The income-tax department’s hands are tied by the law even if it wants to go after Ottavio Quattrocchi, following the observations of the Income Tax Appellate Tribunal (ITAT). Sections 148 and 149 of the Income Tax Act prevent authorities from reopening assessment in any case that goes beyond six years.
The provision, which was brought in to protect the interest of taxpayers, now stands in the way of the I-T department, making any action against the Italian businessman almost impossible. Interestingly, ITAT’s observations against Quattrocchi came in a tax dispute case involving Win Chaddha, another middleman accused of receiving kickbacks.
The tribunal also observed that since Quattrocchi was living in India for a considerable time the issue about his tax residence status should have been verified.
As per the provisions in the Income Tax act, any one who has stayed in the country for more than 180 days is considered a resident.
A foreign citizens who become residents has to obtain an I-T clearance certificate from tax authorities before he can leave the country. An individual or a company is also required to stand guarantee for tax purposes when such a person leaves the country.
Congress worried of Opposition Parties
There are worries in Congress that IT tribunal’s order on Quattrochhi has the ammunition to trouble the party as it comes in the middle of the opposition’s aggressive campaign against the Centre over corruption.
Congress feels the timing of the IT order is tricky and not the “so-called new facts” on Bofors issue which is past its use-by date.
The discussions in Congress have led to a conclusion that the party position has not changed after the IT order.
AICC spokesman Abhishek Singhvi said, “We are not concerned about individuals like SK Bhatnagar or Win Chaddha or Quattrochhi. We are not worried if Chaddha has to pay the tax or not. Our only concern is the fair name of Congress and Rajiv Gandhi. Nothing has been produced linking Rajiv Gandhi with any payment in last 22 years which have included the NDA rule.”
The political cost of the IT order is seen to lie in its timing as it comes when Congress is trying its best to emerge from the CWG and 2G mess in the face of a united opposition campaign.
A renewed Bofors bogey from the Opposition may feed into its charge that UPA had turned down the demand for JPC to stop the truth behind the scams from coming out. “It may aggravate the situation despite common knowledge that the Bofors case has been quashed in the courts,” an AICC officebearer said.
A Bofors-fuelled BJP-Left aggression could take sheen off the anti-corruption agenda that Congress has unveiled to blunt accusations.