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Close on the heels of clamping down of shell companies, the Corporate Affairs Ministry and the Central Board of Direct Taxes (CBDT) have now signed a Memorandum of Understanding (MoU) for automatic sharing of data and information on a regular basis.
The MoU will ensure that both MCA and CBDT have seamless PAN-CIN (corporate identity number) and PAN-DIN (Director Identity Number) linkage for regulatory purposes, an official release said.
The information shared will pertain to both Indian corporates as well as foreign corporates operating in India. In addition to regular exchange of data, CBDT and MCA will also exchange with each other, on request, any information available in their respective databases, for the purpose of carrying out scrutiny, inspection, investigation and prosecution.
MCA and CBDT are already collaborating for near real time allotment of PAN and TAN also at the time of incorporation of companies itself.
The MoU will also enable sharing of specific information such as Permanent Account Number (PAN) data in respect of corporates, income tax returns of corporates, financial statements filed with Registrar of Companies, returns of allotment of shares, audit reports and statement of financial transactions received from banks relating to corporates.
EXPERTS’ TAKE
Abhishek Goenka, Leader Corporate and International Tax, PwC India, said : “The formal understanding reached is a welcome move and will enable two key wings of the Government to match and cross verify transactions.
Caution is however, necessary to ensure that the data is used with adequate safeguards and does not become a toll for blanket notices being issued.”
Rakesh Nangia, Managing Partner, Nangia & Co LLP, said: “Seamless exchange of information on PAN records and audit report between MCA and CBDT will equip the government to crack down hard on shell companies, thereby cleaning the economy of devices used for generating and circulating the menace of black money. These shell companies are the base for breeding the black money, which needs to be cleaned for our economy to grow. Transparency of records and easy exchange of information amongst various administrative departments shall become the new normal, which shall contribute hugely towards constructive growth”.
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