Information about certain offshore entities reportedly held by various Indian persons had appeared in media, earlier this year. The information is attributed to be part of ‘Panama Papers’ leaks. The International Consortium of Investigative Journalists (ICIJ), a Washington based organization which has reportedly made the revelations pertaining to the Panama Papers, has put a caveat on its website (www.icij.org) by mentioning that it should not be assumed that everyone who appears in the Panama Papers is involved in tax avoidance or evasion and there are legitimate reasons to create a company in an offshore jurisdiction and many people declare them to their tax authorities when that is required.

On 4th April 2016, the Government constituted a Multi-Agency Group, inter alia, for facilitating co-ordinated and speedy investigationin the cases of Indian persons allegedly having undisclosed foreign assets and whose names appeared in Panama Papers leaks. The Group consists of the officers of Investigation Division of the Central Board of Direct Taxes (CBDT), Foreign Tax & Tax Research Division of CBDT, Enforcement Directorate (ED), Financial Intelligence Unit (FIU) and Reserve Bank of India, and its Convener is Member (Investigation), CBDT.

The Government has taken necessary measures for expeditious investigation in such cases including through enhanced international cooperation. The Multi-Agency Group has so far submitted 6 reports to the Government. The Special Investigation Team on black money has been kept informed of the progress. Investigation is at different stages in specific cases. Further course of action including assessment of undisclosed income, levy of applicable penalties and prosecution in appropriate cases, depends upon outcome of the investigation in respective cases. Disclosure of information regarding specific taxpayers is prohibited except as provided under section 138 of the Income tax Act, 1961 and section 84 of the Black Money (Undisclosed Foreign Income and Assets) & Imposition of Tax Act, 2015.

This was stated by Shri Santosh Kumar Gangwar, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.

Offshore asset investigations: coordinated multi agency probe with statutory limits on taxpayer information disclosure. A Multi-Agency Group has been constituted to coordinate investigation of alleged undisclosed offshore assets revealed in the Panama Papers, undertaking international cooperation, submitting reports to the Government, and informing the Special Investigation Team; further action including assessment, penalties and prosecution will follow investigative outcomes. The statement stresses that disclosure of information about specific taxpayers is restricted by statute and that appearance in leaked material is not, alone, indicative of tax avoidance or evasion.