Author Profile

Mayank Mahla

Gujarat National Law University 3rd Year

Posted On by &filed under Legal Articles.


Even in a growing and developing economy like India, the so called Emerging Superpower behind China, has a serious problem on Tax Evasion by the General Public. As per Government Data only 3.81% of the population pays income tax. The figure clearly gives a picture on the practicability of the Search and Seizure method of IT Department shown perfectly in Special 26 movie. As technology is getting Advanced so are these Criminals day by day and it’s time for the Department to rise in the same field too. The Panama Paper leak gave an insight on the people evading tax, but all are not covered under the same, hence a permanent solution to the problem was required. Hence as measure to widen Income Tax Department’s (ITD) search Ministry of Finance in May 2017 would launch Project Insight.

The same project would give access to authority to Social Media accounts, and using specialised Data Mining Techniques used by Facebook and Google to track it’s users. Such technique would help to identify potential tax evaders online, and keeping a track of its activities. Many Today like to flaunt their overseas travel, expensive cars etc. online or other keep a track of it but fail to declare accurate income in front of authorities. Hence such authority would be tracked by Tax authority, and on the basis of the Data mining now online raids would be committed. L&T Infotech Ltd would provide the technologies to track such users, the same is tactic currently being used by US Tax Authorities, to raid homes of Rich Instagram users lavishing their lifestyle to the public. Data Mining in layman’s term can be called Track of user Data or Posts online and comparing it with the actual returns to the authority.

If we look at demonetisation one might argue it for various political considerations, but there is one perspective people were unable to see. Demonetisation was a big step to promote paper less transactions through Debit Card, Credit Card etc., and the Finance Act,1998 made quoting of PAN compulsory for a number of transactions such as opening of bank account and deposit exceeding Rs 50,000, as a result, Section 139A of the Income Tax Act, read with rules 114B and 114C, makes quoting of PAN compulsory for certain transactions. Now Income Tax Department as a part of the said Project would have access to these transactions, the authority will track PAN quoted on financial transactions and then tally them with Individual tax filings. Hence now even if a Tax Evaders delete their data from their media, with the new Demonetisation they are forced to do most transactions paper less as a result the same transactions would now be under scrutiny of the Authority all the time.

Critics might argue in future about the serious threat to privacy of an Individual, as the same data many argue curtail right to privacy but when one uploads data on such platforms, he/she expects such data to be streamed by anyone online i.e. the same become easily available in the Public Domain. If we take example of US Internal Revenue Service (IRS) which is similar to our IT department, it has currently assess to all Social Media websites and since 2012 has extensively used all data available at such websites for locating potential tax evaders. The same provoked controversy with respect to people being targeted based on private information too. Initially it was legal for the IRS to use data in public, but later it used private information of a person as well. However finally it settled on not tracking a person’s personal email, but the same confidence was not given on other platforms. Hence in India it is currently not clear with respect private information also being assessed by the authority.
But if we take example of Panama or Swiss Bank account holders, such kind of people are protected just because of privacy and it took decades for our country to finally come to an agreement with such institutions. Hence for such serious crimes which although don’t affect the body but affect the overall economy at large and directly has an impact over our lives, an issue of privacy must be least of our concern. An ordinary middle class man, who regularly pays his taxes and does his best to afford enough for his family would find it least of his concern of Government Agencies tracking him. Although Right to Privacy is a fundamental right of an individual, but such right is not absolute, and as citizens sometimes for a better tomorrow we should sacrifice such right to make all such defaulters accountable for good.


Leave a Reply

Your email address will not be published. Required fields are marked *

* Copy This Password *

* Type Or Paste Password Here *

Loading Facebook Comments ...
Loading Disqus Comments ...