Panama Papers: Over Rs 8,000 cr black money brought under tax ambit

New Delhi: A whopping Rs 8,186 crore, illegally kept in offshore banks by Indians, has been brought under the tax ambit despite constraints like non-sharing of information by Swiss authorities, the Centre told the Supreme Court Monday.

The Department of Economic Affairs of the Finance Ministry, in an affidavit, said "an undisclosed income of Rs 8,186 crore (including protective assessment of Rs 1,485 crore) has been brought to tax, on account of deposits made in unreported foreign bank accounts."

The Centre sought dismissal of a PIL seeking court- monitored probe against Indians whose names have figured in the Panama papers for allegedly holding bank accounts in foreign nations on the ground that it has already set up a Multi-Agency Group (MAG), comprising officials of CBDT, RBI, Financial Intelligence Unit and ED, to ensure "speedy and coordinated" investigation.

The affidavit, filed by Manu J Vettickan, Deputy Director in the Ministry, said about Rs 1,282 crore has been levied as tax in 159 cases pertaining to concealment of tax due to the government.

"So far 164 prosecution complaints have been filed in 75 cases. The apex court-appointed SIT on blackmoney has been kept updated on the progress in these investigations," it said, adding that the apex court-appointed SIT on blackmoney is being kept updated on the progress made in these probes.

Dealing with the issue of progress made so far in the probe into the Panama papers, the Centre said, "till date, five reports have been submitted by the MAG to the government. The SIT on blackmoney is being regularly updated on such issues."

The Centre lamented that despite best efforts, the Swiss competent authority has not shared any information with India on various grounds including Treaty limitations and their domestic legal barriers.

"The deponent (Centre) submits that the alternative method of assisting the tax payer to obtain the information and documents was pursued with the said bank which has led to obtaining of the requisite information/documents in a considerable number of cases...

"Tax demand of Rs 5,377 crore has been raised which includes demands of protective assessments," the affidavit said.

Referring to the FEMA provisions on opening of foreign currency account (FCA) by Indians in offshore, the affidavit said no Indian "shall open or hold or maintain the FCA provided that FCA held or maintained before the commencement of these (FEMA) regulations by a person resident in India with special or general permission of the RBI, shall be deemed to be held or maintained under these regulations".

It, however, said the RBI may permit an Indian to open or hold or maintain a FCA if an application is made in this regard.

The Centre opposed the contention raised in the PIL that the re-appointment of U K Sinha as SEBI chief was illegal and hence be quashed.

"With regard to appointment of U K Sinha as SEBI Chairman, it may be noted that in terms of SEBI rules..., the Chairman and every whole-time member of SEBI shall be appointed by the central government on the recommendation of the search committee," it said, adding that the appointment was made in accordance with law and has been held valid by the apex court also.