I-T Dept cracks down on suspicious entities sending funds abroad

NEW DELHI, AUG 18 (PTI): The Income Tax Department on Tuesday conducted a nationwide field verification exercise, including in some border districts, against a group of entities and fictitious charitable trusts alleged to have sent “large” amounts of funds outside India.
Officials told PTI that the alleged illegal transactions are worth a few crores of rupees and were being sent to about a dozen foreign jurisdictions. “On 18.08.2026, the department launched a nationwide detailed exercise to verify these foreign remittances, focussing on shell entities, the persons behind them, and the professionals who issued Form 15CB certificates. “Entities located in districts along the country’s land borders and remitting significant amounts of money abroad have also been covered in the exercise,” the Central Board of Direct Taxes (CBDT) said in a statement.
The ongoing exercise covered approximately 394 entities, including 117 located in land-border states, and 36 professionals, the CBDT said. CBDT is the policy-making body for the Income Tax Department.
Officials said the broad contours of these “suspicious” foreign remittances were also discussed during a high-level border security meeting held in West Bengal in July and the taxmen were asked to probe the “entire backward and forward linkages” of these transactions.
This action followed a country-wide search operation undertaken sometime back that uncovered a network of entities remitting funds abroad. The searches targeted a group of “fictitious” charitable trusts involved in providing accommodation (hawala) entries against bogus donations/contributions, according to the CBDT.
“Preliminary ground verification revealed that the entities making these remittances were either non-filers or were filing income tax returns showing very small turnovers,” it said.
The turnovers showed “no apparent correlation” with the large amounts of money being remitted abroad.
They also did not appear to match the stated purpose of the remittances, such as payment for freight, import of software, or import of consulting services, the tax department found.
The department developed further intelligence and found that these entities were not actually operating from their declared addresses.
“Further analysis of the data also revealed that a large number of Form 15CB certificates were issued by a relatively small group of professionals,” the statement said.
It added that the remitted funds were also received by a “clustered” group of entities.
Form 15CB requires the accountant certifying a foreign remittance to verify its taxability with reference to the books of account and other relevant documents.
“However, the findings raise concerns about whether adequate due diligence was carried out by the accountants before issuing these certificates,” the CBDT said.
The statement “emphasised” that accountants issuing certificates in Form 15CB/Form 146 exercise due care, diligence and professional judgment.
“They should properly examine the underlying transactions and relevant facts before certifying the remittances, as these certifications play an important role in maintaining trust in the system,” it said.