The IDS’2016- CBDT clarifies that no enquiry or investigation in respect of assets /income declared which were found during the course of Search u/s 132 or Survey action u/s 133A of the Income-tax Act,1961

The Income Declaration Scheme, 2016 incorporated as Chapter IX of the Finance Act, 2016 provides an opportunity to persons who have not paid full taxes in the past to come forward and declare the undisclosed income and pay tax, surcharge and penalty totaling in all 45% of such undisclosed income declared.

Unlike Voluntary Disclosure of Income Scheme, 1965, this scheme, on the lines of Voluntary Disclosure of Income Scheme, 1997, does not expressly require the Principal Commissioner or the Commissioner to make any enquiry/verification while issuing acknowledgement and certificate of declaration. Although Chapter IX of the Finance Act’2016 and the Income Tax Declaration Scheme Rules’2016 are silent on this aspect, the CBDT has clarified vide various clarifications so far as no enquiry shall be made in respect of the assets/ income declared under the scheme.

Further, the Hon’ble Prime Minister of India, Sh. Narendra Modi in his radio programme, Mann ki Baat aired on Sunday, 26th June, 2016, assured the countrymen that no questions would be asked about the source of the undisclosed income or assets if the declaration is made voluntarily. The Hindi version of Hon’ble Prime Minsiter’s Speech in his radio programme, Mann ki Baat is reproduced herein under ( relevant portion):-

“…………………………मैंनेयेभीवादाकियाहैकिस्वेच्छासेजोअपनेमिल्कियतकेसम्बन्धमें, अघोषितआयकेसम्बन्धमेंसरकारकोअपनीजानकारीदेदेंगे, तोसरकारकिसीभीप्रकारकीजांचनहींकरेगी।इतनाधनकहाँसेआया, कैसेआया – एकबारभीपूछानहींजाएगाऔरइसलिएमैंकहताहूँकिअच्छामौकाहैकिआपएकपारदर्शीव्यवस्थाकाहिस्साबनजाइए।………………………….”

In lines with the assurance given by the government, the CBDT yesterday vide Circular No. 32 of 2016 further clarified that wherever in the course of search under section 132 or survey operation under section 133A of Income-tax Act, 1961, any document is found as a proof for having already filed a declaration under the Scheme, including acknowledgement issued by the Income-tax Department for having filed a declaration, no enquiry would be made by the Income-tax Department in respect of the sources of undisclosed income or investment in movable or immovable property declared in a valid declaration made in accordance with the provisions of the Scheme.

The copy of the departmental circular is available for Download here.