Differences in strategy stopped I-T's 2G probe

Top officials’ disagreement had stalled 2009 plan, revived after Supreme Court lash.

The Supreme Court’s expression of displeasure with the income tax department over its slow progress in the tax evasion cases linked to allocation of 2G telecom spectrum has drawn attention to a two-year delay in proceeding with an agreed plan in this regard.

Government officials told Business Standard the department had dragged its feet in implementing ‘Operation Atlanta’, a plan devised around mid-2009 to act on information pertaining to the issue. Differences on tactical issues among top officials of the department handling the case had delayed the planned action.

Operation Atlanta was concretised around mid-2009 on the basis of information gathered from telephone conversations of corporate lobbyist and chief of Vaishnavi Corporate Communications, Niira Radia, with bosses at a number of telecom companies, then telecom minister A Raja and his party colleague K Kanimozhi and others, recorded by the department in 2008 and 2009.

A senior finance ministry official told Business Standard a section of CBDT officials favoured beginning the Operation with action against Unitech rather than Radia, on the grounds that acting against the latter would alert others. However, some senior officials wanted the whole exercise to be initiated simultaneously on Unitech and Niira Radia.

“A final decision on a comprehensive action plan could not be taken due to this difference of opinion among the top brass,” said the official. Apparently, all the information for investigation on Radia was collated under the code name ‘Matahari’.

Meanwhile, the department shared the details of recorded telephone conversations with investigating agencies, including the Central Bureau of Investigation.

When asked, the director-general (investigation) at the time in thje I-T department, Milap Jain, said he didn’t remember exactly what had happened.

The finance ministry official said CBI also didn’t take speedy action on the information initially but everything changed after the leak of the contents of the recorded conversations in the media and presentation of a report by the Comptroller and Auditor-General last year.

He said the I-T department only initiated an enquiry against Unitech. Only subsequently did the department pass on critical information it had collected to CBI, including the money trail from DB Realty to Kalaignar TV.

Yesterday, a Supreme Court bench of judges G S Singhvi and A K Ganguly directed the department to file a detailed report on action taken by it during the past three years, since it got a complaint in this regard and began tapping Radia’s telephone.

“The IT department must be quicker. This is not a normal case of tax evasion. It (probe) should have been done fast. These are not ordinary cases to be handled in the ordinary way,” the bench said.

The department defended its ongoing probe, saying investigation had entered the “fifth layer” and the approach towards the case had not been tardy.

The court, however, was not satisfied and said, “We are not concerned about layers but results.” The bench allowed the department to approach the special judge trying the 2G case, to interrogate company officials in judicial custody for their alleged role in the scam.