Circular No. CBDT Press Note

What it does

Announces that searches on 18 and 19 January 2011 on three commodities traders in Delhi yielded Rs. 44.20 crore in unaccounted cash, the department's largest cash seizure to that date, with undisclosed income of Rs. 155 crore admitted. It records that the persons searched were raising money from the public promising extraordinarily high returns, operating across Delhi, Punjab, Haryana, Rajasthan, Uttar Pradesh, Bihar, Maharashtra and Andhra Pradesh. It also mentions a search at Asansol in West Bengal shortly before, where cash and bank deposits of Rs. 12.57 crore were seized and Rs. 150 crore of undisclosed income was admitted, and says the department had detected about Rs. 15,000 crore of unaccounted income in search operations over the preceding couple of years.

Why it was issued

To publicise the outcome of the searches and the department's continuing drive against tax evasion.

Who it reaches

Persons collecting deposits from the public on promises of high returns
Commodities traders and similar cash-intensive businesses
Depositors who placed money with the searched persons

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

Seizure of unaccounted cash during search and seizure actions

CBDT PRESS NOTE

20.01.2011

In search & seizure actions conducted by the Income Tax department on 18th & 19 th January 2011, unaccounted cash amounting to Rs 44.20 crore was seized. This is the largest ever cash haul by the Income Tax department.

The searches were conducted on three commodities traders in Delhi. These persons were found to be raising money from the public promising extraordinary high returns. The area of operation of these persons was Delhi, Punjab, Haryana, Rajasthan, UP, Bihar, Maharashtra, Andhra Pradesh, etc.
These persons altogether admitted undisclosed income of Rs 155 crore.

A few days ago, a similar search was conducted by the Income Tax department in Asansol in West Bengal. In that search also, cash and bank deposits amounting to Rs12.57 crore were seized and the persons involved had admitted undisclosed income amounting to Rs 150 crore.

The drive against tax evasion is an ongoing process. In the last couple of years, Income Tax department has detected unaccounted income to the tune of Rs 15,000 crores in its search & seizure operations. There have been several cases wherein unaccounted income of over Rs 100 crore was admitted and due taxes paid.

What to watch

This is a press note reporting seizures and admissions; it states no rule and creates no obligation.
An admission of undisclosed income during a search is a starting point, not an assessment — the liability follows only on assessment.
Nothing in it identifies any legal position that can be relied on in a proceeding.

Where you meet it

Nowhere in a taxpayer's own proceeding; it is departmental publicity about search outcomes.

← Circular No. No.402/92/2006-MC (02 of 2011) · Circular No. 1/FT&TR/2011 [F.No.500/15/2011-FTD-I] →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.