I-T gets wary about secret bank accnt names; asks for oath

In order to guard against possible leakage of names figuring in the secret bank accounts lists it has received from foreign shores, the CBDT has ordered the I-T department to obtain a signed undertaking from any government entity or department who demands the data for their own probe.

The Central Board of Direct Taxes (CBDT) fears that if these names are leaked and they are publicised, global financial bodies like OECD and other tax exchange treaty countries will either stop or grow reluctant to share such data with India as this will scare away foreign investors in their respective economies.

The CBDT, which at present in is possession of names in secret bank accounts like that of Liechtenstein's LGT Bank provided reportedly by the German government and over 9,900 pieces of information from several countries regarding illegal funds stashed abroad by Indian citizens, has instructed the Income Tax department to obtain a signed statement from those wanting it by stating that the data would only be used for "tax purposes" and "tax evasion investigation" and that its secrecy would be the responsibility of the official who takes it under his name.

While the 'Top Secret' names have been circulated to a number of I-T investigation units in Delhi, Mumbai, Kochi and Ahmedabad among others, officials from the newly created Directorate of Criminal Investigation (I-T), tax assessment ranges and International Taxation units require the information for taking legal action as per their mandate.

"Any official from the I-T department who needs the names and associated data about these foreign accounts has been asked to undertake an oath by signing an undertaking that it will only be used for tax purposes. The officials who want to obtain names on these lists are being monitored strictly," a top IT source said.

The seriousness with which the CBDT is guarding the contents of these dossiers received from abroad can be gauged from the fact that some time back when the Enforcement Directorate (ED) wrote to the apex body of the I-T department (CBDT) to obtain the LGT names for their probe, they were politely asked to get it from a court where the I-T department has filed a prosecution case against 18 individuals figuring on the list.

Interestingly, both the IT department and the ED are probe agencies under the Finance Ministry.

Finance Minister Pranab Mukherjee has also repeatedly told various public forums and recently the Parliament that the names on these lists cannot be disclosed before the probe finishes and prosecution is launched in the courts as this would violate the provisions of the Double Taxation Avoidance Agreements (DTAAs) and tax information exchange treaties India has signed with various nations who are now helping the country by providing this data.

"If I publish it, same country will say you violated the Agreement and we will not share information in future...We will dry up our source of information," Mukherjee argued while speaking in Lok Sabha during the recently concluded Winter Session.

Rejecting the Opposition charge of "inaction" or "lagging behind" in taking action in black money cases, he said the government would prefer to go after those having illegal accounts abroad rather than publicising details as the account holders could even withdraw money.

"Should I publicise or go and seize it... How is intelligence collected? There is an element of surprise," he had said.

"What do you achieve by declaring their names?... You say declare money kept in Swiss banks as national assets. How do you get it back? Shall I send forces. You can only get these through international agreements," Mukherjee had said.

The CBDT has also deployed a team of select I-T sleuths to deal with all the matters related to this classified data.