Probe ordered into ‘Paradise Papers’


The government reconstituted a Multi-Agency Group led by the Central Board of Direct Taxes (CBDT) chairman on Monday to investigate cases relating to the ‘Paradise Papers’ data disclosure.

The Paradise Papers include about seven million loan agreements, financial statements, emails, trust deeds and other paperwork over nearly 50 years from Appleby, a prominent offshore law firm with offices in Bermuda and also from Asiacity, a Singapore-based family-owned trust company.

The International Consortium of Investigative Journalists (ICIJ), and its Indian partner The Indian Express, late on Sunday night released data on offshore entities involving people and companies from 180 countries.

India ranks 19th in terms of the number of names that feature in the papers.

The disclosure comes 18 months after a similar ‘Panama Papers’ disclosure, which named several prominent Indian politicians, actors, and businessmen as having offshore undisclosed bank accounts.

A few names so far

While 714 Indians are said to be part of the list, the government noted that the names of “only a few Indians [legal entities as well as individuals] have appeared so far” in the public domain.

“Even the ICIJ website (www.icij.org) has not yet released the names and other particulars of all the entities,” the Finance Ministry said.

Information in phases

“The website of ICIJ suggests that information will be released in phases and structured data connected to the Paradise Papers investigation will be released only in the coming weeks on its Offshore Leaks Database.”

“The Investigation units of the Income Tax Department (ITD) have been alerted to take note of revelations for immediate appropriate action,” the Ministry said in a statement.

“It has been reported that many cases of offshore entities are already under investigation on fast track. As soon as further information surfaces, swift action as per law will follow.”

“Further, the Government has directed that investigations in cases of Paradise Papers will be monitored through a reconstituted Multi Agency Group (MAG), headed by the Chairman, CBDT, having representatives from CBDT, Enforcement Directorate, Reserve Bank of India and the Financial Intelligence Unit,” the statement said.

Panama investigations

The MAG was previously constituted in 2016 following the Panama Papers disclosure. “Like in the Panama leaks case, a lot of people have said that it is legitimate to hold such offshore accounts,” NC Hegde, a partner at Deloitte India and an expert in international taxation, said. “So, any wrongdoing will have to be determined only once it is known what is in those accounts, if there is income that has not been disclosed. Just holding an account is not illegal.”

“The Panama Papers contained brief particulars of about 426 persons, prima facie, Indians or persons of Indian origin,” the CBDT said in a separate statement on Monday. “The Income Tax department conducted enquiries in all 426 cases, inter alia, through making 395 references to 28 foreign jurisdictions. Based on analysis of the information obtained and investigation conducted, the outcome so far indicates 147 actionable cases and 279 non-actionable cases (non-residents/no irregularities etc).”

Out of the 147 actionable cases, the CBDT said investigations have led to the detection of undisclosed funds worth about ₹792 crore, so far. Searches have been conducted in 35 cases and surveys in 11 cases. In other cases, the persons have been confronted with the evidences. In five cases, criminal prosecution complaints have been filed.

In seven cases, notices were sent under Section 10 of the Black Money (Undisclosed Foreign Income & Assets) and Imposition of Tax Act, 2015, the CBDT said, adding that further investigation was under way.

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