Taxing times: What can help improve transparency?

The taxing time for India Inc with multiple corporates is coming under the taxman's scanner. With the news of an income tax official being allegedly bribed post the latest Everonn raid, serious questions have arisen. CNBC-TV18's Ashwin Mohan reports on whether it is time for the taxman to share more details post search and seizure operations.

Corporate tax lawyer HP Ranina said, "The income tax department needs to put its own house in order. Tax collection can go up dramatically if corruption comes down to a substantial extent."
The latest case of corruption to hit the taxman is of the Chennai-based Everonn, where the CBI arrested an I-T official for accepting bribe from a company official to reduce the concealed income detected during a raid on the company.
Is it time for revenue authorities to make official announcements post corporate raids to promote greater transparency? While some say that it should be made mandatory in the interest of shareholders and public interest, others simply disagree.
Ranina further stated, "Revenue authorities can make only a factual announcement of what has been found and declared by the raided taxpayer. Subsequently, if they come up with any new evidence or admission of concealment, then it could be made public."
TP Ostwal & Associates' founder TP Ostwal disagreed to the entire though and explained, "Expecting the department to leak this information would be fatal against the department's enquiry. There could be lots of repercussions and a number of cross ends required to be re-verified or cross-verified. Therefore, investigation requires confidentiality."
What safeguards could be put in place to avoid a repeat of Everonn case? Experts say that stricter monitoring is the key to it.
"When the search takes place, there should be CBI vigilance on the tax department so that these things can come to the notice of the public quicker. Then, there will be a check and balances," indicated Ostwal.
Experts agree that Everonn might not be an isolated incident, amending section 138 of the Income Tax Act, which relates to disclosure of information regarding assesses would also work towards improved transparency. Also watch the accompanying video for more...