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CTO, Anti Evasion-I, Kota Versus M/s Anand Minerals Pvt Ltd And Vice-Versa

Search/survey - Revenue is of the view that the AO ought to have gathered / further material in support which was gathered by the Income Tax Officers, and merely because of the said communique from the Income Tax Department, the addition could not have been sustained - whether there is any reciprocal arrangement of exchanging such information of the search / survey conducted by the other Tax Departments or other Departments? - Held that: - It is directed that not only information would be passed .....

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mation is transmitted by all the Agencies in their possession. Accordingly, it is directed that no sooner a search / survey is conducted wherever necessary, let the Agency who has conducted the search / survey pass on not only the information of search / survey being conducted of the person searched, but also the incriminating material / information gathered will also be transferred / transmitted in a confidential seal cover for use to the Chief / Head of the other Departments after putting a se .....

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the society / other tax payers at large. It is true that it should be sparingly used and not in a routine manner wherever evasion takes plays but at-least in cases where it is noticed that there is huge evasion of taxes over the years, that such power should certainly be used by the authorities respectively. Therefore, direction is given that as and when needed though sparingly such power of prosecuting the person / tax evader should be used. Therefore, this need to be taken care of henceforth b .....

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r, Mr. C.S. Sinha for Mr. R.D.Rastogi, Addl. Solicitor General Mr. Rahul Rajput, Joint Director, Enforcement Directorate Dr. S.R. Meena, Addl. Commissioner (Narcotics), Mr. V.K. Singh, IG, ACB Mr. S.C. Goyal, Addl. Director (Revenue) JDA, Mr. M.S. Khan, S.P. CBIMr. Sanjeev Singh, Director, Revenue Intelligence Mr. Kishan Singh, Asstt Director, IB Mr. Virendra Singh, Joint DGFT, Jaipur Dr. S.L. Meena, Principal Comm, CGST Commissionerate, Jaipur, [holding additional charge of Chief Commissioner, .....

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oner, Customs Dr. Rajesh Sharma, IG, Registration & Stamps Department, Ajmer Mr. Satyapal, Addl. IG, Registration & Stamps Department, Jaipur Mr. P.K. Jain, General Manager (Law) for RBI JUDGMENT 1. This court on 19.12.2016 heard the revision petition / reference of the Revenue, being not satisfied, dismissed the petitions preferred by the Revenue. However, the facts transpired that it is a case where the assessment was reopened by the Assessing Officer on an information having been rece .....

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therefore, it being a time barring assessment, the assessment had to be completed and this court also held that the AO ought to have gathered / further material in support which was gathered by the Income Tax Officers, and merely because of the said communique from the Income Tax Department, the addition could not have been sustained and the Tax Board also decided against Revenue and this court also found as a finding of fact the reasoning of the Tax Board and upheld the same. 2. This court on .....

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nging to the notice of court that a Committee has been constituted by the Government of India, namely Regional Economic Intelligence Council (REIC), wherein all branches of Tax Authorities, including Sales Tax Department are part of the Committee, and it is mandated that every two months meeting would take place and material collected would be exchanged by various agencies of the REIC. 4.1 Further dates were given and later-on, after seeking further information, notices were sent to all the Tax .....

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ruitful meetings had taken place amongst the various members of the REIC. 5. Having noticed that there was lack of coordiantion as noticed earlier and in fact it was noticed that in a few cases the Sales Tax Officers / Senior Officials of the Sales Tax Department, desired repetitive information from the Income Tax Department about the material gathered / collected by them during the course of search / survey conducted by the Income Tax Department and it was expressed by the Commissioner, Commerc .....

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and not for holding meetings that s all. 6. It is an admitted fact known to all that under most of the tax proceedings, namely under Income Tax / Sales Tax or Service Tax and other Tax Departments, a time barring period is fixed within which an assessment is to be completed, come what may and if by the deadline assessment is not completed, all the proceedings come to a standstill and gets time barred. 6.1 Even Government of India was keen that there should be a proper coordination amongst the v .....

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C gave certain guidelines, which are reproduced hereunder :- 1) The Regional Economic Intelligence Councils (REICs) would continue to be the nodal agencies for ensuring operational coordination amongst the different enforcement and investigation agencies dealing with economic offences in the region. 2) The REICs will directly report to the Central Economic Intelligences Bureau (CEIB) 3) The REICs will consist of designated Officers of the Departments of Income tax and Customs & Excises, head .....

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ensure operational coordination between different agencies in the region; - gather general economic intelligence on trade and industry in the region and examine trends on intelligence and changing dynamics of economic offences, including new modus operandi, for such offences and suggest measures for dealing effectively against economic offenders; - make estimates of evasion of taxes and duties in their respective regions; - develop a computer based network to serve as a data bank for real time .....

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. An illustrative format for exchange of information is given at Annexure-II. The REICs would meet bi-monthly and would be attended by the designated officers. Regular minutes of the meeting would be maintained by the REICs detailing action taken on the information exchanged between various agencies and the net result of information exchanged would be sent to the convener in the illustrative format given as Annexure-III and made part of the minutes. 7). The office of the Convener would act as a .....

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economic issues common to all REICs and coordinate the inter REIC activities. 8. It appears that further guidelines were issued for REIC by the Central Intelligence Bureau on 15.4.2011 and thereafter. It may be expressed that the Union Government is keen that a tax offender / tax evader once searched /surveyed, is certainly committing offence not only of that particular Department, say Income Tax Department, but such search / survey wherein incriminating documents are recovered / undisclosed sal .....

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y other Tax Departments and, therefore, Union Government also expected that the various agencies should pass on such information to the other agencies. 9. Even police personnel on a tip or otherwise on normal checking at night come across people carrying undisclosed currency / undisclosed bullion / silver in huge quantities, and such information is certainly useful to the other agency who can take appropriate remedial measure according to the evasion by such Departments. 10. On 25.5.2017 followi .....

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toms Department; Ms. Ruchita Vij, Addl. Commissioner, Central Excise & Service Tax; Mr. Arif Ali, Suptd. on behalf of DNC, Central Bureau Narcotics, Kota, and Mr. Tej Prakash Sharma, Special Public Prosecutor, Central Bureau Narcotics, were present, who gave their inputs and suggestions during the course of hearing and have personally submitted affidavits on behalf of the Tax / other Departments to whom they are representing. The minutes of the meeting of REIC members committee held on 7.6.2 .....

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ome paras of additional affidavits filed on behalf of the respective Departments which would help in future to be more transparent in exchanging the information. Salient features of the affidavit filed on behalf of the Director General of Income Tax (Investigation) dt. 15.7.2017, are quoted hereunder :- At the end of the meeting, DGIT(Inv.), Jaipur and covener REIC, Jaipur, gave the following suggestions to make the REIC platform more result oriented:- (a) A manual for sharing of information tha .....

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c) The Meetings could not be held regularly for the last couple of months due to the absence of a regular DGIT (Inv.). It is proposed that the meetings would now be held regularly. (d) The REIC Guideline that whenever considered necessary, the information and case details be shared between the concerned agencies at the first possible opportunity giving full details for follow up action and the information shared be reported to the Convener, REIC thereafter in the next meeting is to be followed b .....

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r taking further action need to complete the investigations within a reasonable time frame and submit the action taken report to the REIC should be followed by all members. It is also suggested that ation on shared information should be taken immediately by the concerned agency without waiting for limitation date. (g) It is to be ensured that the progress of action taken should be intimated to the REIC Secretariat before the date of REIC Meeting. (h) The information which is to be shared in the .....

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g the following into action: 1. Date for the regular meeting for REIC was fixed for 29th of June with the consent of all the participant members. 2. All the members agreed that from now on the meetings of the nodal officers shall also be held regularly. It was also decided by the members that the meetings of Nodal Officers and REIC members would now be held alternatively every two monts. Hence, the REIC member meetings would now be held bi-monthly for better follow up of the cases. 3. The possib .....

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of information. 12.1 Salient features of the letter from the Office of Director General, State Directorate of Revenue Intelligence Rajasthan, Jaipur dt. 9.6.2017, reads as under :- In view of the directions given by the Honorable High Court the following suggestions are being given:- 1. It is seen that most of the participating organizations are not sharing cases with other participating agencies. In fact even the agencies which are sharing their cases, are doing it on pick and choose basis. Eve .....

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Most of the time field officers are not aware as to what is required by the other agencies and what kind of evidence is to be collected. It is proposed that in every meeting one member should give a brief presentation about his organization. There should also be a mechanism through which field officers may also be sensitized about each other's working ad needs. 3. In Revenue departments a matter can be barred by limitation so it is imperative that any actionable information should be shared .....

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y the sponsoring department. It has been seen that even after multiple attempts, the documents are not handed over by the sponsoring agencies mainly because of the reason that these documents are required for its own proceedings. It is proposed that it should be the responsibility of the sponsoring agency to furnish copy of documents relied by it for sponsoring a particular case at the time of sponsoring that case before REIC. The photocopies may be kept with the nodal officers of the sponsoring .....

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e completion of cases by accepting agencies. It is an agreed fact that different participating agencies have different time limit for completion of a particular case and some case may not be actionable at all. However, a time limit should be fixed and adhered for providing a preliminary report. The sharing of information and feedback mechanism should be preferably online for which an effective website like FIU-IND needs to be developed which will also ensure effective monitoring and time saving. .....

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ttend after taking permission from the convener of the REIC. 8. REIC meeting should be convened regularly in accordance with the mandate and schedule as fixed by CEIB (Central Economic Intelligence Bureau) it's parent organization. It is proposed that calendar of meeting for a financial year be prepared before the end of the Financial year and circulated to all the participating agencies so that they have a fair idea regarding the meeting dates and the members and nodal officers can plan the .....

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work of secretariat. 13. The other Departments have also on these very line given their own suggestions, however, by & large the above would cover the intent and purpose of coordinating with the various Tax Agencies. 14. Taking into consideration the aforesaid, all the suggestions given by the various Tax Agencies in their own affidavits, shall be acted upon by the various Agencies and such information would be immediately transmitted to other Agencies, who may according to their needs and .....

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zed. 15. The purpose would be served of constituting REIC by the Union Government when such information is transmitted by all the Agencies in their possession. Accordingly, it is directed that no sooner a search / survey is conducted wherever necessary, let the Agency who has conducted the search / survey pass on not only the information of search / survey being conducted of the person searched, but also the incriminating material / information gathered will also be transferred / transmitted in .....

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the Tax departments and other members in REIC act in tandem of the mandate for which REIC is constituted and act in accordance with law, catch hold and effectively dealing an economic offender. 17. No further directions are needed for the affidavits and suggestions and mandate of REIC is sufficient, but it has to be now made a part of day-to-day exercise by the officials concerned. 18. It is also expected that in REIC, the Heads of various Tax / or other Departments should be available in meetin .....

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f a joint search / survey or later-on during the course of search / survey joining by the other Departments and this is also mandated and intention of the Government as well. Let the same be also effectively taken into consideration henceforth. 20. I have noticed that under various laws power of imposing penalty is there so also prosecution can be launched in an appropriate or suitable case where the authorities feel that there is huge undisclosed income and sufficient material has been found wh .....

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