Black money: ED scanner on Indians named in HSBC list

The Enforcement Directorate (ED) has begun a preliminary investigation against Indians whose names figured in the Swiss HSBC bank black money list.

The agency has begun obtaining from various court registries details of the Income Tax department’s prosecution charge sheets filed against over 140 entities till now.

The ED and the Special Investigation Team (SIT) on black money had wanted these cases to be shared by the tax department and its apex policy-making body the Central Board of Direct Taxes with them. But, the request had been continuously turned down citing strict treaty obligations riding the exchange of data from the authorities of foreign shores by India.

Sources privy to the development say the agency, sometime back, finally decided to obtain the case reports from various courts in the country and examine them.

Some cases have already been obtained by the agency, they said. Some cases have already been obtained by the agency, they said.

Sources said a number of cases in the list, provided to India by the French government few years back after they were allegedly stolen by an employee, prima facie invite charges under the Foreign Exchange Management Act (FEMA) and Prevention of Money Laundering Act (PMLA).

In what will spell more trouble for stash fund holders figuring on this list, legal proceedings under PMLA are criminal in nature and a recent circular issued by the agency also states that any case which is booked under section 120B of the Indian Penal Code (criminal conspiracy) could become the 'predicate offence' for the central probe agency to slap money laundering charges.

The tax department, it is understood, has slapped this section of the IPC in many of these cases.

Sources said the agency was at an advanced stage of examining a few cases and subsequently issuing FEMA notices to those against whom the I-T department has filed court cases, even as it is forced to go slow as obtaining the 140 other cases from various courts will take time.

While undisclosed income of over Rs 3,000 crore has been brought to tax on account of deposits made in unreported foreign bank accounts in this case till now, penalties under FEMA laws for doing hawala-like trade and money laundering is going to pinch the accused further monetarily and select cases could also entail a jail term under PMLA given their gravity on a case-to-case basis.

There are a total of 628 names of Indians appearing in the HSBC list, where 200 were either non-residents or non-traceable, leaving 428 cases of residents which were found actionable.

The net amount of peak balance for these 428 cases was about Rs 4,500 crore, a government data had said.

The Swiss government on its part had said these names are from "stolen data" and this stand had been an impediment for Indian investigators in getting additional details on these accounts as the alpine nation's legal systems do not allow international cooperation on data sourced by stealing or theft.

The I-T department has subsequently launched over 140 prosecutions so far for wilful attempt to evade taxes and failure to furnish accounts and documents among other tax evasion charges.