Special team to probe 627 Indians with foreign bank accounts

New Delhi : The sealed envelope with the names of 627 Indians holding bank accounts overseas, against whom a probe is on to ascertain conformity with domestic tax laws, is to be passed on to a special team set up under the Supreme Court’s direction.

This directive from the apex court came after Attorney General Mukul Rohatgi submitted the envelope along with two others to a bench of Chief Justice H.L. Dattu, and Justices Ranjana Prakash Desai and Madan B. Lokur Wednesday, as sought by them a day earlier.

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The Special Investigation Team (SIT), headed by Justice M.B. Shah, with Justice Arijit Pasayat as vice chair, was called for by the Supreme Court by way of an order July 4, 2011, and officially notified by the government end-May this year.

The other two envelopes pertain to information furnished by the French government and the action taken by the Government of India thus far in trying to get back the illegal funds parked by Indians in overseas banks and estimated at between $426 billion and $1.4 trillion.

Directing further hearing on the matter Dec 3, the apex court said the special team, by that time, would submit its status report on the steps taken by it in pursuance to this list of 627 account holders.

Rohatgi told the apex court that half of these account holders were Indian residents and the other half non-resident Indians and pertained to a period up to 2006. He said action was initiated, with some of having paid the taxes and others under investigation.

The top law officer requested on behalf of the government that care be taken such that nothing impedes the Indian authorities and probe agencies in getting information from these countries and others on foreign accounts in future.

Importantly, he said, the Income Tax Act had been amended to extend the limitation period for recovering taxes from these account holders till March 31, 2015. Earlier, the limitation period was six years and would have expired in 2012.

Rohatgi once again told the apex court that the government had no intention to hold back any information or names it had in its possession on this matter and was open to inquiry by the Central Bureau of Investigation, Income Tax authorities or any other agency.

“Our only one request is: According to terms of the treaties entered by the government with other countries, there is a confidentiality clause. Nothing should be done that may impede our ability to get information from these countries and others,” he said.

The court agreed. “We have no intention of causing any embarrassment to the government. We will send all these names to the SIT and ask them to proceed in accordance with law.”

All the 627 accounts in the list are at HSBC Bank in Geneva and the details were secured from the French government. The data was actually stolen by a bank employee, as a result of which the Swiss authorities declined help in any manner, the court was told.

At the same time, HSBC Bank had said that if the Indian authorities get a no-objection certificate from the account holders, it could then share the relevant details. Some 50-60 of the account holders had given their consent.

The entire matter came up after senior counsel Ram Jethmalani and others filed a public interest suit wanting the government to be restrained from signing double tax avoidance pacts with other nations, and block information flow on ill-gotten money parked abroad.

The appointment of the special probe team was one of the outcomes.