With the Prime Minister seeking the first status report on the probe into The Panama Papers within 15 days, units of the Income Tax (Investigation) across the country have dispatched detailed questionnaires to all Indian clients of Panamanian law firm Mossack Fonseca who were named by The Indian Express as part of an ongoing investigation.
Officials said that the communications have already been dispatched to around 50 people in different cities and that these are in two parts. The first is a clarification on whether they are the persons named in The Indian Express report and whether they gave comments attributed to them on the offshore entities listed against their names. The clients have been given three days to respond.
The second communication is a more detailed questionnaire which has sought replies on the following: permissions sought by the client before incorporating the offshore entity; the manner in which money was routed for opening it; details of shareholders/directors/beneficial owners of the offshore entity; details of transactions and deposits in it; details of assets maintained by it; the extent of deposits made in the entity under the Liberalised Remittance Scheme (LRS) and so on.
Sources said that depending on the number of offshore entities incorporated by the addressee and the complexity of the investments involved, people have been given up to 20 days to respond to the questionnaire.
It is learnt that prior to the dispatch of the questionnaires, the IT (Investigation) units had already made an assessment from existing databases of the categories of people covered in The Panama Papers. This was done almost immediately after Finance Minister Arun Jaitley made the announcement on April 4 that a multi-agency panel was being constituted to exclusively probe The Panama Papers leak and the Indians named in it.
Officials in the Ministry of Finance said they have found that several people were correctly quoted as saying that they had only made deposits under the LRS scheme and also declared the existence of the offshore entities to the tax authorities. However, there are also cases of “partial disclosure” wherein some offshore entities have been declared with tax authorities and others omitted from a mention in Income Tax returns (ITRs) .
There is another category of people, including some prominent Delhi and Mumbai-based Mossack Fonseca clients named in The Indian Express, who had made no disclosure about the offshore firms and they may be the first to receive notices from the IT department. As yet, officials said they are yet to find Mossack Fonseca clients who had declared incorporation of entities in tax havens during last year’s “compliance” scheme.