Seizure of black money

The word ‘black money’ is not defined under the Income Tax Act, 1961, Customs Act, 1962, CGST Act, 2017, Central Excise Act, 1944 and erstwhile Chapter V of Finance Act, 2017 (related to Service Tax). This was stated by Union Minister of State for Finance Shri Pankaj Chaudhary in a written reply to a question in Lok Sabha.

As far as Income Tax Department (ITD) is concerned, the Minister stated, whenever any credible information of ‘direct-tax’ evasion comes to its notice, it takes suitable action(s), including the search & seizure operations, to bring to tax, undisclosed income. The details of assets seized during the search & seizure operations is provided in the ANNEXURE.

Further, the details of cash seizures made by the field formations of Central Board of Indirect Taxes & Customs (CBIC), including Directorate of Revenue Intelligence (DRI), are provided in the ANNEXURE.

The details of actions taken by ED are included in ANNEXURE.

Giving out more information, the Minister stated that the Government enacted a comprehensive and a stringent new law, namely, the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (BMA, 2015) that has come into force w.e.f. 01.07.2015. The offence of willful attempt to evade tax, etc. in relation to undisclosed foreign income/assets is a Scheduled Offence under the Prevention of Money Laundering Act, 2002 (PMLA), regarding which suitable action is taken by Directorate of Enforcement (ED) for identification of proceeds of crime generated, provisional attachments and filing of prosecution complaints in suitable cases.

The details of actions taken by ITD under BMA, 2015 are as under:

• 648 disclosures involving undisclosed foreign assets worth Rs. 4,164 crore were made in the one-time three months compliance window, under BMA, 2015, which closed on 30^th September 2015. The amount collected by way of tax and penalty in such cases was about Rs. 2,476 crore.
• As on 30.11.2022, assessments under BMA, 2015 have been completed in 394 cases, raising tax demand of over Rs. 15,570 crore. Further, 125 prosecution complaints have been filed under the provisions of BMA, 2015. The State/UT-Wise details are not maintained separately.

The details of actions taken by ED in relation to cases involving violations related to BMA, 2015 are as under:

• During investigation in 13 PMLA cases in relation to predicate offences involving violations related to BMA, 2015, proceeds of crime amounting to Rs. 42.57 crore has been attached/seized and 03 Prosecution complaints have been filed.
• Further, assets amounting to Rs. 93.07 crore has been seized under section 37A of FEMA in 05 cases.

The Minister stated that the Government of India has entered into Double Taxation Avoidance Agreements /Tax Information Exchange Agreements /Multilateral Convention on Mutual Administrative Assistance in Tax Matters/SAARC Multilateral Agreement (“tax treaties”) with other countries which provide for exchange of information, which is foreseeably relevant for administration and enforcement of domestic laws concerning taxes. India has been proactively engaging with foreign governments, for exchange of information under these tax treaties.

The Minister further stated that FIU-India is a member of the Egmont Group, an international organisation for exchange of information and Co-operation amongst Financial Intelligence Units (FIUs). The group comprises 167 members as on date. As members to the Egmont Group, FIUs can exchange freely information on real time basis through a highly secured network - Egmont Secured Web (ESW) - on various matters as per their roles and functions. FIU-India has also entered into Memoranda of understanding (MoUs) with 48 countries to strengthen bilateral relationships with its foreign counterparts since 2008 upto 2022 for exchange of intelligence.

Giving more information, the Minister stated that there is no official estimation or methodology to define/measure the amount of black money in the country. However, the Government had commissioned a study, inter alia, on estimation of unaccounted income and wealth inside and outside the country, through National Institute of Public Finance and Policy (NIPFP), National Council of Applied Economic Research (NCAER) and National Institute of Financial Management (NIFM). The reports and a detailed Government’s response on them were forwarded to the Lok Sabha Secretariat for placing them before the Standing Committee on Finance. The Standing Committee on Finance, after due deliberations and taking necessary oral evidences, presented a preliminary report on the matter (i.e. 73^rd Report of Standing Committee on Finance) to Speaker of Lok Sabha on 28.03.2019 and this report has observed that “the unaccounted income and wealth inside and outside the country do not appear amenable to credible estimation in the context of India.”