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I-T dept, corporate affairs min team up for shell co crackdown

It says MCA and CBDT have concluded a MoU for data exchange for facilitating sharing of data and information on an automatic basis

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The income tax department and the Ministry of Corporate Affairs (MCA) have signed a memorandum of understanding (MoU) to share data, including PAN numbers, audit reports of firms among others in a bid to crack down on shell companies.

In an official statement on Thursday, it said MCA and Central Board of Direct Taxes (CBDT) have concluded a MoU for data exchange for facilitating sharing of data and information on an automatic basis.

"It will enable sharing of specific information such as Permanent Account Number (PAN) data in respect of corporates, income tax returns (ITRs) of corporates, financial statements filed with the registrar by corporates, returns of allotment of shares, audit reports and statements of financial transactions (SFT) received from banks relating to corporates," it said.

The finance ministry statement said this will take forward the initiative launched by the government to curb the menace of shell companies, money laundering and black money in the country and prevent misuse of corporate structure by shell companies for various illegal purposes.

The MoU was signed on September 6.

"A Data Exchange Steering Group has also been constituted for the initiative which will meet periodically to review the data exchange status and take steps to further improve the effectiveness of the two agencies," it said.

The MoU will ensure that both MCA and CBDT have seamless PAN-CIN (Corporate Identity Number) and PAN-DIN (Director Identity Number) linkage for regulatory purposes. "The information shared will pertain to both Indian corporates as well as foreign corporates operating in India," the statement said.

The data will also be shared for the purpose of carrying out scrutiny, inspection, investigation and prosecution.

The government has already said that over 1.06 lakh directors will be disqualified for their association with shell companies. The MCA is in the process of cancelling the registration of 2.09 lakh companies that have not been carrying out business activities for a long period.

Besides, banks have been asked to restrict operations of these companies' bank accounts by their directors or their authorised representatives. Following deregistration of over two lakh companies currently, there are about 11 lakh companies with active status.

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