They either control or have interest in some 3,000 companies.

The Income-Tax Department has launched a probe into the suspected undisclosed foreign assets held by more than 1,900 persons of Indian origin, who either control or have financial interests in close to 3,000 companies incorporated in Panama.

A scrutiny of the data, provided by the Enforcement Directorate, revealed that several high net-worth individuals had interests in as many as 20 companies.

Among the prominent names in the list is that of Vijay Mallya, said to be linked to Panama-based Vee Tee International Inc, set up in August 1992. Incidentally, the company’s name had earlier surfaced during the probe into offshore business interests and assets of Mr. Mallya.

The list of 1,900 is in addition to over 400 individuals already being examined by the I-T Department after their names surfaced in papers leaked from a Panama law firm last year.

Registered in tax haven

In the Panama Papers case, almost 90% of the companies were incorporated in the British Virgin Islands and the rest were in Switzerland and the U.K. jurisdictions.

However, these companies were set up in Panama itself.

The I-T Department — the nodal agency for communications with tax agencies abroad — is now expected to send requests to the Panama tax authorities under the information exchange agreement for further details on the data provided by the ED.

Confirmation received

The Directorate has already received confirmation from the Panama’s Financial Intelligence Unit on the existence of at least 60% of the companies. However, the legally admissible documents will have to be collected by the I-T Department from the Panama authorities through the laid down information-exchange procedure for further probe.

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The first thing the department will first seek is copies of incorporation documents of these companies and their financial transactions. It is suspected that a significant part of the funds generated through unlawful acts like tax evasion and money laundering was parked abroad.

Before launching formal investigations against the individuals, the authorities will first confirm their residential status at the time of alleged commission of offence, as NRIs are not legally required to report their offshore interests.

Even though many of these companies have now been shut, there is no time bar on penal action by the I-T Department against the violating “assessees” under the stringent Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, as provided in Section 48.

Govt. plan of action

The government has drawn up a comprehensive plan of action against those who have not, partially or fully, disclosed offshore assets. The Black Money Act and the co-related 2015 amendments to the Prevention of Money Laundering Act (PMLA) and the Foreign Exchange Management Act (FEMA), provide for a combined attachment and penalty of up to 520% of the undisclosed assets held abroad, apart from criminal prosecutions.

Under the Black Money Act, violators are liable to prosecution besides tax and penalty up to 120% of the amount, while under PMLA, the ED can attach 100% assets of equivalent value and, there is also a Sessions trial wherein the onus of proof lies with the accused. Under the Foreign Exchange Management Act (FEMA), there are provisions for up to 300% penalty and asset attachment of equivalent value.

Meanwhile, it is learnt that the I-T probe in the Panama Papers cases against over 400 Indians is in an advanced stage. In all, 165 partial or complete details have been received from the British Virgin Islands, Switzerland and the U.K., in response to about 300 requests under the information exchange agreements. The Reserve Bank of India has confirmed foreign exchange violations in about 50 cases.