Paradise Papers Investigation

Investigations in cases of ‘Paradise Papers’ to be monitored through reconstituted Multi Agency Group

Revelations made today in the media under the name ‘Paradise Papers’ [based upon expose done by the International Consortium of Investigative Journalists (ICIJ)] indicate that out of 180 countries represented in the data of offshore entities held by persons of different nationalities, India ranks 19^th in terms of number of names. 714 Indians reportedly appear in the tally. The Paradise Papers include nearly 7 million loan agreements, financial statements, emails, trust deeds and other paperwork over nearly 50 years from inside Appleby, a prestigious offshore law firm with offices in Bermuda and beyond. The leaked documents include files from the smaller, family-owned trust company, Asiaciti (Singapore), and from company registries in 19 secrecy jurisdictions.
            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 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. 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, headed by the Chairman, CBDT, having representatives from CBDT, ED, RBI & FIU.

Cases pertaining to ‘Panama Papers’: Investigation in full swing

Pursuant to revelations made by the International Consortium of Investigative Journalists (ICIJ), a Washington based organization in April 2016 about certain Indians having linkages with entities in offshore no tax/low tax jurisdictions, the Government constituted a Multi-Agency Group (MAG) on 4th April 2016, inter alia, to facilitate co-ordinated and speedy investigation. The MAG consisted of officers of Central Board of Direct Taxes (CBDT), Enforcement Directorate (ED), Financial Intelligence Unit (FIU) and Reserve Bank of India.  So far, the MAG has submitted 7 reports to the Government.
The Panama Papers contained brief particulars of about 426 persons, prima facie, Indians or persons of Indian origin. 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:

• Investigations have led to the detection of undisclosed credits of about Rs. 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 during enquiries;
• In 5 cases criminal prosecution complaints have been filed;
• In 7 cases notices under section 10 of the Black Money (Undisclosed Foreign Income & Assets) and Imposition of Tax Act, 2015 have been issued;
• Further investigation in all the above cases is in progress.