Corporate affairs ministry and the CBDT will share PAN of key managerial personnel in companies, ITRs, financial statements, audit reports and statements of financial transactions received from banks relating to businesses
New Delhi: To take quick action against companies that default on statutory obligations or indulge in financial crimes, the corporate affairs ministry and the Central Board of Direct Taxes (CBDT) have agreed to exchange financial data of companies on a regular basis, the government said on Thursday.
The agreement covers sharing of permanent account numbers (PAN) of key managerial personnel in companies, income-tax returns (ITRs), financial statements, audit reports and statements of financial transactions (SFT) received from banks relating to businesses.
“The memorandum will ensure that both entities have seamless PAN-CIN (Corporate Identity Number) and PAN-DIN (Director Identity Number) linkage for regulatory purposes," said the press release.
The memorandum was signed on 6 September which pertains to both Indian and foreign corporates and is effective form that day itself.
“A data exchange steering group also has 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," said the press release.
The finance ministry earlier this month restricted directors of around 200,000 dormant companies struck off official records from accessing their firms’ bank accounts. Some of them have come under the scanner of the income-tax department for suspected money laundering and stock price manipulation.
“Such automatic and regular data sharing will help tax administration in conducting sharp and effective audits on the credibility and substance of the companies and matching their profiles with the tax returns that they file and the taxable income they report," said Sanjay Sanhgvi, partner at law firm Khaitan and Co.
As reported by Mint on Thursday, the tax authority is on a massive data-crunching exercise that will make it difficult for tax evaders to remain unnoticed.
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