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Beware, Income Tax sleuths are tapping corporate conversations

For the past 8 months, the city’s IT dept. has been tapping telephone conversations to detect and penalise tax evaders.

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MUMBAI: The latest addition to the taxman’s armour is the phone. And Mumbai’s corporate biggies and top bracket tax payers would do well to take note. For the past eight months, the city’s Income Tax department (investigations wing) has been tapping telephone conversations to detect and penalise tax evaders.

The scene of action is Scindia House, which houses the investigations wing.A K Sinha, commissioner of Income Tax (coordination), told DNA: “Since the end of 2006, the investigations wing of the I-T department has been empowered to conduct phone intercepts.

But, as in the case of the Directorate of Revenue Intelligence (DRI) and the Enforcement Directorate (ED), several checks and balances are in place to ensure there is no misuse of power. The permission of the home secretary is needed to intercept a telephone conversation.”

Tapping phone conversations is not a new practice as central government agencies such as the Intelligence Bureau, Research and Analysis Wing (RAW), DRI, ED, Customs department and even specialised cells of the police force are authorised to intercept telephonic conversations to prevent anti-national activities.

But the fact that the I-T department, which does not have the power to arrest anyone, has been permitted to listen in on phone conversations has surprised intelligence agencies in the country.

Interestingly, the I-T department got the Centre’s nod to eavesdrop on corporate calls when the controversy over the tapping of telephone conversations between Samajwadi Party leader Amar Singh and some Bollywood actors was at its height in October 2006.

A senior I-T official, however, warned, “The authority to intercept calls was given to the investigations wing for the discharge of its duties, which are of a civil nature. 

Hence, whether it amounts to invasion of citizens' privacy and, therefore, an infringement of their rights is a question that may soon be raised in legal forums."

On how phone interception has helped the department, Sinha said: "It has not been conducted on a large scale. Also, cases of search and seizure in 2006-2007 have not registered a jump as compared to the corresponding period for 2005-2006 when phones were not being tapped."

However, department officials have expressed reservations over the move. "The decision to add the phone tapping weapon to the I-T's  armoury is a step backwards and not in sync with the government's resolve to move away from the stringent powers the department already has," a senior I-T official said. When contacted, director general of the I-T department's investigation cell refused to comment on the issue, saying: "Speak to the Union government."

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