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The multi-agency group (MAG) constituted by the central government to investigate the Paradise Papers on offshore financial holdings is planning to take stringent action against tax evaders named in the leaked documents.
According to sources, the group, headed by the Central Board of Direct Taxes chairman and having representatives from the Enforcement Directorate, the Reserve Bank of India, and the Financial Intelligence Unit, has called its first meeting on December 1 to discuss the strategy to clamp down on the people who allegedly parked their illicit money outside India.
Income-tax (I-T) officers from all over the country have been asked to come up with proposals to tackle the challenges that the investigation is facing. During the videoconferencing on Friday, taxmen are also expected to brainstorm several ideas, many of which would be technology-driven.
“The task force will also review the challenges, especially the information-sharing hurdles, the tax department is facing from overseas jurisdictions as has been our observation in the Panama leaks,” a senior I-T official said. “In such cases, we rely upon information and intelligence from foreign authority. However, they have been evasive when it comes to sharing confidential information about particular entities,” the official added.
The Paradise Papers revelations, which followed the Panama leaks, form part of the largest-ever leak of financial data involving two companies – Bermuda’s Appleby and Singapore’s Asiaciti -- which helped the global rich and powerful, including from India, to move their money abroad. After these leaks, the government constituted the MAG to investigate the cases.
According to another I-T official, they would apprise the MAG of the progress made in the Panama Papers cases. The department had made references to all related countries and intermediaries as shown in the International Consortium of Investigative Journalists website, but it has not received responses yet. Even the queries with respect to passport details went unanswered. Besides, the department also tried to find answers from social media sites such as on Facebook and Instagram, but was unable to “link footprints”.
“The task force had directed us to fast track investigations in the Panama Papers cases and conclude them in a stipulated time,” said an official privy to the development. Sources said the government was not satisfied with the progress in the Panama investigation.
According to the latest data, the tax department has identified only 147 actionable cases out of total 426 people named in the Panama leaks. Based on the analysis of the information obtained, investigations have led to the detection of undisclosed income of about Rs 792 crore so far.
The department has listed the remaining 279 cases as “non-actionable”. An official said, “We categorise cases as non-actionable when we are unable to get their footprints in the PAN (permanent account number) database and other internal databases. In some of the cases, they are non-traceable as details provided by overseas authority are incomplete.”
Data suggests that 46 searches and surveys have been conducted so far across the country, and criminal prosecution complaints have been filed in just five cases. In seven cases, notices have been issued under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
The Mumbai cases, where granular data is available, revealed that of the 139 names belonging to the jurisdiction, only 23 have been identified as actionable cases.