Centre sets up panel to probe black money

Bowing to relentless pressure from the Supreme Court for months, the central government today announced it had set up a multi-disciplinary committee with top officers to probe the issue of black money parked in foreign tax havens.

The government told a bench consisting of Justice B Sudarshan Reddy and Justice S S Nijjar the panel would be headed by the revenue secretary.

The other members will be a deputy governor of the Reserve Bank of India, director of Intelligence Bureau, director of the Central Bureau of Investigation, director of the Directorate of Enforcement, chairman of the Central Board of Direct Taxes and director general of the Narcotics Control Bureau. Moreover, secretaries of home and defence ministries and the foreign secretary would be consulted on important issues.

The court was suggesting the establishment of a special investigation team (SIT) to inquire into the generation of black money and the government was so far reluctant to do so.

Solicitor General Gopal Subramanium told the court today the government had set up a panel in line with the court suggestions.

He further assured the court the panel would go beyond the cases of Hasan Ali Khan, a Pune stud farm owner now in jail, and LTG bank, to trail money laundering.

The court was dealing with a petition moved by senior lawyer Ram Jethmalani two years ago. He had asked the court to direct the government to unearth black money kept in foreign banks.

According to Jethmalani, this is just not black money generated by tax avoidance but huge amounts of profits from illegal arms trade, smuggling narcotics and other criminal activities threatening national security.

The court was unremitting in its demand to pursue the dirty money and disclose the names of those who stashed the money abroad. Though the government has handed over a list of 26 persons, only one name, that of Khan, has been disclosed. The court has been asking the government what was the difficulty in publishing the remaining names.

The government’s argument was that it was barred from doing so because of the secrecy clause in the double taxation treaties with some European countries.

Jethmalani contended this was not simple tax evasion covered by the treaties, but fruits of international criminal activities. He said the government was reluctant to disclose the names of the persons with money tunnelled outside the country because they belong to rulers of the country.