Breach of confidentiality of information provided by FIU-IND - Income Tax - F. No. 290/27/2013-Dir (Inv. IV)/828

F. No. 290/27/2013-Dir (Inv. IV)/828 Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes Room No. 17, Ground Floor, ARA Centre, B-2; Jhandewalan Extension, New Delhi - 110055 4th September, 2017 OFFICE MEMORANDUM Sub: Breach of confidentiality of information provided by FIU-IND Ref: O.M. vide F. No. 290/27/2013-Dir (Inv. lV)/442 dated 27th June, 2014, 291 dated 6th May. 2015, F. No. 290/52/ 2013/ Dir.(Inv.lV)/378 dated 15th May, 2015, F. No. 290/27/2013 Dir(lnv.IV)/ 2916 dated 31.3.2016 1. The FIU-IND has brought to the notice of CBDT certain instances involving breach of the confidentiality of information provided by FIU-IND by Investigating Officers wherein, they have disclosed the source of information, either as FIU-IND or as STR to the concerned bank branch; while seeking bank statements etc. during the course of investigation into STRs. Such instances have been brought to light in the past also and CBDT has issued guidelines vide O.M.s under reference regarding procedure to be followed while handling information received from FIU-IND. 2. Further, certain instances have come to the notice of CBDT, wherein, senior bank officers have been summoned by Investigating Officer to produce, documents seemingly unrelated to investigation under the Income-tax Act, 1961, like the Anti Money Laundering Policy, Risk Rating Policy etc. of the Banks. These documents could be relevant for investigation under Prevention of Money Laundering Act, which is not administered by the Department. 3. The undersigned is directed to state that information received from FIU-IND is governed by a Memorandum of Understanding between CBDT and FIU-IND which prescribes maintenance of strict confidentiality of information received from FIU-IND. As per the MoU, CBDT has agreed to ensure that the information disseminated by FIU-IND, whether in paper or electronic form, including the source of information, is protected from unauthorised use and proliferation and kept confidential, throughout the chain of transmission of the information . Further, while disseminating the information, CBDT is required to ensure that dissemination is done on need to know basis and such information will not be transferred to a third party without prior consent of the party from whom information was received . Further, information received front FIU-IND will not be used as evidence in any departmental or judicial proceedings and the identity of the entity from whom information has been received or the name of the officer who has forwarded the information, shall not be disclosed, in any departmental or judicial proceedings . 3.1 Further, it has been brought to the notice of the Board that while requisitioning information from Banks, the STR number of that account or linked account or the fact that information has been provided by FIU is being mentioned. In this regard, attention is drawn to the fact that STRs are shared by the Principal Officer of the bank at central level and this may not be even in the knowledge of the branch manager from whom information is being asked by the IT authorities. The Board has taken a very serious view of the repeated instances of such breach of confidentiality by I.O.s despite unambiguous guidelines to the field formation in this regard. Such breaches not only portray the Department in a poor light but also cause a dent in the reputation of the organization as a whole casting aspersions on the professionalism and credibility of the Department. 3.2 Further, in respect of the foreign intelligence received through FIU-IND, India is under international commitment to maintain strict confidentiality in respect of information shared by the foreign disclosing agencies and any breach in this regard may cause an irreparable damage to the country as whole. 4. In view of the above, it is directed that: (i) Utmost confidentiality must be maintained in respect of information and documents received from FIU-IND. (ii) These shall not be shared with/by or allowed access to any person in contravention of the MoU and guidelines of CBDT in this regard. (iii) The source of information as FIU-IND or STR shall not be mentioned by any officer in any communication with any third party, including banks. (iv) All officers are advised to seek as far as possible only such documents as may have any bearing/ relevance to the direct tax investigations and may restrain from calling for documents unrelated to the investigations, especially of the kind mentioned at para 2 supra. (v) In summons/ notices/ assessment orders or any other communications, ITOs/ ADsIT/ DDsIT/ Addl. DsIT/ DsIT and the AOs/ JCsIT/ Addl. CsIT/ CsIT may not refer to the source of the information and name of FIU-IND should not be mentioned. For making any reference to the source of information, it may be mentioned in the that credible information/ source information has been received to the effect that . 5. Any deviation/ violation of above guidelines shall be viewed adversely inviting strict action against the concerned official. This may be widely circulated and brought to the notice of all concerned. 6. This issues with the approval of Member (Investigation), CBDT. (Kalpana Singh) Joint Commissioner of lncome-tax(OSD) (Investigation IV), CBDT Tel: 011-23519408 Fax:011-23547571