Centre gives black money full list to SC, names to remain secret

HT Correspondent, Hindustan Times  New Delhi, October 29, 2014

First Published: 09:16 IST(29/10/2014) | Last Updated: 10:26 IST(30/10/2014)

The government on Wednesday submitted a list of 627 Indians holding accounts in HSBC Bank, Geneva, to the Supreme Court, which directed its special investigating team (SIT) to examine them and take appropriate action.

Handing over a sealed envelope, attorney general Mukul Rohatgi said it contained three documents — the government’s correspondence with the French government, the list of names and a status report.

A special bench headed by Chief Justice of India HL Dattu refused to open the envelope, saying it would be done by the SIT chairman and vice-chairman. “We don’t want to open these papers and embarrass anyone. That has never been our intention,” it said.

Scheduling the next hearing for December 3, it asked the SIT to submit a status report by November 30 after ascertaining who had black money accounts abroad.

The Centre had on Monday disclosed eight names in an affidavit — including those of Dabur India promoter Pradip Burman, a bullion trader and the directors of a Goa mining company, all facing prosecution. Earlier, it had revealed 18 other names.

On Tuesday, the top court directed the government to submit the full list after the latter said it wasn’t possible to make the names of all foreign bank account holders public as all of them may not be guilty of tax evasion. Rejecting the Centre’s submission that such action would breach the privacy of legal account holders, the CJI said, “If it breaches confidentiality, let it be so.”

But on Wednesday, when Rohatgi asked him to open the sealed envelope, he refused to do so.

It was also not clear why the court insisted on getting the list from the government when the latter had submitted it to the court-appointed SIT in June.

Rohatgi told the court the details of account holders were for the year 2006. The data, stolen from HSBC in Geneva, were supplied to France, which passed it on to India in 2011. He said half the account holders were Indian residents who could be prosecuted under income tax laws and the rest were NRIs. Several have admitted to holding foreign accounts but maintain they have paid taxes, he added.

Rohatgi also told the court that most transactions had taken place during 1999 and 2000 and under law, the last date for completion and assessment of all cases was March 31, 2015. Under the IT Act, prosecution for tax evasion can be initiated up to 16 years after the offence.

According to SIT chairman MB Shah, the report submitted by the government has no new details, and the list was the same as the one given to it earlier this year. “We have to question the people named in it,” he told a TV channel.

“The probe is difficult. There is no eyewash. The report will take time. We have already filed the first report in August. I’m hopeful that we should be able to file the final report by next year,” he added.

The Centre, meanwhile, was allowed by the court to raise its objections against making all the names public before the SIT.

“The SIT is headed by two retired SC judges. They are not laymen. Tell them the problems you may face if the names are revealed and let the SIT take a decision on future course of action,” it said.

Prime Minister Narendra Modi set up the SIT team comprising regulators and ex-judges to identify illicit fund-holders and repatriate money on the first day in office, as part of a wider clampdown on corruption that he promised during his election campaign.

The ruling Bharatiya Janata Party (BJP) had also accused the previous Congress government of failing to crack down on Indians parking billions of untaxed dollars abroad.

The issue of disclosing the names of foreign bank account holders hogged the political limelight recently, with Jaitley saying the opposition party would be embarrassed if such a revelation was made.

The Congress, on its part, asked the government to come out with complete information without indulging in “selective leaks” and pointed out that “the Congress is not going to be blackmailed under any such threat”.

The NDA government said on Monday that Swiss authorities had agreed to provide information to help India investigate leaked accounts, after earlier saying such assistance would break Swiss law.

The court is hearing a public interest petition filed by former law minister Ram Jethmalani in 2009 seeking a direction to the Centre to bring back black money stashed by Indians abroad. Jethmalani had accused the government of attempting to shield powerful politicians and businessmen.

Aam Aadmi Party chief Arvind Kejriwal has also filed an application requesting the court to hear him in the matter.

While there are no official estimates, Global Financial Integrity (GFI), a Washington-based think-tank, has estimated that Indians had salted away $462 billion (about 28 lakh crore in current exchange rates) in overseas tax havens between 1948 and 2008.

Black money arises mainly from incomes not disclosed to the government usually to avoid taxation, and, sometimes, because of its criminal links. About a third of India’s black money transactions are believed to be in real estate, followed by manufacturing and shopping for gold and consumer goods.

The Congress, meanwhile, said the central government cannot take credit for revealing names of people holding black money abroad when it did so on a Supreme Court directive.

“It is wrong for anyone to take credit for anything that is (being done) by the order of the Supreme Court,” party spokesperson Abhishek Singhvi said.

The BJP’s estranged ally Shiv Sena, too, credited the Supreme Court with bringing out the names in the first list in public domain.

“Blackmoney was made a major issue during the Lok Sabha elections (of 2014). The government will not understand how difficult it is to bring back the blackmoney stashed abroad. The Centre has only revealed three names, but the credit for that will go only to the Supreme Court,” the Sena said in an editorial in its mouthpiece ‘Saamana’, describing the names revealed so far as only a ‘tip of the iceberg’.

Continuing with his attack on the government, Kejriwal accused the Centre of sparing the big fish holding black money abroad.

“There should not be selective revelation of names. The big fish are being let off,” he told the media.