Govt investigating over 2,000 people flagged by MCA

The income tax department has started investigating the 2,627 people who are directors on board of more than 20 companies, and were flagged by the ministry of corporate affairs as violators of the Companies Act 2013.

The corporate affairs ministry had shared the details regarding these individuals with the special investigation team (SIT) on black money. Further, the tax department has also initiated probe into the companies where these people have been serving as directors to verify the genuineness of these companies. A senior official told The Indian Express that the probe has been started on the recommendations of the SIT, which had urged the corporate affairs ministry, the income tax department and the enforcement directorate to take action against the errant individuals.

“We have received details of 345 addresses which have at least 20 companies operating from the same address. Further, 13,581 companies share their address with at least 19 more companies. We are probing if they are genuine companies or just paper companies for routing black money,” the official added.

This is in continuation of the crackdown the income tax department had started early this year. The department had started investigation into issuance of cheques by companies which were acting as entry operators to convert illegal cash into legitimate money. In Kolkata, the alleged hub of such entry operators, the tax department has detected “substantial unaccounted income”, the official said. In these cases, the unaccounted income was sought to be converted into legitimate money with the help of non-genuine companies which were acting as entry operators.

“We are checking if these companies are also using similar strategy,” the official said. Further, instances of the alleged non-genuine companies issuing cheques in Delhi have also come to light.

Earlier, the income tax department had issued notices to about 50 persons and entities including two political parties in similar cases seeking information about the identity of the contributors.

The recommendation by the SIT, set up by the order of the Supreme Court last year, had urged the department to be proactive in detection of shell companies and ensure deterrent penal action through persons involved in creation of shell companies and providing accommodation entries.

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