Panama Papers: Wait until cases are filed, says Jaitley

02 May 2016


The government has issued notices to all those named in the Panama Papers but tax laws do not allow the proceedings to be made public till cases are filed in courts, finance minister Arun Jaitley told the Lok Sabha on Friday.

The minister explained that under section 138 of the Income Tax Act the proceedings of a case cannot be made public till a case is filed in a court.

Meanwhile, responding to another supplementary, minister of state for finance Jayant Sinha said the government is looking into papers received from HSBC and Panama and the various laws, including the one on black money stashed away in foreign banks, are being invoked.

Following the leak of the Panama Papers, the income tax department has sent a detailed questionnaire to about 50 individuals and entities figuring in the list of those allegedly holding offshore assets in tax havens, as per earlier reports.

The IT department has sought to know if the person is indeed the same as named in the list made public recently and enquires about the vitals of their transactions made with the law firm Mossack Fonseca. It includes the year of incorporation, their source of income, details of business transactions done and whether they declared these investments and transactions to the income tax department and other regulatory bodies like RBI any time till now.

There are about 500 Indians named in the list, which includes prominent businessmen, film celebrities and those belonging to lucrative professions. The government has created a Multi-Agency Group (MAG), which include officials of the IT department (CBDT), its foreign tax wing, the RBI, Financial Intelligence Unit and the Enforcement Directorate.

The Panama Papers leaks contain an unprecedented amount of information, including more than 11 million documents covering 2,10,000 companies in 21 offshore jurisdictions. Each transaction spans different jurisdictions and may involve multiple entities and individuals.

Sinha said the Special Investigation Team (SIT) had made a series of recommendations on black money and that the government has benefitted greatly by the suggestions of the SIT.

Besides, the government has come across instances of transferring money out of the country illegally. Some of such cases detected indicate use of the medium of trade for such transfers, which include overvaluation in imports, undervaluation in exports, remitting foreign exchange on the strength of forged import documents, payments/remittances for non-genuine purchases of goods/services/technical know-how, etc.

In all these cases, the government has taken necessary measures for expeditious investigation, including through enhanced international cooperation, it was pointed out.

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