Cases pertaining to ‘Pandora Papers’ to be investigated by India’s Income tax department

Government takes note of the data trove in the ‘Pandora Papers’ leak. Govt issues directions that investigation in cases of Pandora Paper leaks as appearing in the media under the name ‘PANDORA PAPERS’ will be monitored through the Multi Agency Group headed by Chairman, CBDT.

In a Press release by Ministry of Finance it was mentioned as under:

On 3rd October, 2021, the International Consortium of International Journalists (ICIJ) has come out with what is claimed to be a 2.94 terabyte data trove that exposes the offshore secrets of wealthy elites from more than 200 countries and territories. The investigation is based on a leak of confidential records of 14 offshore service providers that give professional services to wealthy individuals and corporations seeking to incorporate shell companies, trusts, foundations and other entities in low or no-tax jurisdictions.

The Government has taken note of these developments. The relevant investigative agencies would undertake investigation in these cases and appropriate action would be taken in such cases as per law. With a view to ensure effective investigation in these cases, the Government will also proactively engage with foreign jurisdictions for obtaining information in respect of relevant taxpayers/entities. The Government of India is also part of an Inter-Governmental Group that ensures collaboration and experience sharing to effectively address tax risks associated with such leaks.

It may be noted that following earlier similar such leaks in the form of ICIJ, HSBC, Panama Papers and Paradise Papers, the Government has already enacted the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 with an aim to curb black money, or undisclosed foreign assets and income by imposing suitable tax and penalty on such income. Undisclosed credits of Rs. 20,352 crore approximately (status as on 15.09.2021) have been detected in the investigations carried out in the Panama and Paradise Papers.

Names of only a few Indians (legal entities as well as individuals) have appeared so far in the media. Even the ICIJ website (www.icij.org) has not yet released the names and other particulars of all the entities. The website of ICIJ suggests that information will be released in phases and structured data connected to the Pandora Papers investigation will be released only in the days to come on its Offshore Leaks Database.

Further, the Government has directed today that, investigations in cases of Pandora Papers leaks appearing in the media under the name ‘PANDORA PAPERS’ will be monitored through the Multi Agency Group, headed by the Chairman, CBDT, having representatives from CBDT, ED, RBI & FIU.

Let’s understand a brief about Pandora Papers:

The Pandora Papers investigation lays bare the global entanglement of political power and secretive offshore finance.

Based upon the most expansive leak of tax haven files in history, the investigation reveals the secret deals and hidden assets of more than 330 politicians and high-level public officials in more than 90 countries and territories, including 35 country leaders. Ambassadors, mayors and ministers, presidential advisers, generals and a central bank governor appear in the files.

(Source: ICIJ)

The Pandora Papers are 11.9 million leaked documents with 2.9 terabytes of data that the International Consortium of Investigative Journalists published beginning on 3 October 2021. The leak exposed the secret offshore accounts of 35 world leaders, including current and former presidents, prime ministers, and heads of state as well as more than 100 billionaires, celebrities, and business leaders. The news organizations of the ICIJ described the document leak as their most expansive exposé of financial secrecy yet, containing documents, images, emails and spreadsheets from 14 financial service companies, in nations including Panama, Switzerland and the United Arab Emirates, surpassing their previous release of the Panama Papers in 2016, which had 11.5 million confidential documents. At the time of the release of the papers, the ICIJ said it is not identifying its source for the documents.

In a layman’s language it can be considered as details of people who have parked their funds in tax heaven countries to save taxes.

Disclaimer: The views presented in the above article are personal views of our team (based on information available on public domain) and has no legal binding. For any legal opinion consult a tax professional.

 

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