The involved 447 firms mainly include movie production houses, infrastructure companies, start-ups and fly by night operators.
The Income Tax department on Monday found out TDS fraud worth Rs 3,200 crore involving as close to as 447 companies.
According to a report in the Times of India, the I-T department unearthed a scam where these 447 firms allegedly were deducting taxes from their employees' salaries but did not deposit with the government and diverted to further their business interests.
The TOI report, citing sources stated that the TDS wing of the I-T has initiated prosecution against involved firms and in some cases had issued warrants.
Under the Income Tax Act, the above mentioned offences attract a minimum punishment of rigorous imprisonment of three months to a maximum of seven years with fine. Prosecution is initiated under Section 276 B.
The involved 447 firms mainly include movie production houses, infrastructure companies, start-ups and fly by night operators.
An I-T official told TOI, “In the recent verification surveys carried out, it was detected that in about 447 cases, Rs 3,200 crore was deducted by the companies but not deposited into the government account.’’ This is for the period April 2017 to March 2018. “We also intend to arrest some of them,’’ the official added. T
Earlier, it was reported that directors of around 8 lakh companies may be prosecuted if their companies fail to file income tax returns from April 2018.
In the recently announced Budget, the Government removed Tax liability cap of Rs 3000.
According to earlier provision companies having tax liability of below Rs. 3000 were exempted to file income tax returns. In this budget, this cap has been removed, making Mandatory to all the registered companies to file the returns if they have tax liability of Rs. 0 also.
According to a senior Finance Ministry official, who was part of the Budget-making exercise, told ANI that this rule will come into effect from April 1, 2018.
He further clarified on the waving off the Rs. 3000 caping, and added that there are 15 lakh companies registered with Ministry of Corporate Affairs.
Only 7 lakh companies are filing returns. Rest 8 lakh companies are not filing returns and claiming that there tax liability is below Rs. 3000 and they are not bound file returns.
However, as per the tax officials, many of these companies are shell companies and involved in tax evasions.
To close this route we have removed this Rs. 3000 cap. From April 2018 onwards if these companies will not file their returns they will be prosecuted under section 276CCC. Under the section 276CCC if such companies are found guilty their directors may face a Jail term of 3 months to 2 years. And if the Tax liability is more than Rs. 25000 then the Directors of these companies may face a Jail term of 6 month to 7 years.
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 "Income tax department finds out Rs 3,200 crore worth TDS fraud involving 447 firms")
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