In an important twist in the ongoing case against alleged hawala dealer Hassan Ali Khan, Attorney General Goolam E Vahanvati has cautioned the government against proceeding against United Bank of Switzerland (UBS AG) under the Income Tax Act without “adequate material”.
In his legal opinion, the government’s top law officer has said that before launching prosecution proceedings against the bank for allegedly helping Khan in filing false I-T returns and falsification of books of accounts “factual aspects need to be resolved”.
“At the outset, it needs to be stated that this would be an important prosecution where huge sums of money are said to be stashed abroad. Therefore, every care must be taken to see that there is adequate material on the basis of which prosecution is launched so that the prosecution succeeds,” Vahanvati’s opinion reads.
The government had sought Vahanvati’s opinion on the question whether prosecution under Sections 277A and 278 of the Income Tax Act, 1961 could be launched against UBS AG on the basis of evidence gathered about their role in abetting Khan’s alleged offences.
Khan is in jail for various offences, including money laundering, and his bail applications have been rejected many times, including by the Supreme Court.
Talking about the plan to prosecute Khan under Section 277A of IT Act, which deals with punishment for an individual or organisation for making a false statement or providing false information in any verification under the Act, Vahanvati has said that in order to attract the offence under Section 277A against UBS AG, it must be shown that an official of UBS made a false entry or statement in any book of account or other document relevant to any proceedings against Khan or his associates so as to enable Khan to evade tax, interest or penalty.
“The responses from UBS AG have to be analyzed in context of these legal requirements. It needs to be seen whether false entries or statements were made, knowing them to be false or believed to be untrue and that this was done wilfully to enable Hassan Ali Khan to evade tax, interest or penalty,” he has said.
About the bank’s role in the entire case against Khan, the AG has said, “The main question is whether the evidence collected by the Indian authorities falsifies the stand of UBS AG and whether UBS AG has made any false entries or statements wilfully and with an intent to enable Hassan Ali Khan to evade any tax or penalty. Another important issue is whether the documents establish the existence of a particular account number which belongs to Mr Hassan Ali Khan, but has not been disclosed by UBS AG.”