When CBI was faced with incriminating documents of bribery and corruption in high places, it simply passed the dirty job to the IT department and looked the other way. In sharp contrast is how the agency deals with ordinary citizens and human rights defenders
This morning, on January 5, newspapers reported how in a surprise and hastily passed order by the IT Settlement Commission (ITSC) the Sahara group got sudden immunity when the tax panel, the ITSC that had earlier rejected the application of the company suddenly on September 5, 2016 re-admitted it and accepted the companies claim that the seized papers are not real evidence!
The ITSC order and other incriminating documents are part of the ongoing legal effort in the Supreme Court. The evidence so easily dismissed by the ITSC (that it discusses at length in the order) includes the loose sheets and computer print-outs which form the ‘Sahara diaries’ that have alleged payoffs to over 100 politicians from more than 14 parties. This had created a political storm in mid-November when the allegations became public though much of the electronic media chose to ignore them.
A petition pressing for a Supreme Court monitored investigation on the Sahara diaries was filed by Prashant Bhushan in the Supreme Court on November 15, 2016 and the next hearing is now scheduled for January 11, 2016. There were entries suggesting payments to several influential politicians.
What is most suspicious is that the ITSC order has concurred with Sahara’s claim that the “evidentiary value” of the “loose sheets” recovered during the raids “could not be proved” by the Income Tax Department.
The real question today however is whether the ITSC has completely ignored the “Appraisal report of the Income Tax Department itself that had held to the contrary and the incriminating supporting documents. This report is dated February 27, 2014.
Volume 3 and 4 of this Appraisal report have been filed today in the Supreme Court by Common Cause. The report was prepared after detailed questioning of relevant individuals in the Birla group by the department. A quick perusal of parts of the report and the documents annexed to the report, allegedly shows offences of bribery, corruption and black money.
At page 16 of the Appraisal report, IT Department recorded the documents which were seized during the raid. Regarding Annexure A-1, IT Department has stated: “This is a handwritten notebook containing page 1-49. This contains record of certain transactions relating to receipt and payment of unaccounted cash amounts under various heads. This pertains to the period from July 2010 to March 2012. This is the most incriminating document seized during the raid.” Regarding Annexure A-2, the IT Department has stated: “This annexure is a bunch of loose papers containing pages 1 to 16. These papers contain record of several transactions which are apparently unaccounted. Page nos. 9 and 10 contain record of certain money transactions under account heads similar to account heads mentioned in Annexure A-1”.
[[Some of the sensational items recovered s during the raids were seized documents which contain a record of cash transactions from May 2013 to March 2014. The said pages were signed by the Income Tax Officer, one person from the Sahara group and two witnesses at the time of the seizure (dated November 22, 2014 along with signatures]]
Some of the relevant documents are the printouts of the three Excel sheets showing cash receipt of over Rs. 115 crore and cash outflow of over Rs. 113 crore during a short period of 10 months. While the first sheet goes up to March 4, .2014, the others relate to February 22, 2014 and even November 12, 2013, respectively. The entries in all the three sheets tally with each other. The logs suggest that cash was apparently transferred to several important public figures. The excel sheets show the date of payment, to whom money was paid, the amount paid, through whom it was paid and the place of payment. Therefore, it has been argued, that they contain enough information to initiate a thorough investigation.
Unlike the Jain Hawala case, when diaries with initials tallying with influential persons was seized, the case of Sahara stands on a much better legal footing because here there is a seizure of about Rs 137 crores in cash during the raid.
The excel sheet recovered from the computer of one Mr. Sachin Pawar of Sahara Group shows great amount of detail: date of payment, place of payment, person to whom cash is paid and the person who has delivered the case. It also shows corresponding cash received from different sources, primarily one M/s MARCOM. These could be easily further corroborated by checking for call records of the person who delivered the money and to whom it was delivered. Some noting of call records (payout sheet) made may be read here.
However, quite shockingly, the Income Tax Department under the Finance Ministry neither took any meaningful action nor forwarded the report to CBI or SIT on Black Money, as was required since incriminating documents showing corruption, bribery and black money had surfaced. It is this inaction that led petitioner Common Cause to move this Hon’ble Court in the coal scam case (WPC 463/2012) seeking a direction to CBI to investigate the documents. On October 12, 2015, the Supreme Court directed the CBI to take action in accordance with law if the documents surfaced in the raid on the Birla Group disclose offences, even though they might be unrelated to the coal block allocation cases.
Despite this order, the CBI did not investigate the matter nor register an FIR although many highly incriminating documents suggesting bribery of public servants were recovered and also analyzed by the IT dept. CBI merely transferred the whole investigation to the IT department.
After the Sahara Group approached the Settlement Commission to settle the matter, the IT Department strongly countered the company’s attempts to bury the investigation.
The IT Department had then stated:
“a) On the basis of these seized documents only the assesse firm has voluntarily surrendered income of Rs 1217 crores.
b) When Sh. Sachin Pawar was examined in respect of entries recorded by him, certain contradictions were found in his version as discussed in detail in Rule-9 report. In one statement he states that the whole exercise was done to implicate Shri Dogra and get him punished from the Management. On the other hand in a later statement he says that he intended to pass on information to various Government agencies like IT, SIT etc. When this was pointed out in 245D(4) hearing it was stated by the AR that second statement was in continuation and in addition to first one. It is obvious to us that there is a direct contradiction here – if information was to be given to IT/SIT, it would not hurt Shri Dogra but the entire Management and the Group itself. Also it is correctly pointed out by PCIT that SIT did not even exist at that point of time.
c) Perusal of transactions recorded in the seized documents shows that they have been recorded in a detailed manner with specific amounts and names of persons/premises – something that appears to be true. Also, it is observed that so-called ‘meaningless’ transactions have been recorded on a regular basis over a period of 4-5 years – contention that it is only for the sake of implicating Shri V S Dogra – seems to be unbelievable.
Further, on comparison of the entries of cash receipts as recorded in the seized documents with the entries in the ledger account of cash imprest given to Shri Sachin Pawar from MARCOM, it is observed that all the entries of cash imprest above Rs. 1 crore appearing in the books of Sahara India (MARCOM) in the ledger account of
Shri Sachin Pawar have been recorded by Shri Sachin Pawar in the seized documents on the same dates- strongly suggesting thereby that entries made were not fictitious and cannot be called meaningless.”
Despite these strong contentions, the Settlement Commission, settled the case on November 11, 2016 and absolved Sahara of all criminal and civil liability on specious grounds.
Prashant Bhushan for Common Cause had sent them a letter on November 8, 2016 requesting them not to allow any settlement in the matter.
Settlement Commission Order may be read here
It is not only the Enforcement Directorate (ED) but the Financial Intelligence Unit (FIU) under the Ministry of Finance that had found large number of suspicious cash transactions on a very large number of accounts linked with the Sahara Group. A list of as many as 4574 bank accounts was prepared showing such transactions.
Issues of transparency and accountability have also been raised by the disclosure of the fact that the GOI under Narendra Modi, on November 14, 2014 appointed by formal order K.V. Chowdury to the position Advisor to the SIT on Black Money, after demitting office as Chairperson, CBDT. Chowdury was given the supervisory charge on the subjects being handled by Member (Investigation), CBDT including investigations and subsequent actions. This is the relevant period when the raid on Sahara Group took place and the subsequent investigation was conducted by the IT Department. The office order appointing Chowdury may be read here.
Occupying this critical post as advisor to the SIT on black money, it was the duty of Chowdury to ensure that a credible criminal investigation was initiated by the relevant agency when incriminating documents of the Sahara Group surfaced showing offences of bribery and corruption being committed after the raid on November 22, 2014, especially since it is clear that the above documents disclosed the bribing of several influential persons by the Sahara Group.
All the information ought to have been shared by the IT Department with the CBI & the SIT on Black Money, since the matter under the SIT’s jurisdiction was not limited to Income Tax violations, but included bribery, corruption and possession of black money. The persons named in the diary ought to have been investigated, but it was not done.
Background
It was during the investigations with relation to coal block allocations to Hindalco Industries, an Aditya Birla group company, that the CBI conducted simultaneous search operations in four cities – New Delhi, Mumbai, Secunderabad and Bhubaneshwar on 15.10.2013. The documents seized by the CBI in its search operation reportedly revealed massive bribery of politicians and officials of various ministries by the Aditya Birla group over several years. The simultaneous search operation conducted on October 15, 2013 by the CBI at the Aditya Birla group’s office at Parliament Street, New Delhi, reportedly led to the recovery of incriminating documents and a huge stash of unaccounted cash amounting to Rs. 25 crore. Although the documents seized indicated the commission of offences of corruption, bribery, possession of black money, and also of income tax violations, the CBI, instead of conducting a thorough scrutiny of their contents, simply transferred the highly incriminating documents to the Income Tax Department.
It is clear that ordinary citizens, human rights activists remain at the aim of fire of the CBI and India’s agencies while powerful men and women in power and corporations simply get away.