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Unauthorised disclosure of black money accounts will affect probe: Arun Jaitley

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Taking Congress head on for criticizing the government's efforts to bring back the black money stashed abroad, finance minister Arun Jaitley on Sunday emphasised that any reckless act on the matter could thwart the entire initiative. Jaitley stressed that any disclosure made beyond the ambit of the tax treaties stands the risk of turning the reciprocating country hostile and giving the violator a window to wriggle out of the investigation via 'sham defence'. In a way, Jaitley has also put the ball back in judiciary's court, which had been demanding full disclosure of the names.

Meanwhile, prime minister Narendra Modi reiterated his commitment to the black money issue in 'Man ki Baat' addressed to the nation on Sunday. "Efforts to bring back black money is on the right track," said Modi. The BJP led NDA government had been in a spot as the opposition, too, claimed the government was going back on the electoral promise of bringing back the black money. Taking a dig on Congress's stand, Jaitley said it was 'understandable' as the party would not want 'evidence to be forthcoming in support of the names available with the SIT'.

Explaining the stand, Jaitley said the confidentiality clause in the Double Taxation Avoidance Agreement (DTAA) need to be respected and the government is not in position to disclose as the treaties warrant disclose only after a prosecution is filed. Jaitley said, "The confidentiality clauses make it incumbent that disclosure would be made only after prosecution is filed before a charging court. Thus the issue is not whether but when disclosure can be made. The debate is not between disclosure and non-disclosure of confidential information. It is between unauthorised disclosure in violation of tax treaties and disclosure as per tax treaties." The DTAA between India and Germany was signed in June 1995, when Congress was ruling the country.

"An unauthorised disclosure in violation of tax treaties entails that the disclosure is made for collateral purposes. It is usually not accompanied by any evidence or proof. But when a disclosure is made in pursuance of a charge sheet in a court of law where a criminal prosecution is filed, it would certainly be a disclosure substantiated by adequate proof and evidence," he added.

This leeway would only end up helping the holders of the unauthorised accounts. "A disclosure in violation of tax treaties helps the account holder. The reciprocating state would treat this as a violation of a tax treaty and refuse to provide any evidence in support of the unauthorised account. The holder of the unauthorised account in the absence of any proof and confirmation from the reciprocating State would get the benefit in any investigation or prosecution and then claim that 'I stand vindicated'. In fact, a premature disclosure would additionally alert the account holder to prepare some documentation or a sham defence. It may even enable him to destroy evidence," he added.

"An unauthorised disclosure of information is fraught with both investigation and economic consequences. They can sabotage the investigation. They can attract sanctions in the form of withholding taxes….. A disclosure without evidence would ensure that evidence is never available….It (The Government) will continue to support the SIT fully and unequivocally in search of truth.," Jaitley said. The head of the SIT probing black money, Justice M B Shah is hopeful of bringing back the black money, but that will require co-operation from Swiss banks.

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