Hyderabad: Income-Tax officials are handing over cases related to erring jewellers to the Enforcement Directorate (ED) where the Prevention of Money Laundering Act is involved. They are also imposing penalty as per the Income-Tax Act.
I-T officials intend to crack down on jewellers who sold gold for high prices for demonetised Rs 500 and Rs 1,000 currency notes after November 8. As per the Income-Tax Act, officials have the power to send notices under Sections 68 and 69 seeking explanation on the unexplained amount deposited in banks or held personally.
An official from the I-T department said that if the respondent failed to provide a proper explanation, they could impose penalty on the taxable amount from 100 per cent to 300 per cent.
“They should pay 30 per cent tax plus 10 per cent towards Krishi Kalyan cess and Swachh Bharat cess. We impose a penalty on the tax which could be 60 per cent and total to 100 per cent followed by 90 per cent (200% penalty) and 120 per cent (300% penalty),” the official said.
Most jewellers were confident that they could escape prosecution by I-T officials by paying the penalty if they received notices. But an I-T official said, the jewellers would not be able to escape ED cases on money laundering.
“Most jewellers sold gold at high prices after demonetisation and illegally collected old Rs 500 and Rs 1,000 notes against the guidelines issued by the Reserve Bank of India. This fraud comes under money laundering and quid pro quo in which customers disposed their demonetised currency by investing in gold. We have decided to hand over such cases to the ED for further investigation. We will take up the cases under Income-Tax Act and Benami Properties (Prohibitions) Act. The ED can register cases suo motu (by itself( and there is no need of pre-investigation by any other agency,” the official said.
A source from the Enforcement Directorate said that there was a difference between sections and cases filed by the ED and the I-T department. “I-T officials should prove the violations done by accused persons to impose penalty after an appeal filed by the respondent. With the ED, the accused persons should prove themselves innocent to avoid arrest. In Saturday’s jewellery shop case, the proprietor should prove himself to be genuine for deposits worth more than Rs 100 crore from November 10 to November 17 in their bank accounts,” the official said.
