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I-T department to begin massive crackdown against shell companies

The tax authorities will now relay audit reports of corporates and specific information from their I-T returns as also PAN data to the ministry of corporate affairs, as the government plans to crack down harder on shell companies.

Coming down heavily on shell companies, the Ministry of Corporate Affairs (MCA) has already cancelled registrations of over 1.62 lakh companies for non-filing of financial statements for the immediate two preceding fiscals.

The Central Board of Direct Taxes (CBDT), the apex policy making body of the I-T department, in an order has asked the Principal Director General of Income Tax (Systems) to share “bulk information” to the MCA.

Bulk information would mean Permanent Account Number (PAN) data of corporates, their Income Tax returns (ITRs), audit reports and statement of financial transactions (SFT) received from banks relating to corporates.

Also the tax department would share identified PAN Challan Identification Number (CIN) as well as PAN Director identification number (DIN) with the MCA.

The Registrar of Companies (RoCs) have removed 1,62,618 companies from the register as on July 12, 2017 after following the due process under Section 248 of the Companies Act, 2013.

Section 248 provides powers to the RoC to remove the name of a company from the register on various grounds including non carrying out any business for two preceding financial years.

Out of the 1,62,618 companies that have been struck-off the register, the registration of 33,000 were cancelled by RoC (Mumbai).

Among others, RoC (Delhi) has deleted 22,863 companies from the register and 20,588 firms were deregistered by RoC (Hyderabad).

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