2 lakh companies not filed I-T returns for years

2 lakh companies not filed I-T returns for years

The government on Saturday sent notices to about two lakh inoperative companies, ordering them to terminate operations and de-register from the ministry of corporate affairs.

The move comes after the authorities found that the companies had not filed tax returns for several years. The income tax authorities and Enforcement Directorate suspect the involvement of some of them in laundering money.

Revenue Secretary Hasmukh Adia, who heads a task force set up by the Prime Minister’s Office (PMO) to monitor shell companies, said on Saturday eight to nine lakh registered companies had not been filing annual returns.

“A total of 1.5 million companies are registered with the ministry. Of them, six lakh are filling income tax returns. The rest could potentially be laundering money,” he said.

Adai said trade-based money laundering was coming to light these days, as in the Rs 6,000-crore Bank of Baroda case.

The ED had, in the first week of April, carried out searches at 100 locations across 16 states, exposing at least 1,000 of them.

The searches were conducted on shell companies related to YSR Congress leader Y S Jaganmohan Reddy, NCP leader Chaggan Bhujbal, and Yadav Singh, former chief engineer of Noida, among others.

The ED had then said its searches had exposed a Mumbai operator running 700 shell companies with 20 dummy directors, which “converted Rs 46.7 crore for Chaggan Bhujbal”.

The PMO’s directions came after it emerged that Rs 1,238 crore has been deposited in cash in such entities in November-December 2016, soon after Prime Minister Narendra Modi announced demonetisation of high-denomination notes.

Besides, 559 beneficiaries had reportedly laundered money to the extent of Rs 3,900 crore. Officials said the crackdown was intended to prevent misuse of the companies for money laundering and tax evasion.

The PMO wants the authorities to red-flag shell companies, and compile a data base of such companies and their directors, with information collected from various agencies.

The data base will also capture Aadhaar numbers of individual directors in the companies.

Among the punitive actions to be taken against deviant shell companies are freezing of bank accounts, striking off of names and invocation of the Benami Transactions (Prohibition) Amendment Act of 2016.

Crackdown to prevent misuse of companies
Many launder money and are linked to politicians
A Mumbai realtor was running 200 such companies

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