Failure to answer questions from the tax
department can entail a penalty of up to Rs. 2 lac from the next financial year
(2016-17) under the new black money law, which has got the assent of the
President.
The Black Money (Undisclosed Foreign Income and
Assets) and Imposition of Tax Act, 2015 provides for a minimum penalty of Rs.
50,000.
Besides, tax authorities would be able to send
summons or / notices via electronic mails (e - mails) and fax to seek
information from those under probe for suspected black money stashed abroad.
The Act got the President's assent on Tuesday and
will come into force from April 1, 2016.
The new law, which has provisions to deal with
the problem of the undisclosed foreign income and assets, was passed in the
Rajya Sabha on May 13, 2 days after it got the Lok Sabha nod.
A person shall be liable to a penalty if he has,
without reasonable cause, failed to answer any question put to him, by a tax
authority in the exercise of its powers, the Act says.
The penalty will be imposed if he fails to sign
any statement made by him in the course of any proceedings which a tax
authority may legally require him to sign and also for their failure to attend
or produce books of account or documents called in response to summons issued
to him.
The penalty "shall not be less than fifty
thousand rupees but which may extend to two lakh rupees", it said.
The service of any notice, summons, requisition,
order or any other communication may be made by delivering or transmitting a
copy to a person by post or by such courier service as may be approved by the
Central Board of Direct Taxes (CBDT).
It can also be issued in the form of any
electronic record and "by any other means of transmission of documents,
including fax message or electronic mail message, as may be prescribed".
The CBDT may make rules providing for the
addresses including the address for electronic mail or electronic mail message
to which the communication may be delivered or transmitted to a person, as per
the Act.
A notice or any other document required to be
issued, served or given under the Act by any tax authority shall be
authenticated by that authority.
"Every notice or other document to be
issued, served or given for the purposes of this Act by any tax authority shall
be deemed to be authenticated, if the name and office of a designated tax
authority is printed, stamped or otherwise written thereon," it said.
The person shall be precluded from taking any
objection in any proceeding or inquiry under this Act that the notice, issued
for assessment, was not served upon him, not served upon him in time or served
upon him in an improper manner.
However, this provision shall not apply, if the
person has raised the objection before the completion of the assessment, the
Act said.
The law provides for a short-time compliance
window for people having undeclared assets abroad to come clean by paying 30%
tax and 30% penalty, before the Act comes into force.
The person making such declaration shall, in
addition, be liable to penalty at the rate of one hundred per cent of such tax,
it said.
The Centre is in the process of notifying the
date and detailed procedure for those wanting to come clean on assets stashed
abroad.
However, after the end of the short-term period,
an assessee will have to pay 30% tax, and its three (3) times as penalty on the
tax computed on undisclosed foreign income and assets, and face criminal
prosecution which could result in jail term of up to 10 years.
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