Govt Refutes Raid Raj Allegations

According to data furnished by finance minister P Chidambaram in Parliament on Friday, the number of raids conducted by the income-tax department has declined. However, the value of seizures per raid has increased.

The average seizure per warrant issued was Rs 7.88 lakh in 1993-94, Rs 7.89 lakh in 1994-95, Rs 9.93 lakh in 1995-96 and Rs 9.95 lakh till October in the current financial year. The number of warrants issued in the same period were 5,026, 4,030, 4,612 and 1,788 respectively.

The governments defence of enforcement agencies has come at a time when several industry representatives and some associations have alleged that these agencies, including the income-tax department, have unleashed a raid-raj.

 

The matter also came up for discussion within the finance ministry and the representatives of various enforcement agencies put up a strong defence of their activities. They said a conscious effort was being made to ensure that individuals were not harassed during raids.

The finance minister himself put up a strong defence in the Lok Sabha and recommended tighter search and seizures procedures to ensure there is no premium on tax evasion.

Accordingly, the finance ministry will pilot amendments to Chapter 14-B of the Income Tax Act in the current session of Parliament.

Through the amendments, an obligation will be placed on the person from whom the money was seized to file a return, and penalties will be imposed. This will be apart from the tax and interest due to the government on unaccounted income, Chidamba-ram said.

He also indicated that the government will introduce a bill on money laundering that takes into account the growing complexity of such crimes in the budget session next year.

The agencies involved in the exercise are the Directorate of Revenue Intelligence (DRI), Directorate of Investigation (Income Tax), Central Bureau of Investigation (CBI) and the Enforcement Directorate, apart from the intelligence agencies.

Sources in the revenue department said the new piece of legislation will provide that in the event of money laundering being detected, the case property will be confiscated and not released till the case has been disposed of.

Any appeal for release of case property, under the proposed act, will be entertained only by the high court and not the trial or sessions court.

At present, India does not have a separate act against money laundering though there are provisions for prosecution under the Narcotic Drugs & Psychotropic Substances Act, Gambling Act and other pieces of legislation.