TaxTMI 
TaxTMI 
Revised Standard Operating Procedure (SOP) for management of Suspicious Transaction Reports and exchange of information with Financial Intelligence Unit-India
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....dbacks have been received from field formations, Memorandum of Understanding (MOU) has been signed with FIU-IND and new experiences have been gathered. On the basis of these, the Board has reviewed the existing SOP and decided to issue the 'following,guidelines as the new SOP in supersession of the existing SOP for compliance by all. This SOP will be effective in respect of STRs of all categories (online/ paper or Category A/ others/ P1/P2/P3) which have not been closed as on 1st October, 2014 and all subsequent STRs till further order. 2. Registration of officers on FINNET: Since 2013, STRs are disseminated by FIU-IND to CBDT online only through Finnet at https://finex.gov.in. The Deputy Secretary/ Director, Investigation IV, CBDT, is the 'Nodal Officer' for all matters related to STRs (as mentioned at Para 9.2.1 infra, Director of Income Tax (Recovery), New Delhi, is the Nodal Officer for all matters relating to exchange of information with FIU-IND for the purpose of recovery of taxes). The Nodal Officer, i.e., Deputy Secretary/ Director, Investigation IV, CBDT, will be the first gateway of Finnet in CBDT for all STRs. An officer, subordinate to him, is registered as the 'Alte....
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....ily basis. Further, officers of the level of DDIT and above should only be registered as user on FINNET on behalf of DGsIT/DsIT. (iv) The names of all officers who acted as user at any point of time appear on the list as a result of which users at other stations may get confused as to whom they should transfer STRs to, if required, out of all the names that are appearing. To obviate such confusion, the Nodal Officer will circulate names of new users to other users immediately after registration of a new user. DGsIT will ensure that user-officers work on Finnet regularly and STRs reach investigating officers promptly. 2.2. Change of Registered user: Finnet involves a stage where 4-digit password is sent for every login. When an existing user is replaced, the SIM card, to which the password used to go, will change and hence others cannot work on Finnet. Further, unless the change is intimated to the Nodal Officer, the latter will continue to disseminate STRs to old users. Therefore, whenever an existing user is to be changed for transfer/ retirement/ training/ long leave for more than three months etc. reasons, the existing user will: (i) Obtain approval of the h....
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.... It expires if user does not login for 30 consecutive days. Hence, users must login into Finnet at least once in 30 days. If the password has expired, then user can change it when he logs into the application. These passwords must be noted securely. 4. Receipt and dissemination of STRs: All STRs will be disseminated online. However, top priority STRs may sometimes be disseminated offline through CD/print/email for prompt action. The Nodal Officer may accept or decline STRs from FIU-IND depending on their relevance and usefulness in CBDT. 4.1 Decline by Nodal Officer: Even though Finnet has the features enabling the Nodal officer to decline STRs without accepting, for the purpose of declining, he will first accept the STR, download the PDF copy, save it for record so that it can be viewed later as to why it was declined, enter brief particulars of it in the database of all STRs being maintained in .xl file, submit feedback in the designated page stating the reason for decline and then click on 'close' for closing the STR. However, if the dissemination note itself carries remark by FIU IND that it is 'relatively insignificant' and Nodal Officer agrees to the same on the basis o....
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....Accordingly, the following part of this SOP is applicable, mutatis mutandis, to paper STRs of Category "A"/ "Others'' also. 4.4. Archiving at the end of Nodal Officer at Board and other users in the field: The Nodal Officer and other users of Finnet will take back-up of PDF files of saved STRs and the database in .xl file on daily basis in storage devices like pen drive. Additionally, PDF files of saved STRs will be stored on weekly basis in an external hard disc drive with greater storage capacity. All such files will be preserved in safe custody with utmost confidentiality and handed over by outgoing users to their successors as part of charge handover note. 4.4.1. Feedback reports will also be archived in systematic manner and preserved by Investigating Officers for 16 (sixteen) years in cases involving foreign assets, i.e., the period mentioned in Section 149(1)(c) of Income Tax Act, 1961 and for 8 (eight) years in other cases. 4.5. The STRs received in DG's office will be transferred within a week of receipt to the jurisdictional DsIT (Inv)/ DsIT (Intelligence)/ DsIT (I&CI), as the case may be, after entering the following details in a register (electronic form in Exc....
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....STRs may be assigned to lTOs, While assigning, Joint / Addl. DsIT will keep in mind the following: (i) STRs involving relatively insignificant transactions may be identified for quick open enquiries and disposal. (ii) STRs, prima facie indicating potential of undisclosed income and requiring relatively detailed enquiry, may be identified with clear directions and extent of enquiries in a time bound manner. (iii) STRs, prima facie indicating potential for search/survey, may be classified in a separate category for taking further necessary action and the Addl. / Joint DIT will chart a plan of action separately. (iv) Joint / Addl. DsIT will not assign cases routinely but only with appropriate guidance or directions to Investigating Officers (IOs). (v) However, the process of assignment should be completed within 10 (ten) days of receipt by the Addl. /Joint DIT. 5.4. Investigating Officers will keep in mind the following while investigating STRs: (i) Before issuing summons, notices etc. an attempt should be made to see if the verification can be done from internal sources such as IT return, ITDMS, AIS, ITS, AIR, CIB, OLTAS, eTDS ....
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....subject bank account to any foreign tax authorities or not √ Whether he has been assessed as Resident/ Non Resident in any other country (e) Whether there is any issue that attracts launching of prosecution, particularly u/s 276C (1), in the case, based upon the proceedings that have already taken place. It may also be examined whether any of the prosecution provisions which are not integrally connected with concealment of income [e.g., 276, 276C (2), 276CC, 276D, 277 and also IPC provisions] attract in his cases for any year. (f) Whether there is any existing or likely demand for which we do not have sufficient asset in India and need to attach the fund abroad to protect interests of revenue (g) Even if the income of the assessee out of transactions in a bank account in a foreign country is not taxable in India in a year when his residential status is claimed as Non-resident because of Sec. 5(2) of IT Act, 1961, it is relevant to refer to section 142 (1) (iii) of the IT Act, 1961 under which Income tax Authorities are empowered to ask for details including a statement of all assets and liabilities of the assessee, whether included in the a....
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....aper STRs (Category 'A' or others) will be in prescribed proforma, copy of which is enclosed. In case of online STRs (P1, P2 and P3) feedback will be given first through Finnet online, without which the STR will not get closed, and then through prescribed paper proforma as in case of paper STRs (Category 'A' or others). This is because online feedback will go to FIU-IND and authorities in the Board will not be able to see feedback reports. 7.2. The following guidelines may be followed while preparing feed-back report in prescribed pro forma: (i) At the top of feedback form : Name and PAN of the main person, in respect of whom the STR transactions pertain, have to be mentioned. (ii) Para - 1.1 : Against "FIU-IND case reference number", the STR number must be written correctly to save from problem in database maintenance, matching feedback with STR and reporting. (iii) Para - 2 : Comments in different paragraphs like that against "Was the information found useful?" in Para - 1.3 and that in Para - 2 should be compatible and not contradictory to each other. Such report is obviously contradictory, incorrect and misleading. (iv) Para - 2 : against ....
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.... much larger than the amount(s) of transaction reported in STR. In such a situation the amount in STR and the total amount of undisclosed income ascertained in enquiries may be clearly brought out. Further, important findings of investigation over and above those available in STR, should be mentioned in brief. (f) Brief details of prima facie evidence suggesting violation of other statutes like FEMA, Customs Act, Central Excise Act, Service Tax Act, if any, may be mentioned. (g) If STR has led to any search or survey, the same needs to be specifically mentioned. (h) If the space in the box provided for comment in the proforma introduced by FIU- IND is found inadequate, the space of the box may be extended, but to the minimum required extent only. In any case, comments in this pro forma" must not exceed 1 (one) page of A4 size paper. (i) The date of sending the Investigation report, if any, to the AO must be mentioned with identifiable designation of the AO. (j) In several cases it has been found that investigating officer commented that "STR information has been passed to jurisdictional Assessing Officer". Information of STR along with f....
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....will closely monitor receipt, dissemination, investigation, disposal, reporting and confidentiality of STRs and include the progress report in the monthly D.O. to the Member (Inv) which is to reach him before 10th of the following month. Such progress report may include the particulars mentioned at Para 8 below. 8. Reporting in monthly D.O : Statistical report in respect of STRs and foreign intelligence will be furnished by DGslT in the enclosed pro forma as a part of their monthly D.O. to Member (Inv). Narrative part in the D.O. may not repeat the statistical part as in the pro forma. DGIT may mention in the narrative part his performance / achievement vis-a-vis his action plan in respect of expeditious disposal of STRs. 9. Getting information from FIU-IND on request basis : Financial Intelligence Unit-India (FIU IND) is the designated authority under Prevention of Money Laundering Act, 2002 (PMLA) to receive information from different reporting entities. Accordingly, it has a database of, inter alia, bank accounts and transactions therein, transaction in securities, insurance premium paid on policies etc. 9.1 FIU-IND shares information spontaneously with, inter alia, CBD....
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....FIU-IND normally through FINNET, unless required to do otherwise for some unavoidable reasons. 9.2.3. The Deputy Secretary/ Director (Investigation IV), ARA Centre (Ground Floor), E-2, Jhandewalan Extension, New Delhi - 110055, is the Nodal Officer on behalf of CBDT in the matter of exchange of information between CBDT and FIU-IND in matters other than recovery of taxes as mentioned in Para 4 supra, e.g., verification/ investigation of bank accounts etc. in course of assessment proceedings, pre- and post-search enquiries etc. Requests for information in such matters may be made either online or offline. 9.2.4. The online request may be made through the DDsIT/ JDsIT/ Addl DsIT (Inv) at the offices of all DGsIT (Inv)/ DGIT (I&CI) who are registered as "Designated User" on FINNET. Income Tax authorities in field formations may send their requests to the DGsIT (Inv) of their respective territorial jurisdiction. On receipt of such request the "designated users" at the offices of DGsIT (Inv) may, upload the requests on FINNET and coordinate with FIU-IND through email at [email protected] or its Helpline Phone No. 011-24109792/93. 9.2.5. Online request has several advantages....
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....ality : It may be noted by all Income tax authorities in field formations that information received from FIU-IND is confidential and utmost confidentiality must be maintained in handling and custody of such information. It will be protected from unauthorised use and proliferation and kept confidential. The information received from FIU-IND, domestic as well as foreign, will be treated as intelligence and the same may be further developed by the department's own investigation. In consequence, FIU-IND will not be mentioned as the source of information in any place or occasion or document like assessment order/ correspondence etc. except when required by a competent court of law. Within the department, such information and documents will NOT go to the custody of any official below the level of Income-Tax Officer (ITO); that too only when authorized. However, information and documents received from foreign countries either spontaneously or on request will NOT go to the custody of any official below the level of Assistant Commissioner of Income Tax (ACIT); that too only when authorized. 10.1. As per Para 5.17 of media policy dated 31.1.2014 circulated by the Board (URL link: http://w....
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....1 year old (1) (2) (3) (4) (5) (6) (7) (8) (9) Category "A"STR DIT(Inv),.. DIT(Inv),.. Total Other - category STR DIT(Inv),.. DIT(Inv),.. Total P1 category STR DIT(Inv),.. DIT(Inv),.. Total P2 category STR DIT(Inv),.. DIT(Inv),.. Total &n....
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.... Service Provider Other(Specify) 7. Details of Officer Filling the Form 7.1 Name of Officer 7.2 Designation 7.3 Place 7.4 Name of Department / Agency 7.5 Contact Telephone 7.6 Date FOR FIU-IND USE ONLY - - 2 0 0 1 0 0 0 0 - FEA The Egmont Group of Financial Intelligence Units Request for FIU Information i. REQUESTOR REPRESENTATIONS By using this form, the requesting agency agrees that upon receipt of information provided by the disclosing FIU: • The requesting agency will maintain the confidentiality of any and all information provided to it by the disclosing FIU; • The requesting agency will not disclose the information outside of its agency without the prior written permission of the disclosing FIU; and • The requesting agency will limit the use of the information for the purpose(....