Tax Department, Centre Will Share PAN, Audit Reports To Crack Down On Shell Companies
IT department, ministry of corporate affairs sign agreement to intensify fight against black money.
- The pact aims at curbing the menace of money laundering, black money and misuse of corporate structure
- The MoU will ensure that both MCA and CBDT have seamless PAN-CIN and PAN-DIN linkage for regulatory purposes
- Banks have been asked to restrict operations of these companies’ bank accounts by their directors
The income tax department and the ministry of corporate affairs have signed a pact to regularly share data, including permanent account numbers and audit reports of firms, to intensify the crackdown on shell companies.
The agreement, which came into effect on September 6, aims at curbing money laundering, flow of black money and misuse of corporate structure by proxy firms, a finance ministry statement said on Thursday.
Under the pact, tax authorities will now relay audit reports of corporates and specific information from their income tax returns along with PAN details to the corporate affairs ministry.
Besides, financial statements filed by corporates with the Registrar of Companies, returns of allotment of shares and statement of financial transactions received from banks will also be shared between the two departments. This will ensure seamless PAN-CIN (corporate identity number) and PAN-DIN (director identity number) linkage, said the release.
A Data Exchange Steering Group has also been constituted for the initiative which will meet periodically to review the data exchange status and take steps to further improve the effectiveness of the two agencies.Finance Ministry Statement
“The information shared will pertain to both Indian corporates as well as foreign corporates operating in India,” the statement said. The shared data will be used for carrying out scrutiny, inspection, investigation and prosecution.
The government has already said that over 1.06 lakh directors will be disqualified for their association with shell companies. The corporate affairs ministry is in the process of cancelling the registration of 2.09 lakh companies that have not been carrying out business activities for a long period.
Besides, banks have been asked to restrict operations of these companies' bank accounts by their directors or authorised representatives.
Following the deregistration exercise, there will be about 11 lakh companies with active status.