TaxTMI 
TaxTMI 
Measures to check tax evasion.
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....ry compliance from taxpayers. The other essential limb of the same policy is intensive scrutiny and relentless investigation in the remaining cases so as to leave no doubt in the minds of taxpayers that they cannot get away with anything they declare in their returns. Intensive scrutiny is thus an essential step in the implementation of the total policy package which reposes increasing faith in the taxpayers and seeks to ensure at the same time that this faith is not abused. 2. Scrutiny assessments should be framed keeping two broad objectives in view. Firstly , there should be no error in the assessments so that audit objections and the need for rectifications do not arise. secondly each assessing officer should be able to process about....
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.... iii)Total wealth statement may be obtained wherever required; iv) The methods of detecting tax evasion described in the three volumes of "Investigation of accounts in the context of the practices followed in the specific trade/industry may be kept in view: v) Whether addition has been made in the earlier years and if so what happened to it in appeals, vi) Whether the accounts are audited he must invariably go through the notes of the Auditor to see whether any comments have been made on the financial results of the organisation. The report of cost auditors, if any, may also be seen. 5. It is not possible to spell out all the areas where concealment could be detected. Tax dodgers are continuously develop....
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....rvey u/s.133 A should be intensified and resorted to more often to detect unaccounted stocks. 6. It may be ensured that the wealth-tax assessments are invariably completed along with the income-tax assessments for the relevant years. Further intimation slips may be sent to other assessing officers wherever required. 7. If any fraud or tax evasion has been detected, the original documents should be kept in the personal custody. The statements of the concerned parties should be recorded u/s.131. Since the Income-tax authorities are not price officers, the Supreme Court has held that the statements recorded by them are admissible in evidence so long as they are not under coercion. Additional evidence should be collected from the Bank acc....
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....on. This is necessary so that the persons may not charge their statements before the Trial Magistrate; iv) List out the relevant judgements of the court which will help us in the case. Take an extract of these judgements. Also identify any circular/instructions etc. of the Board which may help in strengthening the case; v) Make an inventory of all the information that is available and the additional information required to make the case fool-proof; vi) The Commissioners of Income-tax are being directed to keep a guard file of the circulars/instructions/letters/important court judgements etc. regarding prosecutions, see if any help can be obtained from this guard file. 9. After completing the above requirements ....