Post leakage of International Consortium of Investigative Journalists (ICIJ) financial data known as Paradise Papers, tax advisers of Indians named in the list of those with money stashed in tax havens could find themselves in the income tax net, said two people in the know.
The government is all set to invoke an income tax provision introduced last year which provides power to the revenue authorities to penalise anyone aiding or advising in tax evasion.
A report published in Economic Times, stated that the government is looking to test a recently passed section under the income tax law where tax advisers can be pulled up under the new sectionâ277Aâ which refers to âfalsification of books of account or documentâ that breaks or circumvents domestic laws.
âIn the investigation matter, we cannot disclose the processes which are initiated or which are going on. We therefore, cannot give point-wise reply to your questions. As and when the investigations are completed, we can let you know about the actions taken out of it,â said finance secretary Hasmukh Adhia in response to a detailed list of queries from ET.
âThe section brought under Income tax is only to implicate who had abetted the evasion by way of either falsification of accounts or signing fabricated documents with knowledge, leading to an evasion. This provision of law is not to implicate a mere advisory even if such wrong advise tantamounts to evasion. To further amplify, there shall be a tangible and positive act from such advisors which can be penalized and not mere an intangible advise, though it may lead to any evasion,â S. Jaikumar, Country Head, Swamy Associates said.
While supporting the Governmentâs new initiative, M. Sathya Kumar, CEO & Founder, Tycoon+ Advisors said that âI support the move by the Government of India, much needed for the development of the country as any revenue leakage through Tax evasion measures has to be strictly dealt with – this move by the government should evolve to more stronger in the years to come.â
