxes laws into allegations of violations of KYC norms by several banks, having impact on evasion of direct taxes.

Various steps have been taken to strengthen the intelligence related functions of DCI. These include legislative and administrative interventions including rationalization of CIB/AIR codes to make the functioning of the Directorate more effective. DCI’s structures would also get suitably augmented with implementation of ongoing cadre restructuring of the Income Tax Department.

This was stated by Minister of State for Finance, Shri J.D. Seelam in a written reply to a question in Lok Sabha today.

Search and seizure-led tax intelligence uncovers undisclosed income and advances non-filer monitoring to expand the tax base. The Directorate of Criminal Investigation (DCI) conducts intelligence led detection and investigation of financial offences under direct tax laws by using annual information returns and the Central Information Branch for computer aided selection of scrutiny cases, carrying out search and seizure operations that uncovered substantial admitted undisclosed income, pursuing enquiries into alleged KYC breaches by banks, and piloting a Non filers Monitoring System to broaden the tax base while implementing CIB/AIR code rationalisation and cadre restructuring to strengthen its functions.