NEW DELHI, Feb 8: The Chamber of Chartered Accountants (CCA) today warned the Central Board of Direct Taxes (CBDT) against any investigation into the sources of earning declared under Voluntary Disclosure of Income Scheme (VDIS) saying it would tantamount to contempt of court. CCA president VD Agrawal said despite a pending case in the Delhi high court, the Central Board of Direct Taxes has asked commissioners of income-tax to initiate investigations, if needed, at the assessment stage.The high court has barred the income-tax department till March 5 from conducting any inquiry or investigation following a CCA petition challenging an earlier Central Board of Direct Taxes circular to make declarations subject to investigation, he said.
Agrawal was reacting to a January 22 circular of the Central Board of Direct Taxes asking income-tax commissioners to issue certificates immediately˙to declarants under VDIS 1997, and hold investigation, if˙any, at the assessment stage.
The court had also asked thedepartment to issue a receipt instead of a certificate to those persons whose declarations, made between December 19 and December 31, were unusual in nature.
Agrawal said the recent Central Board of Direct Taxes order, besides eroding credibility of the board, was also a breach of trust on part of the government as it had originally promised total immunity from any investigation by declarants under VDIS.
He said the declarants were now˙feeling betrayed by the government as all immunities provided by the Finance Act, 1997 were being gradually withdrawn by circulars issued˙by the Central Board of Direct Taxes from time to time.
The CCA president also urged the Central Board of Direct Taxes to refrain from doing any thing which could give wrong signals to declarants who expressed their full trust in the government.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
