The I-T department has recommended that the assessing officer for the First Global group of companies launch a prosecution under sections 276 and 277 of the I-T Act, 1961, for concealment of income by the assessee.
In its detailed report after the department's search operations on the residential and office premises of First Global director Shankar Sharma, the department suspects "several instances of concealment of income". Accordingly it has recommended that the "assessing officer may launch prosecutions for concealment of income". Further, the department justifies this course of action since it suspects the First Global group of "furnishing of false information during the course of search under oath and denial of ownership of seized material".
Other reasons were the refusal to answer and sign the statement as well as total non-cooperation during the post-search and post-search proceedings, the department has said.
However, First Global director Shankar Sharma said in a faxed response, "First Global is one of India's top corporate and personal tax payers and has not evaded taxes and has never had a tax case made against it in its entire history. In fact, Income Tax officials have told us that the raids against us were motivated."
The I-T report also mentions about non-furnishing of the required information in time and not complying to the summons by directors or its employees as well as non production of books of accounts and other details as some of the other reasons for the start of proceedings against First Global.
Discussing the applicability of the various provisions, the report states that under section 276 C, 276 D and 277 of the I-T Act, the assessee is liable to prosecution. Provision of Sec 276 C of the act provides for prosecution for willful attempt to evade or pay tax.
Section 276 D provides that if a person willfully or deliberately does not produces certain books of accounts or other documents as required by the I-T authority for the purpose of determining proper tax liability.
Sec 277 is generally invoked where a false return of income is filed, or if there is a suppression or concealing of income in one way or the other. The report says that the above referred sections are very much applicable in this case.
