source Business standard

[CS A Rengarajan]

Govt finds 130,000 firms without PAN  Surat is the new shell firm capital

VEENA MANI New Delhi, 15 November Aninvestigation the Ministry Affairs (MCA) more than 130,000 out of 224,000 taken did not haveapermanent account number (PAN) even as they transacted crores of rupees. Sources said the probe indicated only 93,000 firms off by the Registrar of Companies had PAN, which is mandatory transaction above ~50,000. The findings showed these firms did not pay taxes and made it difficult for the authorities to track their transactions, sources said. Absence of statutory filings was cited asareason for deregistering the firms. It is learnt that the Ministry of Corporate Affairs is now likely to examine whether all active companies have PAN or not. After the recent rounds of deregistration by RoC, 1.13 million companies remain active. The PAN issue adds to the concerns of the ministry over many banks failing to submit postdemonetisation transaction details of companies which were deregistered recently. State Bank of India (SBI), for instance, has not provided the ministry with the transaction details of companies struck off the registers, sources said. Aquery The government crackdown on shell companies has not stopped with deregistering 224,000 companies and disqualifying their directors. The MCA is probing 809 listed companies which are not traceable by the Securities and Exchange Board of India (Sebi), sources said. While 300,000 directors associated with the struckoff companies have already been disqualified, the number could cross 450,000 as the crackdown continues. Around 100 disqualified directors have appealed against the government´s decision in various high courts. Also, some 70odd companies have appealed against being deregistered. Inaseparate development, there wasa300 per cent jump in the number of applications for PAN postdemonetisation. Turn to Page 12 >Ministry of Corporate Affairs is now likely to examine whether all active companies have PAN or not CHOUDHARY 15 November urat has replaced Kolkata as the new capital of shell firms that evade taxes. According to the income tax (IT) department,aof the companies featuring on the new list of firms provided by the government are based in Kolkata had topped the first list. The tax department began tightening the noose shell firms earlier this year, as more details such companies to light after In the new list, tax have found over 80 per cent of the 2,138 shell firms, which deposited unaccounted cash of at least ~5,000 crore during the note ban, were from Surat. The tax department expects this number to go up. This list featured 5,800 shell companies, shortlisted by the finance ministry, which had deposits of ~17,000 crore in near zerobalance accounts after demonetisation and nearly an equal amount of withdrawal thereafter. Earlier, the tax department had identified 16,000 shell firms floated in Kolkata between 2011 and 2015, to launder money. The probe further revealed that Surat had becomeasafer bet for shell firms compared with Kolkata for two main reasons. Govt finds... Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra had said while there were around 250,000 PAN applications per month earlier, the number rose to 750,000 after the Centre announced scrapping of highvalue currency notes last November. The ministry has also found discrepancies in the data provided by many banks. Analysis of details sent by 13 banks reveals that about ~4,500 crore was deposited and withdrawn postdemonetisation. In fact, there are companies with over 100 bank accounts. One of the companies had 2,134 accounts. There were several companies with zero balance as on November 8, 2016 when demonetisation was announced, but some of them deposited funds running into crores of rupees after note ban. In fact, there were transactions by these companies even after their names were struck off. The surveillance of shell companies could intensify with their real estate coming under the scanner. The firms could be debarred from selling and transferring such properties. The ministry has asked state governments to identify properties owned by shell companies and put them in the custody of the district collectors concerned. While several chartered accountants suspected to be involved with the struck off companies came under scrutiny too, nothing has been found against them yet. The decision to deregister companies was taken underaspecial drive byatask force formed by the Prime Minister´s Office. The task force is working with other enforcement agencies and is jointly chaired by the revenue secretary and the corporate affairs secretary. >FROM PAGE 1

 

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