In a significant move to crackdown on Chartered Accountants indulging in unethical tax evasion, Central Board of Direct Taxes (CBDT) has sent a list of 12 CAs to the Institute of Chartered Accountants of India (ICAI) for taking disciplinary action.
The move comes a day after Prime Minister Narendra Modi urged CAs to work against tax evasion and not to help those who are trying to evade tax. Reportedly, CBDT has pitched for ICAI to take stringent actions against erring CAs. Sources also suggest that a task force has been appointed by the PMO to look into shell companies and is in talks with CBDT, CBEC and ICAI for taking stricter penalties against such activities.
Under Income Tax Act, Section 278, any CA found indulging in tax evasion or helping others evade tax can be prosecuted and can be punished with an imprisonment ranging from six months to seven years. PMO task force, which is headed by Hasmukh Adhia, is working on increasing the penalties with a strong objective to reduce such illegal practices.
Parellally, ICAI is suspending the license of any CA who is found indulging in unethical tax practices. PMO’s task force, has asked ICAI to impose a monetary penalty along with the existing penalty.