The Board has clarified that only relevant and precise information will be shared by tax authorities with other government departments and that too by maintaining appropriate confidentiality.
“It is clarified that income-tax authority shall furnish only relevant and precise information after forming an opinion that furnishing of such information is necessary so as to enable the above notified authority to perform its functions under the law being administered by it; and convey to the authority being specified vide this notification to maintain absolute confidentiality in respect of information being furnished,” the Board said in the notification dated July 30.
Recently, similar notifications and memoranda of understanding have been issued for exchange of information between income tax authorities and Securities & Exchange Board of India, Central Board of Indirtect Taxes and Customs, Ministry of Micro, Small and Medium Enterprises, Narcotics Control Bureau, Intelligence Bureau, National Investigation Agency, Cabinet Secretariat, Ministry of Agriculture, among others, Section 138 of Income Tax Act.
CCI generally requires extensive financial information to investigate, whether an entity or group has a dominant position in the market or not and whether any transaction or arrangement would result in a situation eliminating competition from the market. Income tax department can be an authentic source of such financial information required by the CCI, experts said.
“This is another step taken by the government for improving coordination and flow of information between different government departments and will ensure that investigations/ proceedings carried out by different government departments are performed smoothly and efficiently,” said Rakesh Nangia, Chairman, Nangia Andersen India.
The word of caution with regards to the scope of sharing information with CCI, appears to be an advisory to avoid information overload and to alleviate concerns of taxpayers regarding unnecessary publicity of their information, he added.