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Directorate General of Income Tax Investigation

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Directorate General of Income Tax Investigation
Emblem of India
Agency overview
JurisdictionGovernment of India
HeadquartersCabinet Secretariat
Raisina Hill, New Delhi
Agency executives
Websitefinmin.nic.in

The Directorate General of Income Tax Investigation is the law enforcement agency under the Ministry of Finance responsible for investigating violations of India's tax laws, including fraud, evasion and money laundering.It is India's official FATF unit.Officers are drawn solely from the Indian Revenue Service.It is exempt from the RTI Act.

The main functions of the Directorate are as under

  • To enforce Income Tax Act,1961.
  • Head the investigation wing of the Income Tax Department at the Regional Level[1]
  • Collection of intelligence pertaining to evasion of Direct Taxes[1]
  • Unearth black money.[1]
  • Dissemination of information and intelligence collected - by passing on the same to the concerned authorities including assessing authorities[1]
  • Keep liaison and hold meetings with other organisations in the region to ensure co-ordination and smooth flow of information[1]
  • Take appropriate steps to ensure that information and other persons having information about tax evaders come forward with the same to the Department. Disbursement of rewards would be one of the measures.[1]
  • To collect and develop intelligence relating to violation of the provisions of Income Tax Act,1961[2]
  • To conduct searches of suspected persons, conveyances and premises and seize incriminating materials (including Indian and foreign currencies involved)
  • To enquire into and investigate suspected violations of provisions of Prevention of money Laundering Act 2002 and Income Tax Act,1961[3]
  • Analysis and dissemination of such intelligence to the field formations for the Income Tax Department and Working out intelligence directly, where necessary
  • Keeping watch over important seizures and investigation cases
  • Associating or taking over the investigations which warrant specialised handling by the Directorate
  • Guiding important investigations/prosecution cases
  • Functioning as the liaison authority for exchange of information among FATF countries for combating international tax frauds in terms of the recommendations of the FATF conference
  • Keeping liaison with foreign countries, Indian Missions and enforcement agencies abroad on anti-evasion matters
  • Keeping liaison with the CBI and through them with the INTERPOL
  • To adjudicate cases of violations of Foreign Exchange Management Act penalties departmentally and also for confiscating the amounts involved in violations.
  • To realize the penalties imposed in departmental adjudication
  • To attach and confiscate properties involved in the act of tax evasion.
  • To arrest the person suspected to be involved in the act of tax evasion through the TRO.
  • To prosecute the person involved in the act of money laundering and tax evasion.[4]

Functions of The Director General of Income Tax (Investigation)

  • Supervision and control over the Directors of Income Tax (Investigation), Commissioners of Income Tax (Central) and Commissioners of income Tax (CIB). In Mumbai and Delhi, CCIT (Central) exercises control over CIT (Central).
  • Chief Commissioner to continue as cadre controlling authority in respect of Group ‘B’ officers as also the staff allocated to the DG or Directors or CITs, Additional/Joint/Deputy Directors, ADsIT and Central Circles under the control of DG(Inv.). In respect of Group ‘B’ officers and staff borne on the strength of the Directorate of Income Tax (Inv.) Delhi, the Director General is the cadre controlling authority.
  • Fixing of overall sanctioned strength of each Directorate, CIT(CIB) and Central Circle.
  • Selection of officers up to the level of Addl. /Joint DIT in consultation with cadre controlling Chief Commissioner of Income Tax and Chief Commissioner of Income Tax (Central).
  • Computerisation.
  • Processing of complaints regarding evasion of tax.
  • All matters relating to administrative approval for filing, dropping or withdrawing of prosecution cases in respect of
  • offences mentioned in Chapter XXII of the Income-tax Act and corresponding provisions in other Acts relating to Direct
  • Taxes.
  • All technical and administrative matters relating to provisions of sections 147 to 153 (both inclusive) of the Income-tax
  • Act, 1961.
  • Searches, seizures and reward to informants.
  • Survey.
  • Voluntary disclosures.
  • Matters relating to the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976.
  • Work connected with High Denomination Bank Notes (Demonetisations) Act, 1978.[5]

Functions of Director of Income Tax (Investigation)

  • The Director of Income Tax (Investigation) performs the following functions:
  • Planning and execution of search and seizure and survey operations.
  • Statutory functions.
  • Grant of awards/rewards.
  • Administration of secret funds.
  • Processing of TEPs.
  • computerisation.

Functions of Addl./Joint/Deputy/Assistant Director of Income Tax (Investigation)

  • Pre-search enquiries and reconnaissance work.
  • Search and Seizures.
  • Preparation of appraisal report.
  • Enquiry work in the TEPs.
  • Surveys u/s 133 A(1) and 133A(5).
  • Keeping liaison with other departments like Customs and Central Excise, Enforcement Directorate, Revenue Intelligence, Economic Offenses Wing of State Govt., Police, Lokayukta,DGFT, CBI,REIC,CEIB etc.
  • Deals with the informants.
  • All technical and administrative matters relating to provisions of sections 147 to 153 (both inclusive) of the Income-tax
  • Act, 1961.
  • Searches, seizures and reward to informants.
  • Survey.
  • Voluntary disclosures.
  • Matters relating to the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976.
  • Work connected with High Denomination Bank Notes (Demonetisations) Act, 1978.[6]

Functions of Tax Recovery Officer (TRO)

The jurisdiction of the Tax Recovery Officer (TRO) commences when an assessee is in default or is deemed to be in default in making payment of tax. The Tax Recovery Officer may draw up under his signature a statement in the prescribed form specifying the amount of arrears due from the assessee under section 222(1) of the Income Tax Act, 1961. The procedure for recovery of tax is stipulated in the Second Schedule to the Income Tax Act, 1961. Rule 4 of the Second Schedule lays down the following modes of recovery of arrears of tax :

  • Attachment and sale of the assessee’s movable property.
  • Attachment and sale of his immovable property.
  • Arrest of the assessee and his detention in prison.
  • Appointing a receiver for the management of his movable and immovable properties.

The Tax Recovery Officer has to exercise his powers in accordance with Income Tax (Certificate Proceedings) Rules (I.T.C.P. Rules), 1962 and the Second Schedule to the Income Tax Act. The Tax Recovery Officer is primarily responsible for effecting recovery of the arrears of tax. If at any time, after drawing the tax certificate, the higher authority treats the assessee as not being in default for a particular period for a certain demand, the T.R.O. is bound to stay his recovery proceedings for that demand for the particular period. He should liaise with the Assessing Officer so that details of movable and immovable property and also the correct position of demand can be ascertained.

The I-T Department, through its Tax Recovery Officer (TRO), has been bestowed with the powers to "arrest and detain" in prison a tax defaulter and carry out subsequent stringent penal action against the individual under the provisions of the Income Tax Act to recover arrears.

The TRO's office and its powers have been "dysfunctional" for a long time now, but rising tax arrears and economic crimes have made the I-T Department revive and restore the powers and functioning of this unit, which is deputed under every Commissioner of Income Tax (CIT) in the country.[7]

A TRO is empowered to attach and sell assessee's movable property and immovable property, arrest the assessee and detain him or her in prison and appoint a receiver for the management of this movable and immovable property under Section 222 of the I-T Act.

A recent blueprint of the department, aimed at curbing black money and speeding up the recovery of arrears to the tune of more than Rs 2 lakh crore, specifies that the post of TRO should be strengthened and made a "special pay post" to ensure better work. The TRO should be armed with full details of the assets of the tax defaulter, the TRO's mobility should be increased by providing operational vehicles and additional I-T inspectors should be sanctioned to this unit to launch prosecutions, it suggests.

The official blueprint also says that till these measures become operational, the regular Assessing Officer (AO) in each I-T range of the country should be deputed as a TRO as an immediate measure.There is an urgent need to strengthen the office of the TRO in the I-T Department.I-T sources say that the post of the TRO is currently not considered a good post to work as the task and powers given to this elite unit are enormous, but the resources deployed are minuscule.

The present situation is that the powers to attach property and sale of assets which can be done by the TRO are rarely used. With the TRO's office getting fully operational, it will also make economic crime and tax default punishable with arrest and jail, which is rarely done in such cases If at any time, after drawing the tax certificate, the higher authority treats the assessee as not being in default for a particular period for a certain demand, the T.R.O. is bound to stay his recovery proceedings for that demand for the particular period. He should liaise with the Assessing Officer so that details of movable and immovable property and also the correct position of demand can be ascertained.

References

  1. ^ a b c d e f "The Role of Directorate General(s) of Income Tax(Investigation)". The Central Economic Intelligence Bureau. Retrieved May 14, 2012.
  2. ^ http://www.irsofficersonline.gov.in/
  3. ^ http://www.irsofficersonline.gov.in/
  4. ^ http://www.irsofficersonline.gov.in/
  5. ^ http://www.irsofficersonline.gov.in/
  6. ^ http://www.irsofficersonline.gov.in/
  7. ^ http://www.irsofficersonline.gov.in/
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