New Delhi: The government is going to set up a special wing -- Directorate of Income Tax (Criminal Investigation) -- to probe into criminal offences under direct tax laws. (Agencies)
The DCI, to be set up with immediate effect would collect information regarding persons involved in criminal activities and would look into- transctions they carried as well as start prosecuting them.
"The DCI will also look into criminal matters to find out whether they have any financial implication which is punishable under direct tax law," the Finance Ministry said.
The DCI, to be a part of the Central Board of Direct Taxes (CBDT), will seek and collect information of persons and transactions suspected to be carrying out criminal activities "having cross-border, inter-state or international ramifications, which pose a threat to national security and are punishable under the direct tax laws".
The directorate will also investigate the source and use of funds involved in such criminal activities and file prosecution complaint in competent courts.
The announcement comes amid threat by Yoga Guru Baba Ramdev to launch hunger strike from June 4 on the issue of black money.
Concerned over the spreading tentacles of black money, the government has commissioned an in-depth study to quantify unaccounted income and wealth stashed within and outside the country in 16 months.
The DCI could also hire the services of special prosecutors and other experts for pursuing a prosecution complaint, the Finance Ministry said.
Apart from having agreement with different central or state agencies in India, it may also enter into agreement for sharing information with foreign governments.
Tax and auditing firm Deloitte Haskins & Sells said the setting up of a wing to tackle problems of terror network funding, cross border tax evasion and money laundering cases is the need of the hour and would be an extremely welcome move.
"However, for it to have a real impact, it is important that the Directorate be vested with independent powers," M Lakshminarayanan, Leader-Tax, Deloitte Haskins & Sells said.
For effective prosecution, the agency will also execute "appropriate witness protection programmes".
The directorate has been authorised to coordinate and extend necessary expert and logistical support to any other domestic intelligence agency probing crimes threatening our national security.
Govt to check flow of black money
With an aim to check flow of black money in unlisted companies, the Centre on Monday proposed that preferential allotment of equity shares or debenture issue by such firms must be carried out through demat accounts.
The Ministry of Corporate Affairs (MCA) has also proposed more disclosures for preferential allotment of equities by unlisted companies by replacing the Unlisted Public Companies (Preferential Allotment) Rules, 2003, with a new set of Rules.
"All securities issued under preferential allotment or private placement should be kept in Dematerialised form," said the draft notification of the MCA, on which comments have been
There are about 40,000 active but unlisted companies in the country.
"If the transaction is carried through demat account, trailing the money flow is easier. There will be a transparency in the movement of money," an official said. Sale and purchase in listed companies is done through demat account.
According to draft rules, a company can issue shares on a preferential basis only if it is authorised to do so by it under the rules of association and if a special resolution is passed by the members in a general meeting.
"The special rules will come into force within a period of 12 months....and a copy of the special resolution passed in the general meeting...(and) offer document shall be filed with
the RoC," it said.
The Government also wants that there should not be a gap of more than 30 days between the opening and closing of issue of private placement and a minimum gap of 60 days between two issues.
It further said that if the cumulative amount to be raised through debentures, convertible debentures or any other financial instruments, is more than Rs 5 crore, a company would require prior approval of the government for such an issue.
New Delhi: The government is going to set up a special wing -- Directorate of Income Tax (Criminal Investigation) -- to probe into criminal offences under direct tax laws.