The Special Investigation Team (SIT) on black money has found that less than half of the HSBC bank list of over 600 accounts did not have any money while more than hundred names were a repeat, hampering the possibility of any action against them.
The Income Tax department is now mulling prosecution against 300 entities figuring in the list of 628 entries in the HSBC Geneva list given to the Supreme Court recently, official sources said.
“The SIT found that the biggest impediment in taking action against the people listed in this particular lot was that there were no details about the operations of these accounts. It was not reflected in the list as to when these accounts were opened and what was their transaction history,” the sources said.
The report of the SIT, headed by retired Supreme Court Judge M B Shah with Justice (retd) Arijit Pasayat as its Vice-Chairman, said the I-T department had undertaken 150 search or survey operations against those named in the list but prosecution proceedings were yet not final against them.
“Now that this list has been handed over to the apex Court and the cases are nearing time barring stage by the end of this fiscal, the department is mulling to launch prosecution in close to 300 cases,” they said.
The SIT has also sought “renegotiation” of various tax information exchange treaties which India has with various countries and tax haven nations in order to effectively curb the menace of illegal funds stashed abroad.
In the report submitted to the government early this year, the SIT has cited the areas of concern for the investigating and enforcement agencies which are tasked to keep a check on these ‘black’ funds and illegal economy.
“The SIT has asked the government to take up renegotiation of the existing Double Taxation Avoidance Agreements (DTAAs) and the Tax Information Exchange Treaties (TIEAs) in context of some specific countries.
“This is a time-consuming affair but an early start would help the country in accomplishing its desire to crack down on illegal funds kept overseas by Indians,” official sources said quoting the SIT report.
As a consequence of this specific request, the government told the SIT that the Finance Ministry has already begun the exercise in this direction.
“The government informed the SIT that out of the 78 DTAAs India had, renegotiation has been taken up with 75 countries for providing banking information under this legal mode of exchange of tax information. The other three countries– Tajikistan, Iceland and Myanmar– already have this arrangement,” sources said.
The government also told the SIT, sources said, that it has completed renegotiations in approximately 31 cases, has sought the approval of the Cabinet for the same in about 30 cases while India is wanting to have new DTAAs, which will include banking related clauses, with over 50 countries.
In the same report, the SIT also noted an “innovative” method undertaken by the CBDT against these people by allowing them to seek details from Swiss banks themselves in lieu of which they will be allowed waiver in imposition of strict punishment under tax laws.
“The consent waiver was given to over 100 account holders so that they themselves seek information on their Swiss bank accounts and hand it over to the tax department following which they will be prosecuted under lighter degrees of law,” they said.
The SIT has also desired that it would want the Enforcement Directorate (ED) to act as the nodal agency for its operations as it enforces the stringent criminal law of Prevention of Money Laundering Act against black money hoarders.
The SIT has recently also announced that it would seek information against black money hoarders from the public and it will soon announce the communication channel to be used by the general public in this regard.