Now, the taxman can use your LinkedIn profile as evidence

Rahul Wadke Mumbai | Updated on July 09, 2014

Not done GE’s liaison office was to act as a link with Indian customers. It was found providing services to GE arms globally.

In trial case, online profiles used to prove GE subsidiary owes taxes for its activities

For a professional, a good LinkedIn profile is a passport to a better job. For the taxman, it’s just become a means to keep tabs on the goings-on in your company.

In a recent case, Income Tax officials succeeded in using LinkedIn profiles of people working for a GE group subsidiary as evidence that their company was conducting activities that were not permitted, and that it owed taxes.

In March 2007, the IT Dept conducted a survey of the offices of General Electric International Operations Company Inc (GEIOC).

The Department said it had noticed the GE group was engaged in various sales activities in India, for which the business heads were generally expats, who were on the payroll of GE International Inc. Support staff were provided by GE India Industrial Pvt. Ltd. and also by third parties.

Violation of terms

The Department noted that according to the application made to the RBI, the GEIOC liaison office was to act as a communication channel between the head office and the customers in India. However, as a result of survey, it says it found the company providing the services of its employees to GE group entities worldwide.

The activities indicated that GEIOC was carrying out business through a Permanent Establishment and that its income was taxable in India. But it had never filed returns indicating this.

To prove its case, the IT Department had sought details about the roles of certain employees working at the liaison office.

When it was unable to get the information, the Department submitted the LinkedIn profiles of the employees as evidence.

GE opposed this, saying the profiles were hearsay evidence.

In its July 4 order, the tax tribunal pointed out that LinkedIn profiles are not in the nature of hearsay (unconfirmed) evidence because it is the employee who has provided all the relevant details. These details are similar to an admission made by a person. No third party is involved in creating a LinkedIn profile and therefore, it cannot be said to be hearsay evidence, the order noted.

Matter of appeal

The order also said that in the present case, LinkedIn profiles submitted by the IT Department had a considerable bearing on the subject matter of appeal and could therefore be admitted as evidence.

Building digital profiles.

A cyber security expert employed with a major financial institution said that all financial and security agencies have started building digital profiles of their “persons of interest”.

Information such as name, age, PAN number, credit card details are being collated using sophisticated algorithms. The IT department is also moving in that direction.

Published on July 09, 2014

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