In less than a month after publication of the Paradise Papers (November 5, 2017), investigation units of the Income Tax Department have begun issuing summons and questionnaires to persons named in the global media offshore leak.
Top officials of the Central Board of Direct Taxes (CBDT) told The Indian Express that summons have been issued under Section 131 of the Income Tax Act which ensures the appearance of persons called to give evidence.
Officials said the first set of summons with specific questions for each were sent in end-November.
The Paradise Papers are a cache of 13.4 million documents published 18 months after Panama Papers. Both sets of data were obtained by German newspaper Suddeutsche Zeitung and were investigated by the International Consortium of Investigative Journalists (ICIJ) working in partnership with 96 news organisations, including The Indian Express.
The Paradise Papers is the fourth collaborative investigation into offshore and banking assets done by The Indian Express with the ICIJ.
In this case, India ranks 19th in terms of number of names appearing in the data in which 180 countries are represented. There are 714 Indians named in the data according to figures released by the ICIJ.
Just like in the case of Panama Papers, the Government immediately announced the setting up of a Multi Agency Group (MAG) to exclusively probe the Paradise Papers. The MAG has membership from the Reserve Bank of India, the Financial Intelligence Unit, besides the CBDT and the Enforcement Directorate and has already held its first round of meetings. At the first meeting, instructions were issued for a list of first batch of Indians named to be prepared who could be issued summons and called for submitting evidence.
CBDT officials said, as a result, the first batch of Section 131 summons have been issued to 23 “groups” named in the Paradise Papers who also figure in the structured data made public by the ICIJ last month.
Officials explained that in each “group” there could be several Indians who were named as Directors/Beneficial Owners of a single off-shore entity. An early scrutiny of tax returns and business background has already been done for these 23 “groups” with those named expected to submit documentation and tax declarations, if any, for the off-shore entities they set up.
Subsequently, if a case is made out of suspected tax avoidance, the CBDT will approach the foreign jurisdictions for details of assets and money held by these off-shore entities.
Shortly, officials said, another batch of summons will be sent in connection with the Paradise Papers.