IT’S OFFICIAL: RS4,479 CR STASHED IN SWISS BANKS
The Income Tax Department has informed the Special Investigation Team (SIT) on Black Money that prosecution proceedings for non-furnishing of account details by Indians stashing black money abroad are in progress in 27 cases (under Section 276 D of the I-T Act) and has even filed a case in court in one instance. As many as 339 Indians have been found to have stashed Rs4,479 crore in Swiss banks, while domestic unaccounted wealth to the tune of Rs14,958 crore has been traced, even as the SIT recommended stringent measures to check the menace.
The Supreme Court-constituted SIT has recommended amendments to laws to provide for confiscation of domestic properties of those with illicit assets abroad and making tax evasion of over Rs50 lakh a ‘predicate offence’ or a serious crime to facilitate necessary action under the Prevention of Money Laundering Act (PMLA).
Prosecution for willful attempt to evade tax by the black money stashers is also being contemplated in appropriate cases under Section 276 C (1).
The classified 104-page report (minus the annexure) of the SIT on Black Money report, accessed by The Pioneer, said search and seizure operations have been initiated by Income Tax Department in (142 cases), survey (8 cases), open enquiry (418 cases), suo motu action (17 cases), others including discreet enquiry in the remaining cases.
In its report submitted to the SC, the SIT has said of the total 628 people (613 individuals and 15 non-individuals) specific amount was mentioned against 339 people and no amount was mentioned against 289 people.
Investigation by the I-T department has revealed that there are 532 traceable cases, 412 resident cases and 319 instances where the account holders of black money have admitted to own such illicit bank account abroad.
Of these, as many as 122 cases appear to be repeated entries i.e. joint account holders/beneficiaries or jointly associated with the accounts.
Consent waiver exercise has been undertaken in 174 cases from the account holders of the HSBC bank and more details being sought by
India from the Swiss authorities. Concealment penalty proceedings have been initiated in many of the cases, the report said.
Following efforts made by India to persuade/pressurise HSBC, Geneva to share information, HSBC representatives appeared and expressed difficulty citing Swiss secrecy laws. Subsequently, a suitable scheme was devised-consent waiver to be obtained from account holders/beneficial owners/authorised signatories and sent to the bank- in response, the bank would send account details to account holders which, in turn, could be obtained by the Income Tax Department
from the account holders. HSBC Geneva suggested the requisite proforma of the consent waiver.
In 75 cases, CDs containing account details could be obtained from account holders/beneficiaries and brought to CBDT for verification.
Assessments in 14 such cases (where information received through consent waiver route) have been completed and in remaining cases likely to be completed soon.
Assessments completed in 65 other cases (including the cases decided by Income Tax Settlement Commission) so far.
With Swiss authorities taking the ground that information requested by CBDT on the basis of stolen data and their domestic laws not permitting exchange of information and prior notification to the account holders, India has told the authorities in that country that information was requested on the basis of data received from a sovereign country under legal framework of DTAC and it could not be termed as ‘stolen data’ and hence all data should be shared.
Action taken so far by CBDT in connection with the probe into black money include proper references to the relevant foreign jurisdictions through Indian competent authority in all the cases and expeditious investigation in all the cases in which details are available. The CBDT also told the SIT that all possible efforts have been made to trace the persons reported as non-traceable.
The I-T department has also asked these assessees through notices to produce the relevant information, including bank statement and account opening details, and in case of non-compliance penalty and prosecution will be initiated. Expeditious completion of enquiries and assessments are underway in cases where requisite details have been obtained.
References to foreign jurisdiction (including Switzerland) sent through Indian competent authority in almost all the cases where requisite details are available (2012, 2013).
Before finalising its report, the SIT examined the quantum of efforts undertaken by investigation wing of CBDT in specific cases of HSBC to assess the seriousness and effectiveness on the part of CBDT in dealing these cases and find out operational difficulties and challenges faced by them.
The list of these 628 Indians operating illegal bank accounts in HSBC, Geneva was handed over by France to India under Double Taxation Avoidance Convention (DTAC) and the information included summary sheet containing name of associated entities and nature of association, peak balance in certain period/month (relating to assessment years 2005-06, 2006-07 and 2007-08) in certain cases and bank account numbers in other cases.
