Now, ostensibly, the Government is acting, with chargesheets having been filed against a dozen people, including the Jain brothers and a few bureaucrats, under the Prevention of Corruption Act. However, the earlier inhibitions about moving against senior politicos persist. This is apparent from the Income-Tax Department's decision last month not to issue notices to the VIP recipients of the slush funds from hawala scamster S.K. Jain. However, a formal announcement is still pending for the obvious fear of adverse media publicity. According to sources, in October the Central Board of Direct Taxes (CBDT) had directed that "no notices should be issued without its permission".
This followed several months of inconclusive debate over whether the money disbursed by Jain (and received by over a hundred people, including 67 politicians) constituted "income, bribe or gift". Curiously, the IT Department decided not to pursue the matter further. The recipients will thus not be asked to furnish details of their assets or those of their relatives, when declaring their tax liabilities. Even the 12 persons—none of them politicians—recently charged by the CBI have escaped the IT net.
It is S.K. Jain himself who will have to bear the burden of paying tax on the Rs 65 crore involved in the hawala scam. Of this amount, Rs 47 crore was disbursed to a veritable who's who of politicians. Other recipients, according to the CBI, included 32 family members, friends and employees of Jain, three civil servants, three companies, various institutions and six political parties.
Eleven of the 52 politicians so far questioned in this case—including former deputy prime minister Devi Lal, Janata Dal leader Sharad Yadav, Environment Minister Rajesh Pilot, former Union minister Arif Mohammad Khan, Samata Party leader Cha-ndrajit Yadav, Congress MP Arvind Netam and ex-MP Chand Ram—claim the money went into their respective party funds.
Ordinarily, IT notices should have been issued to the political parties concerned regarding receipt of the funds. The authorities, however, have chosen to do nothing. The Director, Investigation (Delhi Zone), Income Tax, P.K. Kashyap, says: "What can we do? No party, except for the CPI(M) and the BJP, has filed returns of income."
As for the main accused, Jain, the IT authorities recently issued three show-cause notices to him seeking to:
- Reassess his income of Rs 65 crore (the amount involved in the hawala scam);
- Impose gift tax on him for the money disbursed (Rs 56 crore); and
- Charge wealth tax on the said Rs 65 crore.
The CBI report confirms that the hawala money was routed through gold smugglers operating between Dubai and India. It also details the modus operandi used by the hawala dealers. Mohini Jain, a London-based private banker informally quizzed by the CBI, had admitted that two individuals, Shambhu Dayal Sharma and Moolchand Shah, were working as her hawala agents in Delhi and Bombay, respectively.
The wife of a London-based NRI, Sudershan Arora, was also found to be involved in transferring the money to one Tariq Bhai alias "TR" in Dubai. The report says: "Tariq Bhai used to buy gold from the amounts so transferred by Mohini Jain and Rekha Jain from UK to Dubai and smuggle the same to India through a conduit of smugglers operating between Dubai and India. Shambhu Dayal Sharma and Moolchand Shah used to receive it in India." The CBI's efforts to interrogate Tariq Bhai in Dubai failed.
On the basis of the CBI report, the IT authorities summoned details of the assets of at least 12 politicians, including that of Petroleum Minister, Satish Sharma. Curiously, the papers were quietly sent back without further action. The inaction on the part of the IT authorities will be difficult to explain.
