Days of making inconsistent disclosures or forum convenient submissions are over for corporates. Regulatory bodies and law enforcement agencies are strengthening their information sharing arrangements for better regulatory oversight and also to tighten the noose on money laundering activities. The latest in the series of such information sharing arrangement is the one between the Income Tax Department and the Competition Commission of India ( CCI). The Central Board of Direct Taxes (CBDT) has now authorised income tax officials to share information or details in their possession with the competition watchdog Competition Commission of India (CCI). However, the CBDT has said that only precise information will be shared by the taxman and also appropriate confidentiality will be maintained.

With this arrangement, CCI will be able to get a good handle of the tax profile of the entity that it is trying to investigate for anti-trust reasons, say experts.

This is not the first time that the CBDT had entered into information exchange pacts or allowed their officials to share assessee related information with other Government departments and regulatory agencies. Similar arrangements have already been entered into with SEBI, Central Board of Indirect Taxes, Ministry of Micro, Small and Medium Enterprises, Agriculture Ministry, Narcotics Control Bureau etc, they said.

Aseem Chawla, Managing Partner, ASC Legal, a law firm, told BusinessLine that the recent initiatives of sharing of information amongst various bodies and forums exhibit the resolve that information is shared all across and that incidence of convenient disclosures made with one forum which are inconsistent with information shared with tax authorities do not get proliferated.

Coordination and collaboration among regulatory and law enforcement agencies have increased in the recent years, especially in the wake of the need to tackle money laundering activities.

Under the prevention of money laundering law, there is requirement that law enforcement authorities should cooperate and coordinate with each other. In 2019, the Prevention of Money Laundering Act (PMLA) was amended and the new Section 72 A was introduced for inter-ministerial coordination. The idea is to exchange more information among the authorities to ensure their efficient functioning.

In October 2019, the Centre appointed a 19-member inter-ministerial committee under the chairmanship of Revenue Secretary. The main terms of reference of this panel, among other things, include operational co-operation between the Government, law enforcement agencies, the Financial Intelligence Unit and the regulators or supervisors.

comment COMMENT NOW