9 lakh companies not filing returns: Revenue Secretary

Tribune News Service

New Delhi, April 29 

Pointing to the hazard of a large number shell companies being used for money laundering and tax evasion, Revenue Secretary Hasmukh Adhia today said close to 9 lakh registered companies were not filing annual returns with the government.

The Ministry of Corporate Affairs (MCA) has sent notices to nearly 3 lakh unlisted companies, asking them to deregister themselves and issuance of notices to the remaining is under way.

Speaking at an Enforcement Day event here, Adhia said of the 15 lakh companies, only 6 lakh are filing their returns, including annual audited report, with the MCA.

“How can we have in this country almost 8-9 lakh companies which are not filing any return to the government and they have become a potential threat, a potential source of money laundering. So, the task force has taken it up in right earnest,” he said.

In a crackdown on domestic shell companies, the government in February had decided to take “harsh punitive” action, including freezing of their bank accounts used to launder money or evade taxes. The PMO-constituted task force with members from regulatory ministries and enforcement agencies held its meeting this week.

The top official said of the 9 lakh companies which do not file return with the MCA might not be shell companies and just be idle ones not transacting any business.

According to Adhia, trade-based money laundering is also becoming a potential big source of money laundering these days as was witnessed in the Rs 6,000-crore Bank of Baroda case. The case was successfully cracked by the Enforcement Directorate and the Directorate of Revenue Intelligence.

He said the government “is trying to improve the quality of manpower and is working to fill vacancies in the ED”.

Adhia said demonetisation had taught the department various ways in which people try to launder money, including through multiple entries in shell companies.

Jaitley to ED: Use penal powers ‘expeditiously’

New Delhi: Finance Minister Arun Jaitley on Saturday said penalising powers of the Enforcement Directorate (ED) should be used “expeditiously” in cases of non- compliance. Speaking at Enforcement Day here, he called on the agency to “strictly” enforce law to help the exchequer raise legitimate revenue. “As we move from a developing economy to developed economy, we will also be moving to a voluntary tax-compliant society.” “There is an expectation of compliance and in the event of non-compliance, there is the power of penalising that the ED has. This power has to be expeditiously used whenever violations are detected,” the minister said. TNS

(With agency inputs)