Income Tax Department probes 394 entities over suspicious foreign remittances

The Income Tax Department has launched a nationwide verification exercise targeting 394 entities and 36 professionals suspected of irregular foreign remittances over the last three years. According to the Central Board of Direct Taxes (CBDT), the investigation follows data analysis and ground intelligence indicating that these entities remitted large sums of foreign exchange despite reporting little to no business turnover or failing to file tax returns.

Many of the suspected entities appear to be shell companies that do not operate from their declared addresses. The stated purposes for these transfers, such as software imports, consultancy services, and freight payments, were found to be disproportionate to the entities' financial profiles. The probe also uncovered a network involving fictitious charitable trusts used to facilitate accommodation entries through bogus donations.

Additionally, the department is scrutinizing a small group of professionals who issued a high volume of Form 15CB certificates, which are required to certify the taxability of foreign payments. In Tamil Nadu, searches were conducted at multiple locations, including premises associated with Surya Tech Solutions Private Limited in Chennai, as part of the broader crackdown on financial irregularities involving foreign-based organizations and small Indian companies.