Operation Clean Money: No threat or show cause to taxpayers, CBDT tells taxman

New Delhi: The CBDT on Tuesday asked the taxman to ensure there is no "threat, warning or show cause" notice to taxpayers contacted by it under 'Operation Clean Money' that is aimed at checking black money post-note ban.

The Central Board of Direct Taxes (CBDT), the policy- making body of the Income Tax department, brought out an eight-page instruction leaflet clearly mandating that no person under verification as part of the operation is required to attend the I-T office "personally under any circumstance and at any stage."

"It should be ensured that the communications made online with the persons under verification should be in very polite language without containing any element of threat or warning. No show cause of any kind should be given," it stated.

The department had sent SMSes and emails to 18 lakh people who made suspicious deposits of over Rs 5 lakh during the 50-day demonetisation period as part of this operation and close to six lakh people have replied on the e-filing portal and have acknowledged to have made such deposits by February 15.

This exercise has been called 'Operation Clean Money' by the CBDT.

These are the first set of official guidelines issued by the Board with regard to the execution and assessment of the data received under this operation after taxpayers and others had raised doubts about possible harrasment by the taxman.

Asking the taxman to keep their queries "relevant and limited in number" as this exercise is only a preliminary verification process, the CBDT has asked the Assessing Officers (AO) to keep their seniors in loop while processing these cases.

It further added a word of caution that "even telephonic queries (with taxpayers) are to be avoided."

"It is reiterated that no independent enquiry or third party verifications are required to be made by the AO outside the online portal. Whatever information is necessary during verification, the same has to be collected through the person under verification using online platform only," the instructions, issued to all field offices of the I-T department, said.

It has been mentioned that in case the AO is "satisfied" by the explanation provided by the taxpayer then the case should be closed electronically "without any physical interface with the person concerned."

It has also asked region in-charges of the department to hold sessions and meetings with the taxpayers, trade bodies and Chartered Accountants (CAs) for those people who have not yet filed their responses.

The CBDT also gave a gist of execution to be followed as if suspicion of black funds is found to be true:

"A holistic view should be adopted looking into the various aspects of the circumstances leading to deposit of cash (like family size, financial status and background of person) and uniformity in approach must be adopted while forming a view about quantum of undisclosed income," it said.

The CBDT has also said verification under this exercise should be completed quickly so that erring taxpayers can avail the one-time window of the Prime Minister Garib Kalyan Yojna (PMGKY) that ends on March 31, to disclose their black funds.

In those cases, where black money is detected, the CBDT has asked the AO to initiate action like undertaking survey and call for documents from the concerned taxpayer in consultation with his superiors.

"During survey, where there is suspicion of back dating of fictitious cash transactions, CCTV recording of the cash counter at relevant banks may also be checked, if necessary. Reference can also be sent to the investigation wing (of the I-T department) in appropriate cases," the instructions said.