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Rediff.com  » Business » Taxman plans super sleuth to monitor cash trails!

Taxman plans super sleuth to monitor cash trails!

Last updated on: January 17, 2011 13:13 IST

Taxman plans super sleuth to monitor cash trails!

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Santosh Tiwari in New Delhi


Nineteen Eighty-Four
may arrive sooner than you think. And, it will be the income-tax department that could take on the role of an Orwellian Big Brother should the government clear a far-reaching proposal to create a directorate of criminal investigation on the lines of a similar wing of the internal revenue service in the United States.

Under a blueprint currently being vetted by the I-T department, the directorate will house a centralised repository of data culled from telephone and Internet intercepts, banking and market transactions, cross-border deals and even your friendly neighbourhood ATM.

To analyse this data and red-flag suspicious activities, the department will also acquire state-of-the-art forensic tools, including software to follow cash trails, track money laundering, conduct forensic audits, mine books and other texts, as well as plug into overseas servers and social networking sites.

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Image: I-T department is planning to create a directorate of criminal investigation like the US's IRS has.
Photographs: Uttam Ghosh/Rediff.com
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Although the scope and structure of the proposed directorate are still under discussion, it is expected to monitor real time information on fund flows, gather intelligence from various sources -- preferably unobtrusively -- to help develop cases for action leading to search and prosecution, maintain a record of financial activities, as well as coordinate and share information with other intelligence agencies.

High up on the proposed directorate's radar will be illegal sources of funds, organised crime-tainted money, terrorist- and Naxal-related finances, tax evasion and offshored black money, cash from narcotics, and other activities that threaten the physical and economic security of the country.

India Inc will not be spared from the directorate's ubiquitous gaze.

Among the corporate tax crimes that the body is expected to track include asset stripping, hawala transactions, large-scale refund frauds, round-tripping, and organised misuse of exemption schemes.

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Photographs: Uttam Ghosh/Rediff.com
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According to a senior income-tax department official, the idea behind the creation of such a body is to conduct focused investigations and take matters handled by the criminal intelligence wing to their logical conclusion.

He added that while the whole system might not be put in place at one go, the department wants to assemble the architecture of a centralised data repository piece by piece.

On the apprehension of possible misuse of the intelligence information gathered with the help of such an agency, the official stressed that the department would exercise extreme caution and would be subject to the necessary oversight.

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Photographs: Reuters
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The official said that to meet the proposed mandate, a legal framework would ideally need to be provided, including notification of the agency under the Indian Telegraph Act, 1885, for lawful interception and surveillance of telephone and internet; as an approved agency under the Unlawful Activities Act, 1967, to freeze funds and bank accounts; and inclusion of abusive tax frauds and organised financial frauds as predicate offences under the Prevention of Money Laundering Act, 2002.

With this legislative backing, the proposed directorate of criminal investigation can be empowered as an agency to investigate offences falling under its ambit, the official explained.


Photographs: Uttam Ghosh/Rediff.com
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