Tax evasion

Sumeet (Querist) 21 June 2020 This query is : Resolved
Dear experts

My Uncle use to be in a real estate business from past 20 years and he earned a lot of money during the year 2000-2008 and he use to do all money transaction with cash and he didn't showed his income in income tax returns.

During the period of 2000-2008 he brought 50 properties.

Now a person has somehow arranged the ITR returns of my uncle from year 2000-2008 and he is blackmailing my uncle that he will complaint to income tax department.

My question is , Is it a crime what I have described in the above situation.
Can my uncle face the problem?

Follow Query

Report Abuse

Quick Summary

An uncle who earned significant undeclared cash income from real estate between 2000-2008 is being blackmailed with copies of his old tax returns. The discussion confirms that failing to declare income and pay taxes is a crime, and he could face penalties from the Income Tax department. Experts advise consulting a Chartered Accountant to assess the situation, potentially regularise the default through voluntary disclosure or payment of penalties, and to investigate how the blackmailer obtained the return copies. While tax departments generally have powers to reassess older cases, specific rules regarding the timeframe for reopening returns, especially for large amounts of escaped income, should be discussed with the CA.

Guest (Expert) 21 June 2020
Discuss in detail with a Local Good Chartered Accountant and sort out the issue in the IT dept. by paying Penalty as per the guidance of the CA.

Guest (Expert) 21 June 2020
Your Volunteer Disclosure could be Leniently Considered. Discuss with your CA.

Raj Kumar Makkad (Expert) 21 June 2020
Your uncle has definitely committed a crime by non-filing of his income tax returns. The source to purchase such huge property is required to be brought in the notice of the State and accordingly if any liability of income tax or property tax is assessed, the same was required to be pass on the Government so as to legalise the said income.

Dr J C Vashista (Expert) 22 June 2020
It is still premature to comment as "no" complaint/ FIR has so far been lodged for the theft of "tax" by the accused (your uncle).

Guest (Expert) 22 June 2020
J.C.Vashista here the matter relates to Income Tax Assessments. Your usage of words like " Theft " " FIR " " Complaint " etc relating to Income Tax makes us more eager to understand how you had completed an L.LB degree while in Army Service as stated by you in your Profile Please

Rajendra K Goyal (Expert) 22 June 2020
Each purchased item / property need to be analyzed in depth in respect to sources and application of fund and hence whether any default comes out.

Sometime such asset purchase is Benami, has to be analyzed accordingly.

Sometime for purchase of property money is borrowed from friends and relatives fact has to be analyzed in detail.

Find out any loan from Banks / other institutions were ever obtained and was used for the purchase?

Whether proofs exist that full amount of purchased was paid at the time of execution of documents.

Your uncle should pass quality time with some experienced CA to find out what is the tune of default in each case and how it can be regularized within legal framework if possible.

In actual calculation, default can be manageable, tax consultant would appropriately suggest the way for it.

Roughly returns more than 10 years old are not reopened by tax department, discuss full conditions with your tax consultant.

Rajendra K Goyal (Expert) 22 June 2020
Previously details of full assets / liability was not required in all Return forms.

Your Uncle should find out how the filed Returns were obtained by the said blackmailer? Returns are personal document are not provided under RTI by Tax Department / bank department / government departments where submitted as proof.

May be benefited if some voluntary disclosure scheme is announced in near future.

Raj Kumar Makkad (Expert) 22 June 2020
15 properties in cash, may be lesser for some of the experts but the same is beyond my understanding, how the same can be got presumed built/acquired by the uncle of the author by borrowing from his relatives. Author has not disclosed anything like that except that everything was done in cash without disclosing the same in any document. Income Tax Act speak loudly in such matters.

Rajendra K Goyal (Expert) 23 June 2020
Properties were purchased in cash. Rules at that time need tto be referred.

Yet it can not be said / concluded that total purchase was of tax evasion, each and every entry has to be analyzed in depth.

It can bring down the liability explained and down considerably.

P. Venu (Expert) 23 June 2020
Your uncle may face problem if he has income and assets that is unaccounted. However, that does not confer any right to the third person to blackmail him. Your uncle has the option to proceed against such a person, if he is so inclined.

Raj Kumar Makkad (Expert) 23 June 2020
The uncle of the author should also remain prepared to face the consequences of the complaint, if made to the concerned officials of the income tax department if he has evaded his tax liability. As per Law, any person can move the wheels of justice.

Rajendra K Goyal (Expert) 24 June 2020
according to section 149, the income tax department has the powers to issue notice to taxpayers for seven years from the end of the financial year. So, this would mean that if you have filed ITR for FY 2018-19, then you must keep the related documents with you till the end of FY 2025-26.

"According to the amendment made in Budget 2017, applicable with effect from AY 2017-18 (April 1, 2017), income tax officers can now ask details up to 10-year-old cases that involves large amounts of escaped income."

Read more at:
https://economictimes.indiatimes.com/wealth/tax/how-long-do-you-have-to-keep-your-income-tax-related-documents/articleshow/66652797.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Raj Kumar Makkad (Expert) 24 June 2020
As neither IT return was filed nor any detail of the source to create such properties is there, as per facts of the query so better to ensure the locks remain closed.

Rajendra K Goyal (Expert) 25 June 2020
The author has mentioned that the returns were filed.

Some blackmailer succeeded in arranging the copies of filed returns.

Sometime some tax adviser / department in which the copies of returns were filed (like Bank etc. for income proof, address proof or otherwise ) may have illegally handed over copies to blackmailer innocently / intentionally.

Previous

Next

You need to be the querist or approved LAWyersclub expert to take part in this query .

Click here to login now

Similar Resolved Queries :

Ask Query
Unanswered Queries