Black money SIT to keep tabs on Pandora probe, I-T dept told to ensure prompt action

The Special Investigation Team (SIT) on black money is likely to keep close tabs on the probe into those figuring in the Pandora Papers with India's apex direct tax body having sent a directive to its officials to promptly initiate investigation against names on the list, said people with knowledge of the matter. Tax authorities may invoke the harsh foreign black money law if required.

The tax department has also been asked to send an update on action taken every month to the SIT. Officials have been also asked to approach all foreign jurisdictions expeditiously for information on the accounts of those featured in the Pandora Papers, income tax department sources said.

Earlier this month, the International Consortium of International Journalists (ICIJ) released data that claimed to expose the offshore financial dealings of wealthy and prominent people from more than 200 countries and territories. These, the Pandora Papers, are based on leaked records of 14 offshore service providers that provide professional services to wealthy individuals and corporations.

The government had set up a multi-agency group, headed by the chairman of the Central Board of Direct Taxes (CBDT), to monitor investigations into the revelations earlier this month.

The SIT on black money, set up by the Narendra Modi government on the day it assumed charge after winning the general election in 2014, is also likely to be kept in the loop on this multi-agency effort, another official said.

"The process of investigation has begun... Standard operating procedures are already in place," said one of the tax officials. "The first step is verification of the information available from all sources."

The tax department has already sought information on the people and entities named in the list that became public earlier this month.

Summons would be issued subsequently, seeking explanations about the money trail and financial structures, and statements will be recorded, the official said.

Some of the names on the list are non-residents and inquiries will be conducted as appropriate into their status. In some cases, letters have been written to the foreign jurisdictions where the entities involved in transactions are located.

Depending on the replies, the department could also ask third parties for verification of information.

If the explanation is not found satisfactory, action will be initiated under the black money act, the official said.