NRI offshore bank accounts to be investigated by tax authorities

INTERESswisslandNRIs with offshore bank accounts cannot now keep the taxman away by getting relief from the court of law. In such cases, to prove innocence, NRIs will have to brief the overseas banks to share information on the accounts with the Indian tax office. One can escape tax officials only after receiving confirmation from the bank, stating that the money in the account belongs to the respective person.

The Bombay High Court recently refused a writ petition filed by an NRI supposed beneficiary of a trust linked to an account with HSBC Geneva, after she declined to sign the ‘consent waiver’ which lets HSBC share information on the account. The court stated ‘In the normal course, if a person has nothing to hide and allegations or questions are being raised, a person would make available the documents that would put to rest all questions in the minds of the authorities.

The French government for example has shared with Delhi petitioner Soignee R Kothari, as well as 6 other individuals and 2 trusts, that are beneficiaries of an account held by White Cedar Investments with HSBS Geneva. As of 2006 the account held over $44 million. The department had served Ms Kothari a note to reopen assessment for the year 2006-07. She later agreed to sign the documents with a modification as a beneficiary rather than as holder or beneficiary of the Geneva HSBC account.

The court said that the bank statement it obtained from HSBC Geneva ‘would reveal or give clues as to the source of amounts deposited in the relevant account. It further added that ‘if a person has nothing to hide, they believe the person would have cooperated in obtaining bank statements’.