The Hindu Business Line : Falsification of banks of accounts — Panel wants Govt to revisit Budget proposal

(From left) Mr N.K.Singh, former Member of the Planning Commission, Dr. Naushad Forbes, Professor, Science, Technology and Society, Stanford University, and Mr Harsh Mariwala Chairman, Marico Industries, at a seminar in Mumbai on Saturday. — Shashi Ashiwal

New Delhi , Aug. 21

A PARLIAMENTARY committee has advised the Government to revisit or amend the Budget proposal on falsification of books of accounts or document, stating that such a provision can cause undue harassment or anguish to the honest and good intentioned persons.

The Finance Bill 2004 has a provision that stipulates punishment with rigorous imprisonment for falsification of books or documents to induce or abet any other person to evade tax.

The term of punishment under the proposed law (Section 277A) will be not less than three months but may extend to three years with a fine.

In its report tabled in Parliament on Friday, the Standing Committee on Finance has, at the same time, held that tax evasion and perpetrators of tax evasion should be dealt with strictly.

The committee also noted that there are only 46,000 persons in the country who have shown that they are earning more than Rs 25 lakh per annum.

The total number of persons who are filing returns with income of over Rs 10 lakh per annum is about 75,000.

On a question raised about bringing high spenders, such as those who buy luxury cars and travel frequently by air, into the tax net, the Government has told the committee that high value transactions are to be captured through the annual information return (AIR).

"We will try and capture high value transactions through the tax information network (TIN) and through the AIR, which is essentially for high value transactions, and concentrate on that segment of citizens who have the ability to pay (tax) but who are not paying. We will do this not in a draconian way but by capturing information through the actual expenditure incurred by them," the Government has said.

The Government has held that the rules for AIR are yet to be framed. "There is some difference of opinion about the `person' and `assessee'. That is being sorted out," it said. Indications are that this amendment will be taken care of when the Finance Bill 2004 is passed.

The Government has also made it clear to the Committee that the threshold for AIR has to be refixed. "It had been mentioned as Rs 50,000. But Rs 50,000 is just bare minimum. In the rules, we have to take a decision," the Government has said in its reply to the queries of the Standing Committee on Finance.

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