Black money case: Modi govt too refuses to disclose names of account holders
17 October 2014
In a repeat of the UPA government's averment in the Supreme Court, the new NDA government led by Narendra Modi at the centre also today told the apex court that information on black money given by foreign countries with which India has double taxation avoidance agreement cannot be made public.
The central government today filed an application in the Supreme Court saying it cannot disclose details of foreign accounts held by Indians in countries which are governed by bilateral double taxation avoidance treaties.
While corruption and ''black money'' has been at the top of the agenda of widespread public protests over the last couple of years, the Modi government that came to power on the promise of a corruption-free administration also now wants to shield the corrupt.
Senior advocate Ram Jethmalani called it an attempt by the government to shield those who have stashed black money abroad.
The centre's application will come up for hearing on 28 October.
The income tax department has given to the Enforcement Directorate (ED), towards the close of 2013, a list containing names of 17 individuals who had held accounts in Liechtenstein's LGT Bank.
''The ED has sought more information, but the tax department has said that there were specific clauses in the tax treaties with these countries that prevent sharing of information,'' said ED sources.
Also, according to reports, the income tax department had collected 7,704 ''items of information containing details of payments received by Indian citizens in various countries, besides information from LGT Bank accounts,'' over the last two years.
The Supreme Court had directed the government to constitute a high-powered Special Investigation Team (SIT) to investigate individuals whose names were disclosed by Germany for having accounts in LGT Bank in Liechtenstein - a European principality known for its banking secrecy laws.
The SC had set a deadline for the previous UPA government towards its final days for setting up the SIT and the first thing that Prime Minister Narendra Modi's cabinet did on the first day of the new government in office in May was setting up the SIT.
The government has also given the SIT, headed by retired Supreme Court judge MB Shah, a sweeping mandate to crack down on the country's thriving parallel economy. But no progress has been reported in the functioning of the SIT, nor has any report been submitted so far.
The Global Financial Integrity (GFI), a Washington-based think-tank, has estimated that Indians had stashed away $462 billion (about Rs2,80,000 crore) in overseas tax havens between 1948-2008.
The government is expected to reveal a new estimate of India's unaccounted ''black money'', most of it stashed abroad, and follow it up with a plan to hold it to account.
It has commissioned the National Council for Applied Economic Research (NCAER), the National Institute of Public Finance and Policy (NIPFP), and the National Institute of Financial Management (NIFM) to bring out an estimate of India's black economy.
''Given the complexities inherent in quantification of unaccounted income and wealth both inside and outside the country, it will take some more time for the finalisation of these reports,'' another official said.
The Bharatiya Janata Party (BJP), in a 2011 report, had estimated India's black economy to be worth around $500 billion and $1.4 trillion (between Rs30,00,000 crore and Rs84,00,000 crore).
Between 2009-10 and 2012-13, the income tax department detected undisclosed income of more than Rs65,000 crore through specific ''search and seizure'' operations and ''surveys''.
Meanwhile, a high-level delegation of tax and revenue officials is set to soon travel to Switzerland in order to pursue cases of black money and secret accounts held by Indians in banks in the Alpine nation.
The official visit, sources said, was set up in quick time after the Supreme Court-appointed Special Investigation Team (SIT) was taken into confidence by investigative agencies that a one-on-one visit between the officials of the two countries was necessary to take the probe in these cases forward.
Officials said that the decision to send the team has also been cleared by Finance Minister Arun Jaitley and the officials would be armed with legal documents, dossiers and the charter of the SIT.
The upcoming meeting will be the first high-level one between the officials of the two countries after the Narendra Modi government came to power at the centre.