Terror and Tax Evasion

A news item says that the Income Tax Department, Delhi conducted raids at half a dozen places of a prominent Delhi/Srinagar based organisation on suspicion of tax evasion with terror links. This very prominent and powerful group, thus unnamed so far, was found to be involved in large scale tax evasion and money laundering, with alleged links to terror funding, which are being investigated. This big ticket tax evader was found to have large investments and operations in hotels, tourism and quarrying, of which incriminating evidence was found of huge undisclosed income, as well as expenditure. The interesting part is that despite such a large base, the group filed no income tax returns, evidently meaning that the group prospered and proliferated over the years, by adopting a conscious strategy of operating below the radar. This search recalls of an income tax raid in Mumbai, a few years ago, on a very small office situated in a communaly sensitive area, which was found to be running a huge hawala racket of cash deals of over Rs.60000 crores, fearlessly operating with impunity, in the heart of Mumbai, not far from the Income tax Office. Its perpetrators too had direct links with the underworld and a suspected terror nexus too.


These kinds of large scale illegal criminal activities, which stare in your face, but are yet not spotted by the government departments for decades, are an eye opener of sorts. It is an aberration in India’s formidable and comprehensive legal and administrative system. The fact is that India is a very well regulated, rather over regulated economy and nation. It has a tight and comprehensive plethora of laws to prevent any crime, particularly those like tax evasion, hawala and terror funding. These laws are supported by a formidable and robust infrastructure and administrative machinery, which reaches in every nook and corner of the nation. Our criminal and revenue/banking departments have very advanced and extensive surveillance infrastructure to gather evidence and information on a real time basis, which makes it difficult for a tax/economic crime to continue and grow big for years, unless it was given some kind of illegal official patronage and shelter.


The Income Tax Department for example gets information about every transaction related to registration of real estate transactions, foreign exchange remittances, investments in stock markets, mutual funds, undisclosed overseas transactions, hidden bank accounts etc. on a real time basis. It is thus very difficult for a large and prominent tax evader, which does not even file its tax returns to go unnoticed, unless someone in the government chose to let it remain hidden. The reality is that such organisations have their patrons in the system, which let them conduct their dubious activities, obviously benefitting by giving such shelter. How can large illegal cashflows, with footprints in the banking system, otherwise go unnoticed and unreported. It is their political/bureaucratic patrons who are the real crooks and need to be punished first, alongwith these dangerous tax evaders and hawala operators.


Apart from the news of these raids by the Delhi ITD, comes the news that the ED plans to seize known assets of over Rs.50 crores of the controversial Islamic preacher Zakir Naik, who freely made inflammatory speeches, fled India and this fugitive has been given shelter by his masters in Malaysia. He too built a large criminal empire, with illegal foreign inflow of funds of large volumes. It is a shame that such anti national criminal persons were allowed to build empires, as we see in the case of Zakir Naik and shockingly even in the case of Hafeez Saeed, an enemy, the LeT leader behind the 26/11 Mumbai attacks, who is found to have over a dozen properties in J&K.


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