Income Tax Department Targets Chartered Accountants in Massive Tax Evasion Scheme Linked to Political Funding

Ranchi: The income tax department’s Jharkhand unit has sought permission from the Central Board of Direct Taxes (CBDT) to initiate steps for cancellation of licences of several chartered accountants (CA) for helping hundreds of people evade taxes in the name of political funding.

Several of the CAs are also among the tax evaders, I-T department sources said.Notably, TOI, in its story titled, ‘500 from J’khand, Bihar ‘donate’ Rs 2k cr to political party, evade tax: I-T dept’ on Sept 12, reported tax evasion by the professionals from Jharkhand and Bihar in the name of funding one Aam Janmat Party, which is registered in Bihar, but all its office bearers are natives of Gujarat.Professionals from Madhubani, Purnia, Supaul, East Champaran, and West Champaran in Bihar, as well as Ranchi, Jamshedpur, and Dhanbad in Jharkhand, had donated money to the party to obtain exemption under Section 80GGC.

The party, however, returned the money to them through various means after deducting a five per cent cut for every donation.Sources said the CAs had put their signature on the Aam Janmat Party’s balance sheets without proper auditing. After getting CBDT’s approval, the I-T department will write to the Institute of Chartered Accountants of India to cancel their licenses.The sources added that there are also 50 CAs among the tax evaders, while many others are working in reputed companies.

The I-T department is issuing notices, asking them to withdraw their donations and also update their I-T returns. Many of these professionals have agreed to do so.In the first week of August, a large I-T team from Jharkhand, comprising over 50 officials, had carried out searches on the premises of Aam Janmat Party’s office bearers and found that the party had received political funding amounting to Rs 2,000 crore.While the investigation in the case is underway, the number of tax evaders and the total amount are likely to increase in the coming days.