At the centre of discussion of the Special Investigation Team - headed by retired Supreme Court Judge MB Shah - are close to half-a-dozen black money cases in which information has been received from a foreign jurisdiction by the Income Tax Department or allied agencies, sources said. However, this information cannot be shared with any other investigative agency as a strict non-disclosure of information clause accompanies these information exchange treaties, they added.
The SIT, sources said, would look into the possibility of requesting competent courts and the relevant authorities in foreign jurisdictions for permission to share with other agencies the data obtained by the Central Board of Direct Taxes and the I-T department.
The agencies for which the data access could be requested include Enforcement Directorate (ED), Directorate of Revenue Intelligence, Reserve Bank of India and CBI, so that suspects in such cases can be probed from various angles and under provisions of criminal laws. CBDT and Income Tax department obtain data from foreign nations and tax haven jurisdictions under Double Taxation Avoidance Agreements (DTAAs) or Tax Information Exchange Agreements (TIEAs).
Officials said that a full-fledged foreign exchange violation and money laundering probe in the LGT Bank accounts case has been slowed down due to restrictions on information-sharing between various agencies. "The agencies only have access to a limited number of documents in the LGT case and hence the probe is not (progressing at the pace it) should. If the documents are available, prosecution can easily be started in these cases with regard to contraventions in the foreign exchange domain and possibly money laundering laws too," officials said.
India, at present has over 80 operational DTAAs and 40 TIEAs. The government had imposed a penalty of Rs 24.66 crore on 18 individuals who have bank accounts with Liechtenstein's LGT Bank on the basis of information provided by German authorities.
Germany had in 2010 provided the names of some Indians who held secret accounts in Liechtenstein's LGT Bank. These names were part of about 1,400 stolen bank account details purchased by Germany. The Income Tax department alone has reported collecting 7,704 "discrete items" of information from treaty countries containing details of payments received by Indian citizens in various countries, besides information on LGT bank accounts. The government had said that this information is in "various stages of processing and investigation". Also, during the last financial year, CBDT's foreign taxation wing made more than 175 requests to treaty partner countries in case of "specific taxpayers".
Investigators probing these cases have confirmed that a number of these are good from the point of view of getting revenue and achieving success during prosecution for tax evasion and cheating of foreign exchange. The SIT, formed upon the directions of Supreme Court, had held its first meeting on June 2 here and will meet again in the middle of this month for a second time. Retired apex court judge Arijit Pasayat is the Vice Chairman of the SIT while top officials of 11 high-profile agencies and departments are its members.
The government, after the first meeting of the SIT, had said that the detailed modalities of proceeding further with the Supreme Court mandate were discussed and the roadmap decided. The SIT's mandate, as notified by the Department of Revenue (under the Finance Ministry), requires it to go into "all issues relating to matters concerning and arising from unaccounted monies of Hasan Ali Khan and Kashinath Tapuriah". Pune-based Khan, a stud farm owner, was arrested by Enforcement Directorate in connection with money laundering and tax evasion cases. Tapuriah is his aide.
The other tasks of SIT include all investigations already started and pending or awaiting to be initiated with respect to any other known instances of the stashing away of unaccounted cash in foreign bank accounts by Indians or other entities operating in India. The panel has also been empowered "to further investigate even where charge-sheets have been previously filed and IT may register further cases and conduct appropriate investigations and initiate proceedings for the purpose of bringing back unaccounted monies unlawfully kept in bank accounts abroad." The SIT will also keep the apex court informed about all major developments by filing periodic status reports in this regard, the government notification had said.