Much before the indictment of HSBC by a US Senate committee, the Central Board of Direct Taxes (CBDT) had sought to prosecute the bank through its representative units and branches in India, on the basis of its probe into 700 HSBC accounts of Indians abroad. The details of these were provided by the French authorities.
CBDT’s proposal, however, didn’t secure the necessary approvals from the finance ministry, around February this year.
A senior CBDT official told Business Standard while investigating the 700 accounts, the Income Tax Department had unearthed evidence that indicated complicity on the part of HSBC. “CBDT’s proposal was not allowed to go through, by raising queries not germane to the conduct of HSBC detected by the I-T department,” he added.
The official said investigations of the HSBC accounts threw up evidence of complicity of the bank and its employees in helping Indians open bank accounts and conduct transactions through these without the account holders visiting Switzerland.
The official said in certain cases, it had also been unearthed that HSBC had warned its important clients that they might receive tax notices in their respective countries from the tax authorities, as the bank’s data had been stolen by some employees and these might be passed on to the law enforcement agencies.
In some cases, he added the persons investigated produced confirmation or denials from HSBC Bank regarding existence or non-existence of accounts and also no-balance and transaction certificates in some other cases.
The official said the I-T dept had already initiated actions in many cases associated with the list of HSBC account holders and the process was on in other cases. He declined to give details.
The list of 700 Indians with HSBC accounts in Geneva was given to the government by French authorities last year, he said. The income tax department is likely to complete the process of taking due action in all these cases by the end of this year.
RBI sources said the banking regulator was looking into the matter. There is a process which the central bank has to follow in such matters.
The role of RBI will be relevant only if it is found that Indian operations of foreign banks facilitated movement of funds from India, another official said.
