Information from Financial Intelligence Unit-India (FIU-IND) and confidentiality

By Vijay Kumar

FIU-IND is an intelligence organization under Ministry of Finance and provides information to designated agencies as per the established protocol of sharing of information. Information is provided by FIU-IND under section 66 of the Prevention of Money Laundering Act, 2002.

FIU-IND is in receipt of numerous letters and notices under section 133(6), of Income Tax Act from various field units of CBDT calling for information regarding bank accounts, assets etc. of the assessees which are required for recovering tax arrears.

Financial Intelligence Unit-India (FIU-IND) is the designated authority under Prevention of Money laundering Act, 2002 (PMLA) to receive information from different reporting entities. Accordingly, it has a database of bank accounts and transactions therein, transaction in securities, insurance premium paid on policies etc.

FIU-IND shares information spontaneously and on request basis with, inter alia, CBDT under Section 66 of PMLA. Also, Central Board of Direct Taxes (CBDT) and FIU-IND have executed Memorandum of Understanding (MOU) for exchange of information. On the basis of these, Income Tax Authorities under CBDT can seek information from FIU-IND for both domestic bank accounts etc as well as those from foreign countries. Such information may be extremely useful for recovery from bank accounts hitherto unknown to Income Tax Authorities or bringing to tax the transactions that might have been done through undisclosed bank account(s).

In this connection, CBDT's Directorate of Income Tax (Recovery) reiterates that:

1. requests to FIU-IND may be made only through the Directorate of Income Tax (Recovery) as the FIU-IND will not entertain direct requests from the Field Authorities/Officers.

2. information received from FIU-IND is confidential and utmost confidentiality must be maintained in handling and with respect to custody of such information.

3. Information should be protected from unauthorized use and proliferation.

4. The information received from FIU-IND, domestic as well as foreign, needs to be treated as intelligence and the same be further developed by the department's own investigation.

5. FIU-IND will not be mentioned as the source of information in any place or occasion or document like assessment order/correspondence etc, except when required by a competent court of law.

CBDT Directorate of Income Tax (Recovery)F.No.1(153)/DIT(R)/I.T. DEMAND CATE./2015-16/1704., Dated: February 15, 2016