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TMI Blog2017 (8) TMI 254X X X X Extracts X X X X X X X X Extracts X X X X ..... t is directed that no sooner a search / survey is conducted wherever necessary, let the Agency who has conducted the search / survey pass on not only the information of search / survey being conducted of the person searched, but also the incriminating material / information gathered will also be transferred / transmitted in a confidential seal cover for use to the Chief / Head of the other Departments after putting a seal & signature by the Officer from whose possession these documents are being sent. Let a direction be given that such information lying in possession be forwarded/transmitted within a period not later than 3 months and in case information is not passed than the said officer would be held personally liable of the consequences which may follow. The power of prosecution plays a deterrent effect not only on the tax payer who has evaded the tax but it goes a long way and would be deterrent on the society / other tax payers at large. It is true that it should be sparingly used and not in a routine manner wherever evasion takes plays but at-least in cases where it is noticed that there is huge evasion of taxes over the years, that such power should certainly be used by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ened and proceedings commenced but the AO did not care to seek further information from the Income Tax Department and merely on that basis proceeded to pass an assessment order. Learned counsel contended that the AO had no say and if the AO though desired from the Income Tax Department but further information was not sent, therefore, it being a time barring assessment, the assessment had to be completed and this court also held that the AO ought to have gathered / further material in support which was gathered by the Income Tax Officers, and merely because of the said communique from the Income Tax Department, the addition could not have been sustained and the Tax Board also decided against Revenue and this court also found as a finding of fact the reasoning of the Tax Board and upheld the same. 2. This court on noticing the facts called upon the Commissioner, Commercial Taxes, to state whether there is any reciprocal arrangement of exchanging such information of the search / survey conducted by the other Tax Departments or other Departments. 3. Simultaneously, the Registry was directed to send notices to the Chairman, Central Board of Direct Taxes, and Chairman, Central Boar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be completed, come what may and if by the deadline assessment is not completed, all the proceedings come to a standstill and gets time barred. 6.1 Even Government of India was keen that there should be a proper coordination amongst the various Tax Departments in passing of the information collected by one Agency to other, then it was incumbent upon an officer in whose possession the information was available to have passed on such material / incriminating documents to the other agency, to whom such information was required to be passed so that an effective order could be passed rather than an order in futility without any basis or evidence as in the instant case. 7. It may be observed that the Union of India by constituting REIC gave certain guidelines, which are reproduced hereunder :- 1) The Regional Economic Intelligence Councils (REICs) would continue to be the nodal agencies for ensuring operational coordination amongst the different enforcement and investigation agencies dealing with economic offences in the region. 2) The REICs will directly report to the Central Economic Intelligences Bureau (CEIB) 3) The REICs will consist of designated Officers of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EICs would be coordinated by the CEIB. The REICs would send a monthly report by the 10th of the following month in the proforma enclosed as Annexure-IV. In addition, CEIB will convene a meeting of the Conveners bi-annually to discuss problems and current economic issues common to all REICs and coordinate the inter REIC activities. 8. It appears that further guidelines were issued for REIC by the Central Intelligence Bureau on 15.4.2011 and thereafter. It may be expressed that the Union Government is keen that a tax offender / tax evader once searched /surveyed, is certainly committing offence not only of that particular Department, say Income Tax Department, but such search / survey wherein incriminating documents are recovered / undisclosed sales are noticed, then other Tax Departments also gets automatically involved to say if there is undisclosed sales admitted by an assessee during the course of search / survey on that un-recorded / undisclosed sales, sales tax is evaded so liability of sales tax also emerges. If there is undisclosed / unrecorded sale, and it is a case of a manufacturer then it is production outside books of account which results into evasion of Central E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , DGIT(Inv.), Jaipur and covener REIC, Jaipur, gave the following suggestions to make the REIC platform more result oriented:- (a) A manual for sharing of information that was last published in 2015 is being shared with all participant members. The manual has comprehensive guidelines on sharing of information. Copies of the manual were handed over to all the members requesting them to go through it afresh. (b) It is suggested that from now on all the members are to attend the Meetings personally and not to nominate their representatives. Attendence by all the members should be ensured. Defaulters would be reported to Central Economic Intelligence Bureau(CEIB). (c) The Meetings could not be held regularly for the last couple of months due to the absence of a regular DGIT (Inv.). It is proposed that the meetings would now be held regularly. (d) The REIC Guideline that whenever considered necessary, the information and case details be shared between the concerned agencies at the first possible opportunity giving full details for follow up action and the information shared be reported to the Convener, REIC thereafter in the next meeting is to be followed by al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have mutually shared information, then the same may be shared with other members at the next REIC meeting. 6. Each department to modify their internal formats for sharing of information. 12.1 Salient features of the letter from the Office of Director General, State Directorate of Revenue Intelligence Rajasthan, Jaipur dt. 9.6.2017, reads as under :- In view of the directions given by the Honorable High Court the following suggestions are being given:- 1. It is seen that most of the participating organizations are not sharing cases with other participating agencies. In fact even the agencies which are sharing their cases, are doing it on pick and choose basis. Even the departments which are sharing, in those departments also not all cases are being shared with other participating agencies. This may be due to the absence of any monitory criterion. A monitory limit should be fixed and in case any department is having a case having a Revenue implication exceeding that monitory limit then it should be mandatorily shared with other participating agencies. 2. It is also important that all participating agencies are sensitized about the needs of other agencies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or which an effective website like FIU-IND needs to be developed which will also ensure effective monitoring and time saving. 7. REIC is the nodal agency for economic intelligence and it can work effectively when members and nodal officers participate on regular basis. It has been seen in the past that many members do not attend the meeting and instead send their nodal officers or representatives, thus diluting the sanctity and relevance of the meeting. Member should invariably participate and in case due to unavoidable circumstances if the member is unable to attend the meeting then number 2 of the organization may attend after taking permission from the convener of the REIC. 8. REIC meeting should be convened regularly in accordance with the mandate and schedule as fixed by CEIB (Central Economic Intelligence Bureau) it's parent organization. It is proposed that calendar of meeting for a financial year be prepared before the end of the Financial year and circulated to all the participating agencies so that they have a fair idea regarding the meeting dates and the members and nodal officers can plan their schedule accordingly. 9. It is also proposed that any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16. Taking into consideration the aforesaid, let all the Tax departments and other members in REIC act in tandem of the mandate for which REIC is constituted and act in accordance with law, catch hold and effectively dealing an economic offender. 17. No further directions are needed for the affidavits and suggestions and mandate of REIC is sufficient, but it has to be now made a part of day-to-day exercise by the officials concerned. 18. It is also expected that in REIC, the Heads of various Tax / or other Departments should be available in meetings rather than junior officials of some of the Departments, which came to notice of this court on perusal of the earlier reports provided by the Commissioner, Commercial Taxes. 19. It may also be well advised of joint search / survey or after a search/survey being conducted to involve the other Tax Department to have a joint search / survey of an economic offender, and this suggestion came up during the course of hearing on 18.7.2017 and most of the Heads suggested that an exercise can be made of a joint search / survey or later-on during the course of search / survey joining by the other Departments and this is also mandated a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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