The Income Tax department on Wednesday said it has issued notices to 50 entities in Delhi, which includes the Aam Aadmi Party and Congress, to check alleged tax evasion by fake companies which issue cheques to convert black money into white.
The Central Board of Direct Taxes, the apex policy making body of the I-T, said the taxman has taken the action after it was suspected that a number of bogus or ‘entry operator’ companies were converting illegal cash into legitimate money in the national capital by donating black money to parties after similar instances were detected by its sleuths in Kolkata.
The notices, the CBDT said, were issued on February 9, a day before counting of votes in Delhi. The AAP sweept the results as it won 67 out of the total 70 assembly seats and will now be forming government soon.
“The notices which have been issued in Delhi include the AAP and Congress for receiving donations worth Rs 2 crore and Rs 10 lakh respectively. The investigations wing of the department has taken up the cases based on information obtained through media reports and preliminary inquiry done subsequently,” a senior I-T officer said.
The officer added that in the 48 other cases, there are instances of “routed” donations made to entities associated with some political parties that are present and are in power in some eastern and western states.
The CBDT said in a statement that the notices issued seek information about the identity of the contributors of these cheques.
“I-T department had initiated investigation into issuance of cheques by companies which are acting as entry operators to convert illegal cash into legitimate money. Recently in Kolkata, this investigation led to detection of substantial unaccounted income. In these cases, the unaccounted income was sought to be converted into legitimate money with the help of non-genuine companies which were acting as entry operators.
“Similarly and based on media reports, enquiry was initiated in Delhi into issuance of cheques by companies which were alleged to be non-genuine and entry operators. The companies and their Directors could not be traced at the addresses given to banks and ministry of corporate affairs,” the CBDT said.
CBDT said that an examination of the accounts of these companies revealed that “they have issued accommodation entries to several persons and entities for substantial amounts.
“It was also found that sources for such entries were prima facie not genuine. To carry forward the investigation process, notices were issued to about 50 persons and entities including two political parties on February 9. These notices seek information about the identity of the contributors and other relevant details which are necessary to complete the process of investigation,” it said.
The AAP acknowledged it has indeed received a notice from the tax department over the donation issue and that it is ready to face a probe in this regard.
The I-T action comes in the backdrop of allegations made by a break-away group of AAP called AVAM which alleged that the Arvind Kejriwal-led party had received funding from dubious companies in March last year.
The group had alleged that AAP received four cheques of Rs 50 lakh each from different companies from a bank on March 31 last year in late night hours.
Officials privy to the probe said a similar operation conducted in Kolkata by the department in November last year resulted in an “admission” of Rs 60 crore tax revenue, out of which few cases were associated with donations made for political purposes and to political parties.
“The investigations in Kolkata are still on,” they said.
All the companies which were sent the latest notices have been asked by the I-T authorities to produce their books of accounts, people in-charge of business activities and donation receipts maintained in specific cases.
They said the department, in specific case of political parties, is analysing a recent ‘contributions’ report sent to it by the Election Commission, which tells them about the exact declared status of donations and other funds received by parties from various entities.
“The EC report is being analysed and some more notices will be issued soon to some of the political parties,” they said.
