Keeping afloat the idea of a Special Investigation Team (SIT) to watch over the probe being conducted by the government agencies into the Panama Papers, the Supreme Court Tuesday sought to examine the progress made by the Multi-Agency Group (MAG) which has submitted six reports so far. A bench led by Justice Dipak Misra decided to scrutinise the reports in order to ascertain the status of the probe in the wake of a specific prayer made in a PIL filed by advocate-petitioner M L Sharma, who has demanded a court-monitored investigation through a SIT.
“There is nothing adversarial in this matter. We will, therefore, first see the reports and then decide whether a SIT should be set up. This SIT could follow the investigation…whatever has been claimed to be investigated by the Multi-Agency Group,” said the bench, also comprising Justices M Khanwilkar and M M Shantanagoudar.
It asked Solicitor General Ranjit Kumar to provide, in a sealed-cover envelope, all six reports by the MAG, which will be examined by the bench before taking a call on whether these reports could also be shared with Delhi-based lawyer Sharma who has filed the petition in his personal capacity.
“We direct the Union of India to file all six reports in a sealed cover within four weeks,” ordered the bench, fixing the matter for hearing next on April 18.
Sharma has alleged that the MAG was deliberately going slow and that various incriminating material were being concealed from the apex court. He further submitted that nobody knew the actual status of the investigation into Indian offshore bank account holders, named in the Panama Papers, which was reported by The Indian Express last year after an eight-month investigation in collaboration with the International Consortium of Investigative Journalists.
Therefore, Sharma contended, the SIT could be set up to oversee the investigation and make appropriate reports to the court.
Kumar, representing the Central government, however opposed this plea and claimed that the investigation was on the right track. “The Multi-Agency Group has issued notices to more than 400 people and their replies are also coming,” said the SG, adding the MAG has completed its sixth report on the ongoing investigation.
Kumar said that the government was prepared to place all reports before the court which should first go through them and then decide whether the SIT was at all required. The court accepted Kumar’s submission and asked him to make sure all reports are before the bench on the next date for a scrutiny.
The MAG consists of officers from the Central Board of Direct Taxes (CBDT), Reserve Bank of India (RBI), Enforcement Directorate and Financial Intelligence Unit. MAG has also shared its reports with the apex court-appointed SIT on black money.
Through an affidavit in October last year, the Department of Economic Affairs had told the court that “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 bench was also informed that about Rs 1,282 crore has been levied 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 black money has been kept updated on the progress in these investigations,” the Central government’s affidavit had said.
Incidentally, the government had announced the setting up of the MAG the very day the Panama Papers were published worldwide, making it clear that it wanted an exclusive probe team to handle the international data leak and not the existing Special Investigating Team on black money, which was also constituted early in the tenure of the NDA. The MAG has since been meeting regularly and a copy of its summary reports are being submitted to the Prime Minister’s Office as well.
Until the end of 2016, the MAG had reported that in all, 415 Indians named in the Panama Papers were under the scanner, with several persons named as either Directors or Beneficial Owners of a single off-shore entity. Besides this, 198 references have already been sent to jurisdictions such as the British Virgin Islands, Cyprus and Luxembourg and officials have stated that this has been done for cases of Indians named in the Mossack Fonseca data against whom there is a possible case of evasion of tax as well as violation of foreign exchange regulations.
It is understood that of the 415 Indians under probe, 71 are NRIs but the MAG decided to also bring them under the ambit of the probe. All persons named were initially sent “advisories” by the Income Tax (investigation), informing them about the existence of an off-shore entity in their name, and it is understood that almost half the persons named have admitted to doing so.
Following Income Tax, the Enforcement Directorate also joined the Panama Papers probe and similar “advisories” have since been sent to 137 Indians for alleged violations under the Foreign Exchange Management Act.