BBC has landed into a controversy after reports emerged that it confessed to underreporting its income by 40 crores in an email to the CBDT. This comes months after IT Department raids on BBC offices in Mumbai and Delhi.
“It is only a statement of intent so far, there is no payment,” a source said.
“The email has no legal sanctity. The BBC needs to file a revised return for it to be taken seriously,” said a senior CBDT official. Officials have said that BBC is yet to follow the formal procedures.
The I-T department had alleged that the income and profits disclosed by the organisation’s units were “not commensurate with the scale of operations in India”.
The BBC now will have to file revised returns and pay all dues, interests and penalties on the on its undisclosed liability, which is probably going to be in crores.
“BBC must act as per the stated procedure or face the law. The Department will continue to take action against it until the matter is taken to the logical conclusion,” the official said.
Under-reporting income or inflating deductions/exemptions in income tax return can attract heavy penalties ranging from 50% to 200% of tax evaded.
The rate of penalty shall be 50% of the tax payable on under-reported income.
However, in cases of under-reported income falling under misreporting of income, penalty shall be 200% of the tax payable on such misreporting of income.
Cases of misreporting of income include: –
(a) misrepresentation or suppression of facts;
(b) failure to record investments in the books of account;
(c) claim of expenditure not substantiated by any evidence;
(d) recording of any false entry in the books of account;
(e) failure to record any receipt in books of account having a bearing on total income; and
(f) failure to report any international transaction or any transaction deemed to be an international transaction or any specified domestic transaction, to which chapter X of tax act applies.