Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 7th October, 2021

PRESS RELEASE

Income Tax Department conducts searches on certain businessmen / middlemen in Maharashtra

The Income Tax Department carried out a search operation that commenced on 23.09.2021 on a big syndicate involving certain businessmen/middlemen of Maharashtra and some persons holding public offices. The intelligence was developed over 6 months. In all, 25 residential and 15 office premises were covered under the search, while 4 offices were covered under survey. Some suites in Oberoi Hotel in Mumbai, permanently rented by two of the middlemen and used for meeting their clients, were also subjected to search. The syndicate, consisting of businessmen/middlemen/associates and persons holding public offices, used various code names in their records and in one case had back-dated records by 10 years. The total transactions detected during this search are to the tune of Rs. 1050 crore.

These middle men provided end-to-end services to corporates and entrepreneurs from land allotment to obtaining all governmental clearances. Despite using encrypted modes of communication and sanitising devices, the Income Tax teams were able to recover critical digital evidence and also located a secret hideout from where various incriminating evidences were recovered. The liaisoners also used 'angadiyas' for transfer of cash and Rs.150 lakh was seized from one of the angadiyas during the search.

The documents recovered include a summary of overall cash generated and disbursed giving the particulars of the amounts received and receivable, each being more than Rs. 200 crore. Key areas of generation of this money have been found to be cash paid by bureaucrats for getting key postings under a certain Ministry, cash paid by the contractors for getting payments released etc. Major amount of cash collected had been distributed to various persons, including someone who is mentioned under a code name.

Furthermore, one of the businessmen/middlemen had also amassed huge unaccounted income by purchasing lands from farmers and transferring the same to Government undertakings/big corporates. Many senior bureaucrats/their relatives and other prominent people have been found to have invested in these schemes.

During the search, evidence unearthed at the office premises includes date-wise transactions for a certain period of cash deposits of around Rs. 27 crore and cash payments of around Rs. 40 crore. Further, evidences have been found of cash payments to the tune of Rs. 23 crore made to various persons, whose names are prefixed with various code words. The said middle man receives payments from various businessmen and industrialists for getting lands under the schemes of Government undertakings, extension of tenders/mining contracts, etc. Further, in a WhatsApp chat, particulars of cash transactions have been found showing receipts of cash of around Rs. 16 crore and outflow of around Rs. 12 crore. 

Some of the persons searched have their own real estate and construction businesses, in respect of which evidences of cash receipts/payments have also been found.

Voluminous digital data has been recovered and seized from mobile phones, pen-drives, hard drives, iCloud, e-mails etc. which is being examined and analyzed.

So far, cash of more than Rs. 4.6 crore and jewellery valued at Rs. 3.42 crore have been seized. 4 lockers found during the search operation have been put under restraint orders.

Further investigations are in progress.

(Surabhi Ahluwalia)

Commissioner of Income Tax

 (Media & Technical Policy)

Official Spokesperson, CBDT

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 4th October, 2021

PRESS RELEASE

Seychelles’ Tax Inspectors Without Borders (TIWB) programme launched in partnership with India

Tax Inspectors Without Borders (TIWB), a joint initiative of the United Nations Development Programme (UNDP) and the Organisation for Economic Cooperation and Development (OECD), launched its programme in Seychelles on 4th October, 2021. India was chosen as the Partner Administration and has provided Tax Expert for this programme.

This programme is expected to be of 12 months duration during which India, in collaboration with the TIWB Secretariat and support of the UNDP Country Office in Mauritius and Seychelles, aims to aid Seychelles in strengthening its tax administration by transferring technical know-how and skills to its tax auditors through sharing of best audit practices. The focus of the programme will be on Transfer Pricing cases of tourism and financial services sectors.

Shri J.B. Mohapatra, Chairman of the Central Board of Direct Taxes (CBDT) attended the launch through videoconferencing along with Mr. Patrick Payet, Secretary of State, Ministry of Finance, Economic Planning & Trade of the Government of Seychelles; Mrs. Veronique Herminie, Commissioner General of Seychelles Revenue Commission; Mr. Ben Dickinson, Head of Global Relations and Development Division of the Centre for Tax Policy and Administration at the OECD; Ms. RusudanKemularia, Head of the TIWB Secretariat; and other senior officers of Seychelles, UNDP, OECD, TIWB Secretariat and Foreign Tax & Tax Research Division of CBDT.

This programme is the sixth TIWB programme which India has supported by providing Tax Expert.

(SurabhiAhluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 4th October, 2021

PRESS RELEASE

Cases pertaining to ‘Pandora Papers’ to be investigated

On 3rd October, 2021, the International Consortium of International Journalists (ICIJ) has come out with what is claimed to be a 2.94 terabyte data trove that exposes the offshore secrets of wealthy elites from more than 200 countries and territories. The investigation is based on a leak of confidential records of 14 offshore service providers that give professional services to wealthy individuals and corporations seeking to incorporate shell companies, trusts, foundations and other entities in low or no-tax jurisdictions.

The Government has taken note of these developments. The relevant investigative agencies would undertake investigation in these cases and appropriate action would be taken in such cases as per law. With a view to ensure effective investigation in these cases, the Government will also proactively engage with foreign jurisdictions for obtaining information in respect of relevant taxpayers/entities. The Government of India is also part of an Inter-Governmental Group that ensures collaboration and experience sharing to effectively address tax risks associated with such leaks.

It may be noted that following earlier similar such leaks in the form of ICIJ, HSBC, Panama Papers and Paradise Papers, the Government has already enacted the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 with an aim to curb black money, or undisclosed foreign assets and income by imposing suitable tax and penalty on such income. Undisclosed credits of Rs. 20,352 crore approximately (status as on 15.09.2021) have been detected in the investigations carried out in the Panama and Paradise Papers.

Names of only a few Indians (legal entities as well as individuals) have appeared so far in the media. Even the ICIJ website (www.icij.org) has not yet released the names and other particulars of all the entities. The website of ICIJ suggests that information will be released in phases and structured data connected to the Pandora Papers investigation will be released only in the days to come on its Offshore Leaks Database.

Further, the Government has directed today that, investigations in cases of Pandora Papers leaks appearing in the media under the name ‘PANDORA PAPERS’ will be monitored through the Multi Agency Group, headed by the Chairman, CBDT, having representatives from CBDT, ED, RBI & FIU.

(Surabhi Ahluwalia)

Commissioner of Income Tax (Media & Technical Policy)

Official Spokesperson, CBDT

 

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 4th October, 2021

PRESS RELEASE

Income Tax Department conducts searches in Maharashtra, Karnataka & Uttar Pradesh

The Income Tax Department carried outa search and seizure operation on 30.09.2021 on 37 premises spread across multiple cities including Mumbai, Pune, Noida& Bangalore. These groups/individuals were in varied businesses such as cable manufacturing, real estate, textile, printing machineries, hotels, logistics etc.

During the course of the search operation, several incriminating documents, loose sheets, diaries, emails and other digital evidences etc. have been unearthed which indicates ownership of a large number of foreign bank accounts and immovable properties, unreported to the Department. These groups/individuals utilized the services of a Dubai based financial service provider to create a dubious and complex web of foreign companies and trusts based in tax havens such as Mauritius, UAE, BVI, Gibraltar etc. to hold their unaccounted assets.

The credits in the bank accounts of these groups and individuals maintained by the Dubai based financial service provider exceed 100 Million US Dollars  ( about Rs. 750 crore) accumulated over a decade and were found to be parked in bank accounts  in Switzerland, UAE, Malaysia and several other countries. Evidences gathered during the search operation reveal that the undisclosed funds parked abroad have been used by these groups for acquiring immovable properties in several countries such as UK, Portugal, UAE etc in the name of defunct companies incorporated abroad, with funds layered through foreign bank accounts, for meeting the personal expenses of the promoters and their family members abroad and routing back funds in their Indian entities.

During the course of the search, evidence related to bogus payments to suppliers for generating cash, unaccounted cash expenditure, hawala transactions, over-invoicing have also been gathered. Unaccounted cash and jewellery to the tune of over Rs. 2 crore has been seized from the residential and business premises respectively. More than 50 bank lockers have been kept under restraint.

Further investigations are in progress.

(Surabhi Ahluwalia)

Commissioner of Income Tax (Media & Technical Policy)

Official Spokesperson, CBDT

 

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 2nd October, 2021

PRESS RELEASE

CBDT notifies Rules for implementing the amendments made by the Taxation Laws(Amendment) Act, 2021

The Taxation Laws (Amendment) Act, 2021 (2021 Act), inter-alia, amended the Income-tax Act, 1961 (Income-tax Act) so as to provide that no tax demand shall be raised in future on the basis of the amendment to section 9 of the Income-tax Act made vide Finance Act, 2012 for any offshore indirect transfer of Indian assets if the transaction was undertaken before 28th May, 2012 (i.e., the date on which the Finance Bill, 2012 received the assent of the President).

The 2021 Act also provides that the demand raised for offshore indirect transfer of Indian assets made before 28th May, 2012 (including the validation of demand provided under Section 119 of the Finance Act 2012) shall be nullified on fulfillment of specified conditions such as withdrawal or furnishing of undertaking for withdrawal of pending litigation and furnishing of an undertaking to the effect that no claim for cost, damages, interest, etc. shall be filed and such other conditions are fulfilled as may be prescribed.  The amount paid/collected in these cases shall be refunded, without any interest, on fulfillment of the said conditions.

The draft rules, to amend the Income-tax Rules, 1962, prescribing the specified conditions as referred above and providing the form and manner for furnishing of undertaking for withdrawal of pending litigation, claiming no cost, damages, interest, etc. were circulated in public domain on 28^th August, 2021, inviting suggestions/comments from all stakeholders by the 4^th of September, 2021.

After examining the stakeholder comments and incorporating several suggestions contained therein, the rules for implementing the 2021 Act have been published in the Official Gazette vide Notification No. GSR 713(E) dated 1^st October, 2021 wherein the following rules have been inserted to the Income-tax Rules, 1962:

Rule 11UE which provides for the specified conditions in order to be eligible to claim relief under 2021 Act; and

Rule 11UF which provides the form and manner of furnishing the undertaking for withdrawal of pending litigation, claiming no cost, damages, etc.

The notification containing the above rules can be accessed at www.incometaxindia.gov.in.

(Surabhi Ahluwalia)

Commissioner of Income Tax (Media & Technical Policy)

Official Spokesperson, CBDT