The government’s top law officer has shot down a proposal from tax authorities to launch prosecution against a Swiss bank’s officials for allegedly abetting Pune businessman Hassan Ali Khan in filing false tax returns.
Attorney General GE Vahanvati has based his opinion on the grounds that tax authorities have failed to provide enough evidence.
Khan, accused in cases of money laundering, was arrested by the Enforcement Directorate in March, 2011, and has been asked to pay thousands of crores of rupees as unpaid taxes.
He is accused of holding $8 billion (more than Rs 49,000 crore at present value of the rupee to the US dollar) in the Union Bank of Switzerland (UBS).
The Central Board of Direct Taxes (CBDT) had sought Vahanvati’s opinion on whether prosecution under various sections of the Income Tax Act could be launched.
Khan’s links with Swiss banks first came to the fore in 2007 when certain documents were recovered.
Vahanvati opined that he did not find any material in the file referred to him suggesting such abetment or inducement on part of the officials of UBS.
He also cautioned that any decision to launch prosecution must only be taken after enough material was gathered that prima facie suggested abetment or inducement by the bank’s officials.
Vahanvati also pointed out UBS officials had maintained that Khan did not hold any account with the bank except three accounts opened in July 2001 and closed in October, 2011.
He said to prove that bank officials were not telling the truth and intended to help Khan evade tax, the tax authorities here should have enough evidence to proceed.
Last year, the finance ministry had informed Parliament’s Public Accounts Committee that recovery of tax arrears from Khan was not possible despite attaching his known movable and immovable assets.
The Department of Revenue had said that as per existing guidelines, recovery through sale of attached properties could be made only after the decision of appeal filed before the Income Tax Appellate Tribunal.
(With PTI inputs)