The elite criminal investigation wing of the Income Tax department, which conducted a number of high-profile actions including raids on liquor baron Ponty Chadha, has been disallowed to carry out any search or seizure operations by the Finance Ministry henceforth.
The just over-an-year old wing called the Directorate of Criminal Investigation (DCI), created in May 2011 to combat the menace of black money and develop cases of illegal funds of “criminal nature”, will now only work to develop a robust database of financial information and aid the regular investigation wings of the I-T to undertake “specific and result-oriented” search and survey operations.
“The DCI, henceforth, will not undertake operations which they did under section 132 of the I-T Act (search and seizure). It will now be an intelligence gathering, analysis and dissemination wing of the I-T department,” top sources privy to the development said.
The wing, however, can carry out some on-spot verification if the need arises, they said. Sources said the Central Board of Direct Taxes (CBDT) has recently ordered the wing, based in the national capital, to study mounds of electronic data generated by economic intelligence agencies like the Financial Intelligence Unit (FIU), Central Economic Intelligence Bureau (CEIB) and those sent by the Intelligence Bureau and Enforcement Directorate (ED), and supply it to the regular probe units of the I-T spread across the country who will undertake action like raids and seizure of cash and other valuables.
The DCI had undertaken action on 128 search warrants during 2011-12. It executed eight search warrants in 2012-13 (upto September, 2012) which included the high-profile search on liquor baron Ponty Chadha, killed recently in a shootout at his farmhouse, in February this year.
The searches were mired in controversy and according to sources, the Finance Ministry was mulling changing the operational procedures of this wing since then.
DCI had also conducted survey operations on various IPL franchises earlier this year.
“Finance Minister P. Chidambaram had a few meetings with the top brass of the CBDT and the I-T department and instructed that the DCI should supplement to the I-T department’s enforcement wings by way of giving them good cases to work upon and not rather duplicate the work by being on field themselves,” sources said.
The CBDT has also formulated a new plan for the DCI which envisages inducting only those officials in this elite wing who have a bent of mind in not only technical analysis but also in creating a pool of human intelligence operatives.
“The DCI will also study and prepare trends of economic crimes in the country which would include detection and analysis of any terror funds in country’s economic channels,” they said.
The I-T department has 14 regular directorates of investigation in the country which undertake search and seizure operations to check and curb tax evasion.
The DCI, according to the official notification of the Finance Ministry of May 30, 2011 was created to “seek and collect information about persons and transactions suspected to be involved in criminal activities having cross-border, inter-state or international ramifications, that pose a threat to national security and are punishable under the direct tax laws and to investigate the source and use of funds involved in such criminal activities.”
Apart from the headquarters and a field office in Delhi the DCI has seven other offices in cities like Chandigarh, Jaipur, Ahmedabad, Mumbai, Chennai, Kolkata and Lucknow.
Creation of the DCI was one amongst the five-pronged strategies that the government initiated to tackle black money last year.
The other initiatives included joining global crusade against black money (by way of signing treaties), creating an appropriate legislative framework, developing systems for implementation (of these laws), and imparting skills to the manpower for effective action.
