A day after it “strongly advised” the finance ministry to ensure that all enforcement agencies under it were “absolutely neutral, impartial and non-discriminatory” while cracking down on illicit money use in elections, the Election Commission (EC) has called a meeting with the chairman of the Central Board of Direct Taxes (CBDT) and the revenue secretary, ET has learnt. Meanwhile, the chief accountant of the Congress party was summoned for questioning by the income tax department on Monday, sources said. “We expect that senior leaders could be called in for further questioning on Tuesday,” a senior Congress functionary said.
Government sources indicated Congress treasurer Ahmed Patel could be called in for questioning on Tuesday. Patel handles all financial matters and the I-T department’s findings on alleged hawala transactions would need to be explained by him.The EC meeting with the CBDT chief and the revenue secretary is expected to be held at Nirvachan Sadan on Tuesday morning. ET has learnt that the EC will be taking up the matter of the raids and hold further discussions on its April 7 advisory.The move comes as the I-T department said on Monday that raids in Madhya Pradesh in the past two days had uncovered a “widespread” and “well-organised racket” involving the “collection” of unaccounted cash of about ?281 crore linked to a political party. Those raided were said to have links with Madhya Pradesh chief minister Kamal Nath, who has characterised the actions as intimidation.
Report Shared With EC
Income tax authorities had conducted predawn searches on Sunday on premises connected to Nath’s aides Praveen Kakkar and Rajendra Miglani and executives linked with his brother-in-law’s firm Moser Baer and his nephew Ratul Puri’s company. Searches continued on Monday and there were also reports of some clashes between Madhya Pradesh police and CRPF personnel.The I-T department is learnt to have shared reports on the issue with the EC on Monday evening, sources said.
The Delhi Directorate of Income Tax (Investigation) initiated search and seizure against a group in the National Capital Region, Bhopal, Indore and Goa based on credible information of large scale collection, possession and movement of unaccounted assets, the department said in its release. More than 300 income tax officials participated in operations at 52 locations in four states, it said. The people involved are engaged in business, politics and public service, the statement said without naming anyone. Finance minister Arun Jaitley had referred to the raids in a blog saying that taxpayer and government money was being siphoned off through PWD and other departments of the government.
The chief electoral officer of MP told the EC in his first report that he had been informed of the raid several hours after it was conducted. The events are learnt to have led to the EC letter to the revenue secretary saying that in case of suspected use of illicit money for electoral purpose, the chief electoral officer should be kept informed during the period of model code of conduct. “The Election Commission strongly advises that all enforcement actions during the election period, even when conducted ruthlessly with a view to curb the blatant electoral malpractice (of using money power to influence voter behaviour), be absolutely neutral, impartial and non-discriminatory,” the poll panel said.
It acknowledged that enforcement agencies working under the administrative control of the Department of Revenue “must be undertaking enforcement actions based on a variety of inputs and actionable intelligence, as per extant laws”, but added that the CEO should be “suitably informed during the MCC period”.The I-T department statement said a part of the cash was also transferred to the headquarters of a major political party in Delhi, including about Rs 20 crore moved through hawala channels recently from the residence of a senior functionary at Tughlak Road, New Delhi.Collection and disbursement records of cash in the form of handwritten diaries, computer files and Excel sheets corroborated the findings, it said. Unaccounted cash of Rs 14.6 crore has been found so far, besides 252 bottles of liquor, a few arms and tiger skins, it said.
The searches in Delhi on the group of a close relative of the senior functionary have further led to seizure of incriminating evidence including cash books recording unaccounted transactions of Rs 230 crore, siphoning off of money through bogus billing of more than Rs 242 crore and evidence of more than 80 companies in tax havens, the statement said. Several unaccounted/benami properties at posh locations in Delhi have also been detected, it said. Instances of violations of the model code of conduct are being brought to the notice of the EC, the statement said.
The Economics Times, 9th April 2019
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