The Centre has told Parliament it has no data on offshore shell companies owned by Indians, the admission coming just four days before Rahul Gandhi said huge investments were made in the Adani group through alleged shell companies and asked whose money it was.
Answering a question from CPM Rajya Sabha member John Brittas, the government said in a written reply on March 21 that “the data/details regarding offshore shell companies owned by Indian citizens is not available”. On whether it had acted to collect details of offshore shell companies whose “ultimate beneficial ownership” was held by Indian citizens, the government suggested the question of such action “does not arise” since “an offshore shell company is not defined in the acts administered by the ministry of finance”.
At a news conference on March 25, Rahul said “somebody has invested Rs 20,000 crore in the Adani group through shell companies” and sought to know why the government was not “asking whose money is coming”. “I will keep asking this question,” Rahul said. He emphasised the political importance of the issue by alleging that the disqualification of his Lok Sabha membership owed to him asking questions about businessman Gautam Adani that had “scared” Prime Minister Narendra Modi.
Brittas had sought to know: “(a) The details of offshore shell companies whose Ultimate Beneficial Ownership (UBO) are held by Indian citizens
“(b) The details of actions so far taken by government to collect the details of UBO of Indian citizens in offshore companies incorporated in tax-haven countries
“(c) The status of actions taken against those Indian citizens whose names were revealed through Panama Paper, Pandora Paper, Paradise Paper and such other leaks
“(d) The details of foreign governments who have offered the Union government to share the offshore dealings of Indian citizens and
“(e) The details thereof and the actions taken thereon.”
The reply from junior finance minister Pankaj Chaudhary said: “(a) It is submitted that an offshore shell company is not defined in the acts administered by the ministry of finance. Data/ details regarding offshore shell companies owned by Indian citizens is not available.
“(b) In view of (a) above, specific action does not arise.”
The government also avoided revealing the total number and details of Indian citizens whose names figured on the Panama Papers, Paradise Papers, Pandora Papers and other such leaked documents on the offshore financial activities of high-profile people and companies.
Chaudhary gave the restricted and vague reply that “undisclosed income of more than Rs 13,800 crore have been brought to tax” in the Panama and Paradise Paper leaks cases as on December 31, 2022, and that “more than 250 India-linked entities have been identified in Pandora Paper leaks”.
The government made the partial disclosure — without revealing details of the delinquents — that “undisclosed income of more than Rs 8,468 crore have been brought to tax and penalty of more than Rs 1,294 crore levied” on account of “deposits made in unreported foreign bank accounts in HSBC cases”.
It said that, as on December 31, 2022, “assessments under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, have been completed in 408 cases, raising tax demand of over Rs 15,664 crores”.
However, the government avoided revealing the total number and details of the unfinished cases.
It said that 648 disclosures involving undisclosed foreign assets worth Rs 4,164 crore had been made in the one-time compliance window of three months that closed on September 30, 2015, under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. It said the amount collected through taxes and penalty in such cases was about Rs 2,476 crore.
The rest of the reply gave general information about, for instance, what information-exchange mechanisms the government had entered into “for administration of taxation and enforcement laws for various purposes which may include offshore companies”. It also outlined in general terms the procedures adopted in tackling foreign exchange violations, and the laws passed and investigative units constituted to curb the stashing of black money abroad, without giving the details sought by Brittas.