The Income Tax department has decided to include the offence of money laundering in its soon to be filed charge sheet against individuals named in the classified HSBC list, for stashing illegal funds.
The department in its probe has found that the illegal funds were laundered in many cases which can be categorised as “criminal proceeds of crime”.
According to sources, I-T may have to coordinate its prosecution action in this case with the Enforcement Directorate which is the designated enforcement agency for the Prevention of Money Laundering Act (PMLA) in the country.
The stringent and criminal provisions of the PMLA can ensure attachment of properties of the accused and handing down of strict punishment by courts.
The I-T department is also particularly wary about the recent disclosure made by a US Senate panel that had accused HSBC of exposing the American and Indian financial systems to various terror financing, money laundering and drug trafficking activities due to its poor risk control systems.
“The disclosures that have come recently in the US corroborate what tax department investigations in this case indicate. Money laundering charges would be pressed against individuals,” the top sources in the Finance Ministry said.
Various probe units of the I-T department, according to the sources, have informed the Central Board of Direct Taxes (CBDT) and top echelons of the Finance Ministry about these developments.
Meanwhile, the department is set to file prosecution cases in designated courts and the first complaints are expected to be filed in Delhi and Mumbai with regard to people figuring on the banks’ list.
In an official statement earlier this week, the Finance Ministry had said that the Income Tax department has begun assessment proceedings in “cases related to HSBC accounts”.
The department, according to the sources, has prepared a sound case after learning from the experiences of the LGT Bank accounts cases which is already under prosecution.
India has reportedly obtained data of over 700 HSBC accounts from French government channels.
In 80 cases till now, the department has detected undisclosed income of Rs 438 crore and taxes of Rs 135 crore have been realised so far.