Overseas black money cases: India not to invoke confidentiality clause

New Delhi: In order to speed up the process of obtaining overseas information against Indians holding black money abroad, the CBDT has asked the taxman to refrain from invoking a specific clause of not informing an individual against whom the information is being sought from the counterpart country.



The clause called "refrainment from prior notification" entails Indian agencies to notify in their request that the individual against whom they are seeking information from their foreign counterpart should not be told about it.

The CBDT, in a latest order accessed by PTI, has reasoned for issuing the new decision: "Whenever a request for refrainment from notification is made, it automatically implies that information which is in possession of the taxpayer cannot be obtained and provided by the foreign tax authorities.

"Thus, in many cases, foreign tax authorities are expressing their inability to provide the information when it has to be obtained from the taxpayer due to the refrainment from notification condition set out in our requests."

The Board instructed further that "therefore, request for refrainment from prior notification may be made only in exceptional circumstances and not as a matter of routine."

It added that when such requests are made they should be backed by "evidences" and proper "explanations".

The policy-making body of the tax department, the Central Board of Direct Taxes, said in case the 'refrainment from prior notification' has to be implemented "sufficient explanation/justification may be furnished to demonstrate the necessity of refrainment of prior notification."

As per global exchange of tax information norms, a requesting state or country can invoke the said confidentiality clause if it can "demonstrate through some specific evidence that the request for information is either very urgent or prior notification to the taxpayer or individual under probe could hamper investigation against them."

Officials said CBDT issued the directions in wake of a number of overseas probes to be taken up in the near future including British Virgin Islands and other tax haven nations.

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Updated Date: May 17, 2016 22:52:09 IST