Uncorrected/ Not for Publication-13.05.2015
The question was proposed.
DEPUTY CHAIRMAN: Okay. The time allotted to this is two
hours. Should we stick to two hours or reduce it to one hour?
…(Interruptions)… All right. Now, Dr. E.M.S. Natchiappan.
E.M. SUDARSANA NATCHIAPPAN (TAMIL NADU): Mr. Deputy
Chairman, Sir, I support the Black Money (Undisclosed Foreign
Income and Assets) and Imposition of Tax Bill, 2015. As our leader
has said, the Congress Party fully supports this Bill. At the same time,
we have to bring up certain deficiencies which are there to be rectified
in future amendments.
First of all, I would like to bring to the attention of the
Government that we are bound by the United Nations General
Assembly which, as early as 31st October,2003, had made that on the
basis of recalling its Resolution 55/61 of 4th December, 2000, it
established an ad hoc committee to go into the question of these
types of evasion of taxation throughout the world. It happened for
three years by having different types of meetings and finally, they
came forward with the United Nations Convention against Corruption.
I would just quote the beginning of the Preamble. I quote,
“Concerned about the seriousness of problems and threats posed by
corruption to the stability and security of societies, undermining the
institutions and values of democracy, ethical values and justice
jeopardising sustainable development and the rule of law
”. This is
where the Government has it. All the States-Parties of the Convention
have signed it. 140 countries have signed this Convention. On that
basis, different levels of discussions were going on and finally, they
came out with different topics and chapters, so to say, covering about
71 articles. In different ways, States-Parties have to follow it in their
own countries. I find that this particular Bill which is coined as the
Black Money Bill (Undisclosed Foreign Income and Assets) and
Imposition of Tax Bill is very, very fragile and it is only an extension of
Section 139 of the Income Tax Act. Section 139 is very clear in stating
that the filing of Income Tax Return is compulsory. In various cases,
they are saying that. Finally, sub-clause (3) provides that any asset
including financial interest in any entity located outside India or signing
authority in any account located outside India is required to file a
return of income in prescribed form compulsorily, whether or not he
has the income chargeable to tax. But, if you see the present Act, it
defines why this particular Act has come into force.
KR/PSV/2R/2.45
(Contd. by KR/2R)
E.M. SUDARSANA NATCHIAPPAN (CONTD.): On the basis of
the definition, we can find in clause 2 (11) “undisclosed asset located
outside India” means an asset (including financial interest in any
entity) located outside India, held by the assessee in his name or in
respect of which he is a beneficial owner, and he has no explanation
about the source of investment in such asset or the explanation given
by him is in the opinion of the Assessing Officer unsatisfactory.” This
is, more or less, expansion of section 139. If we go further, clause 4
also defines like that. Finally, we can very easily find out how the
architecture of this Bill is repeated on the basis of the Income-tax Act.
The Income-tax Act is also having the Assessing Officer. It is having
its own hierarchy of officers who go into it. If the officer has given a
verdict, then, about that, there is an appeal provision given for the Tax
Appellate Tribunal. Similarly, the Tax Appellate Tribunal is vested with
the same powers in this Bill for the violation also. Then, they can go to
the High Court, and finally they can end up in the Supreme Court.
This is the architecture on which this Bill is made. That means we are
repeating the same Act which is already there in the Income-tax Act,
and we are culling out certain portions, and defining it further, and
saying that we want to stop the black money. Actually, we are not
addressing the problem which we have promised to the people. In the
international Convention also we have shown such a position, and I
will quote from article 3 of the international Convention. “This
Convention shall apply, in accordance with its terms, to the
prevention, investigation and prosecution of corruption and to the
freezing, seizure, confiscation and return of the proceeds of offences
established in accordance with this Convention.” This is the promise
you have made. We have accepted this Convention. But now we
have not mentioned anything on the topic of prevention, investigation;
only the prosecution is there. There is nothing on the freezing, seizure,
confiscation and return of the proceeds of offences. That means, we
just want to make a white washing of our own enactments, telling that
we are very much interested in abolishing black money, and,
therefore, we are bringing a law. But really are we making that law?
We are just evading our international commitment which we made.
Similarly, Chapter II of Preventive Anti-corruption Policies and
Practices, article 5, clearly says what are the preventive measures that
you are taking in a Bill represented by the State. There they have to
make it clear in article 1, the Statement of Purposes. The purposes of
this Convention are: (a) To promote and strengthen measures to
prevent and combat corruption more efficiently and effectively; (b) To
promote, facilitate and support international cooperation and technical
assistance in the prevention of and fight against corruption, including
in asset recovery; (c) To promote integrity, accountability and proper
management of public affairs and public property.” That means we
have to come forward with a domestic legislation, covering the
preventing measures, that is, the preventive anti-corruption policies
and practices which says in article 5.1 “Each State party shall in
accordance with the fundamental principles of this legal system
develop and implement, or maintain effective, coordinated anti-
corruption policies that promote the participation of the society and
reflect the principles of the rule of law, proper management of the
public affairs and public property, integrity, transparency and
accountability.” We are not covering all these things. But we are
making some small definition here. Article 7 deals with how public
sector has to be accountable for this purpose.
KS-VNK/2S/2.50
(Continued by 2S/KS)
E. M. SUDARSANA NATCHIAPPAN (contd.): Article 8 is on
‘Codes of conduct for public officials’. Lots of explanations were
given. Article 9 is on ‘Public procurement and management of public
finances’. These are all sources of black money. These are the
sources from where this would come out. Article 10 is on ‘Public
reporting’. Let me quote, and it says, “Taking into account the need
to combat corruption, each State Party shall, in accordance with the
fundamental principles of its domestic law, take such measures as
may be necessary to enhance transparency in its public
administration, including with regard to its organization, functioning
and decision-making processes, where appropriate. Such measures
may include, inter alia:” and, then, it explains further. Article 11 is on
‘Measures relating to the judiciary and prosecution services’. Only this
has been incorporated in the Act; nothing more than that. That is
already there in the Income Tax Act. Article 12 is on ‘Private Sector’.
It says, “Each State Party shall take measures, in accordance with the
fundamental principles of its domestic law, to prevent corruption
involving the private sector, enhance accounting and auditing
standards in the private sector and, where appropriate, provide
effective, proportionate and dissuasive civil, administrative or criminal
penalties for failure to comply with such measures.” Nothing has been
addressed here on this aspect. Article 13 is on ‘Participation of
society’. Nothing is addressed here.
Article 14 is on ‘Measures to prevent money-laundering’.
Already, there is an Act, which is also fragile. Then, Chapter III is on
Criminalisation and Law Enforcement. Article 15 is on ‘Bribery of
national public officials’. Nothing is addressed here. Article 16 is on
‘Bribery of foreign public officials and officials of public international
organisations’. Nothing is addressed here. Article 17 is on
‘Embezzlement, misappropriation or other diversion of property by a
public official’. Nothing has been taken into consideration. Article 18
is on ‘Trading in influence’. Article 19 is on ‘Abuse of functions’.
Article 20 is on ‘Illicit enrichment’. Article 21 is on ‘Bribery in the private
sector’. Article 22 is on ‘Embezzlement of property in the private
sector’. Article 23 is on ‘Laundering of the proceeds of a crime’.
Nothing is addressed here. Article 24 is on ‘Concealment’. Article 25
is on ‘Obstruction of Justice’. Article 26 is on ‘Liability of Legal
Persons’. Article 27 is on ‘Participation and Attempt’. Article 28 is on
‘Knowledge, Intent and Purpose as Elements of an Offence’. Article
29 is on ‘Statute of Limitations’. Article 30 is on ‘Prosecution,
Adjudication and Sanctions’. Nothing is addressed here. Article 31 is
very, very important. It is totally missing. It goes against the wishes of
the people. Article 31 is on ‘Freezing, Seizure and Confiscation’. I will
quote a small portion of it. It says, ” 1. Each State Party shall take, to
the greatest extent possible within its domestic legal system, such
measures as may be necessary to enable confiscation of:
(a) Proceeds of crime derived from offences established in
accordance with this Convention or property the value of
which corresponds to that of such proceeds;
(b) Property, equipment or other instrumentalities used in
or destined for use in offences established in accordance
with this Convention.”
Nothing has been addressed in this Bill. We can very
conveniently say that the Money-laundering Act will apply in this case.
But it is not applicable; it has more or less been diluted. It does not
meet the requirements of criminal justice.
Article 32 is on ‘Protection of Witnesses, Experts and Victims’.
Nothing has been said here. Article 33 is on ‘Protection of Reporting
Persons’. Article 34 is on ‘Consequences of Acts of Corruption’.
Nothing has been said here. Article 35 is on ‘Compensation for
Damage’. Nothing is said here. Article 36 is on ‘Specialized
Authorities’. Our own officers become arbitrators of Income-tax.
Even when they themselves violate that particular provision, they
decide on it. Article 37 is on ‘Cooperation with law enforcement
authorities’. Article 38 is on ‘Cooperation between national
authorities’. Article 39 is on ‘Cooperation between national authorities
and the private sector’. Article 40 is on ‘Bank secrecy’. Article 41 is
on ‘Criminal record’. Article 42 is on ‘Jurisdiction’. Finally, you have
Article 43 on ‘International cooperation’. Nothing is said, except one
chapter which says that in this way you will go in for bilateral
relationships; but we are not following the international convention to
which we are the signatories. Article 44 is on ‘Extradition’. We do not
apply this provision at all. Article 45 is on ‘Transfer of Sentenced
Persons’.
-KS/RL-DS/2.55/2T
(CONTD. BY RL/2T)
E.M. SUDARSANA NATCHIAPPAN (CONTD.) : Article 46 is
about mutual legal assistance and in that way it goes on till Article 71
but none of these things like transfer of criminal proceedings, law
enforcement co-operation, joint investigation, special investigative
techniques and finally asset recovery. Article 52 says about prevention
and detection of transfers of proceeds of the crime, but nothing is said
here. Article 53 says about the measures for the direct recovery of the
property. Article 54 is about the mechanisms for recovery of the
property through international cooperation in confiscation. Article 55
is about International cooperation for purposes of confiscation. Article
56 is about special cooperation. Article 57 is about return and
disposal of assets. Finally, Chapter VI is about technical assistance
and information exchange and it goes on like that and Mechanism for
Implementation, Chapter VII, Article 67, Conference of the State
parties and convention. Now we are going to attend the conference
of the State parties. In 2015 it is going to be started. What are we
going to report it? Are we going to give this small fragile Bill before the
international body to tell that we are preventing everything, but we are
the signatories to the International Convention? Sir, I request the
Government to come forward with a new amended Bill, more so, a
comprehensive Act, to address all the provisions of the conventions.
We were the signatories as early as in 2003 when the NDA
Government was there and subsequently you have given another
chance and instead of talking something outside and doing something
inside, you can straightaway go forward with a proper convention,
with a proper domestic law and that will be a good thing to show that
India is an investment destination and you can believe us and come
here as we are following the International Convention. Thank you very
much. (Ends)
DEPUTY CHAIRMAN : Thank you, Shri Natchiappan.
