Middlemen-bureaucrats nexus: IT dept tells HC it gave ACB list of 103 individuals, entities
MUMBAI: The Income Tax (IT) department has informed the Bombay high court that it has provided the Maharashtra Anti-Corruption Bureau (ACB) with a list of 103 individuals and entities being investigated in connection with an alleged nexus between intermediaries and bureaucrats/politicians in the state
MUMBAI: The Income Tax (IT) department has informed the Bombay high court that it has provided the Maharashtra Anti-Corruption Bureau (ACB) with a list of 103 individuals and entities being investigated in connection with an alleged nexus between intermediaries and bureaucrats/politicians in the state.
The list was included in an affidavit filed by the Director General of Income Tax (Investigation) on Wednesday regarding the action the department has taken after the nexus was exposed during one of its raids in September 2021. The high court had asked the IT department to file the affidavit in September 2024 in response to a public interest litigation (PIL) from activist lawyer Pravin Wategaonkar.
According to Wategaonkar, at least one of the individuals on the list was also involved in the 2010 Adarsh Housing Society scam, in which politicians, bureaucrats and military officials colluded to violate rules to get flats in a south Mumbai housing society built for defence personnel and war widows allotted to themselves and their relatives.
“As per the IT affidavit, the middleman had loaned ₹30 lakh to [the accused] Kanhaiyalal Gidwani, ₹23 lakh to Kailash Gidwani, and ₹27 lakh to Amit Gidwani,” said Wategaonkar, who had earlier also filed a PIL concerning the Adarsh scam.
According to IT department officials, one of the businessmen under the scanner had amassed a large amount of unaccounted income by purchasing land from farmers and transferring it to government undertakings or big companies. Many senior bureaucrats, their relatives, and other prominent people allegedly invested in these schemes.
The nexus came to light after the IT department conducted searches at several places in 2021 and unearthed transactions worth around ₹1,050 crore undertaken by a syndicate comprising businesspersons, intermediaries and people holding public office. The transactions include cash paid by bureaucrats to get key posts in a certain state ministry and cash paid by contractors to get payments released.
The IT department had conducted searches at 25 residential and 15 office premises, and some suites at The Oberoi hotel in Mumbai that were booked by intermediaries on a long-term basis to meet clients. During the searches, the department seized cash worth ₹4.6 crore and jewellery worth ₹3.42 crore. The searches revealed that the intermediaries were using Angadia facilities to transfer cash. The Angadia system is a traditional banking system involving a network of couriers who transport valuable items for a fee.
In the backdrop of the searches, Wategaonkar had filed a PIL in the high court seeking the registration of an offence against the concerned persons under the Prevention of Corruption Act. In his petition, the Thane resident said the IT department’s searches had revealed that the intermediaries were working as conduits for bureaucrats and politicians in the Maharashtra government in dealings related to land allotment, contract extension, and mining leases, among others.
The petition also said that although the IT department claimed to have shared the outcome of the searches with law enforcement agencies in the Regional Economic Intelligence Committee, no action had been taken. In response, the IT department’s affidavit stated that after the searches were conducted in 2021, it had completed the assessment of 103 entities and individuals, and shared their details with the ACB.
Wategaonkar, however, said that the names of the bureaucrats had not been revealed, even though the IT department had disclosed the names of some intermediaries engaged in liaising with various state departments and despite the searches revealing that some bureaucrats had purchased properties in the names of their relatives, friends, or acquaintances.