Press Release, dated 10-11-2012

What this is

Press Release, dated 10-11-2012 was issued by the Central Board of Direct Taxes on 10 November 2012. Its subject is Government in a Statement States that Appropriate Action has been Taken on the Information Received by it from the Government of France in June 2011.

What it does

States the Government's position on information received in June 2011 from the Government of France about bank accounts reportedly held by certain individuals and non-individuals in a foreign bank. The information has been analysed, the jurisdictional authorities have taken up investigations under the Income-tax Act, 1961, and enquiries with foreign tax authorities for more information on the reported account holders are in progress. Further action, including assessment, tax collection and levy of penalty, will follow the provisions of the Act and the facts of each case. The information is covered by the confidentiality clause of the double taxation avoidance convention between India and France and can be used only for the tax purposes specified there.

Why it was issued

The matter had been raised in Parliament — in the Lok Sabha debate on an adjournment motion on 14 December 2011 and in answers in the Rajya Sabha on 23 August 2012 — and the Government issued the statement to say what had been done.

Who it reaches

• Persons named in the information received from France as holding foreign bank accounts
• Advisers handling notices arising out of foreign-source account information
• Officers investigating such cases

The instrument, as the Board published it

Government in a Statement States that Appropriate Action has been Taken on the Information Received by it from the Government of France in June 2011
PRESS RELEASE, DATED 10-11-2012
Information was received in June, 2011 by the Government of India from the Government of France relating to certain bank accounts reportedly held by certain individuals/non-individuals in a foreign bank .Reference to this matter was made by the then Finance Minister during the course of the debate on an adjournment motion in the Lok Sabha on 14-12-2011. Subsequently, answers to questions on this matter were furnished in the Rajya Sabha on 23-8-2012.
Information received from the Government of France has been analysed and investigations into the information have been undertaken by the different jurisdictional authorities under the Income-tax Act, 1961. Investigations in the matter are under progress including with the foreign tax authorities to obtain more information with regard to the reported account holders. Appropriate action has been taken on these cases and further action including assessment, tax collection and levy of penalty will be taken as per the provisions of the Income-tax Act, 1961 and based on the facts of each case.
It would be pertinent to point out that the information received from the Government of France is covered by the confidentiality clause under the Double Taxation Avoidance Convention (DTAC) between India and France and can be used only for the tax purposes specified there in.
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What to watch

• The confidentiality clause of the India-France convention limits the use of the information to the tax purposes specified in it, which is the point to press if the material travels beyond that.
• The release announces investigation, not any finding; assessment and penalty were to follow on the facts of each case.
• It is a press statement, not an instruction conferring any right or relief.

Where you meet it

On a notice or a penalty proceeding built on information sourced from a foreign government about an offshore bank account.

← Letter [F. NO. HRD/CMD/123/2/2011-12/2301], dated 23-11-2012  ·  Press Release, dated 9-11-2012 →