Cash-for-tax settlement scandal: Union minister, senior tax officers demand action against corrupt officials

New Delhi: A high profile case of alleged corruption within the top brass of the Income Tax Department has come to light with the Director General (Investigation) writing to the Central Board of Direct Taxes (CBDT) to initiate action against one of the additional directors. The matter unfolded when Union Minister of State for Agriculture Gajendra Singh Shekhawat took the matter up with the income tax authority, regarding the alleged involvement of the Additional Director, Income Tax (Investigation), Udaipur. It is learnt that recently a vigilance inquiry was ordered; however, the CBDT is yet to begin the crackdown. When Firstpost contacted Union Minister Shekhawat, he said: “I wrote to then MoS Finance Minister Jayant Sinha and Finance Minister Arun Jaitley. It is for the Ministry and CBDT to take a call. I did my ‘dharma’ by complaining about a huge corruption case and it is now the concerned authority’s responsibility to take action.” The case of alleged kickbacks for manipulating tax assessment tumbled out around two years ago when Shekhawat was a BJP MP from Jodhpur and B R Agarwal, Chairman of Pacific Medical University, met the Principal Director (Investigation). Agarwal had alleged that the said Additional Director at Udaipur took Rs 75 lakh to settle his assessment case, but eventually claimed that the university’s Chairman did not manipulate tax papers and thus extended no benefit to him. [caption id=“attachment_3516317” align=“alignleft” width=“380”] Representational image. WP[/caption] Subsequently, Agarwal sought his money back. He further alleged that the said Additional Director returned only Rs 25 lakh out of the Rs 75 lakh paid to him as kickback. The Additional Director told Agarwal that he distributed Rs 50 lakh equally among his seniors – the Principal Director (Investigation) and the then Director General (DG), Income Tax (Investigation), Rajasthan, who is now Member (Legislation), CBDT. When contacted about the matter, the said Member refused to comment. A questionnaire sent to the CBDT remained unanswered. It is learnt that when Shekhawat and Agarwal met the Principal Director in his office on 6 April, 2016, the latter immediately wrote to DD Goel, then Director General, Income Tax (Investigation) Rajasthan for dragging honest officers into the corruption row and demanded action against the Additional Director at Udaipur. The Principal Director’s communiqué to Goel said Agarwal’s Pacific Medical University was searched by the Income Tax Department in August 2015 and that the Additional Director at Udaipur promised to extend undue benefits to Agarwal in the search and post search matter for a bribe of Rs 75 lakh. The Additional Director asked him to pay Rs 50 lakh to his conduit on 13 September,2015 at his residence in Shyam Nagar, Jaipur. A few days later, the remaining amount of Rs 25 lakh too was paid to the conduit, the Principal Director stated in his letter. A few weeks later when Agarwal came to know that an adverse appraisal report has been sent in his case and no undue benefit as promised by the Additional Director at Udaipur was extended to him, he sought his money back. The Additional Director, after a lot of persuasion, returned only Rs 25 lakh on 23 March 2016. This event took place at his residence in Mahesh Nagar, Jaipur. With regard to the remaining amount of Rs 50 lakh, The Additional Director at Udaipur claimed that the same could not be returned since the money was given in equal sum to his seniors. He also persuaded Agarwal not to bring the matter to the Principal Director’s notice and reiterated his promise to help him with tax assistance. During the meeting with the Principal Director, Minister Shekhawat and Agarwal made it clear that “they have come forward to report the matter to him directly only after they found from sources in the department as well as from outside about his reputation of impeccable integrity as also integrity of the then DG, Income Tax (Investigation), Rajasthan." “The matter was immediately reported to you by me and in the afternoon, Gajendra Singh Shekhawat and B R Agarwal also met you personally in my presence and reiterated the above refereed allegations in clear terms. When the Additional Director at Udaipur was called by you to your room for confrontation in their presence, they again reiterated the allegations in his presence and he had nothing to say,” the Principal Director wrote to DD Goel. The Principal Director also offered himself for investigation by any agency of the government. Anguished by the Additional Director’s act, the Principal Director said: “Since I consider my integrity as my biggest asset, in order to clear my name in the matter, I also hereby convey my willingness to undergo a polygraph test on the issue as and when it is considered appropriate by the competent authority. I have also spoken to the former DG, Income Tax (Investigation), Rajasthan, appraised him of the allegations including the allegations concerning him. He has also expressed similar sentiments and conveyed his willingness to undergo a polygraph test on the issue to clear his hard-earned reputation.” It is learnt that the matter was reported to then CBDT chief Atulesh Jindal in 2016. Subsequently, it was brought to the notice of current chief Sushil Chandra, who took over as Chairman in November 2016.