Hawala probe: IT dept issues notice to Congress for receiving ₹170 cr funds

The Income Tax Department has issued a notice to the Congress seeking an explanation over the party allegedly receiving funds amounting to ₹170 crore from a company as part of its tax evasion probe in a mega ₹3,300 crore hawala racket case, officials said on Tuesday (December 3).

They said that the notice has been issued to the party to take the probe forward in a case that was unearthed last month after multiple raids were conducted in Delhi, Mumbai and Hyderabad with links to “leading corporate houses” in the infrastructure sector.

According to officials, the funds to the Congress were sent by Hyderabad-based Megha Infrastructure and Engineering. Some functionaries of the Congress and an Andhra Pradesh-based political party are also under the scanner of the taxman in this case, they said.

The Central Board of Direct Taxes (CBDT), which makes policy for the Income Tax (IT) Department, had said in a statement in November that the raids to unearth the large tax evasion nexus were conducted in the first week of the month.

The raids were conducted on 42 premises in Delhi, Mumbai, Hyderabad, Erode, Pune, Agra and Goa on a group of people issuing bogus bills and conducting hawala transactions, the statement had said.

“The search action was successful in unearthing incriminating evidences and establishing the nexus between big corporates, hawala operators and identification of entire chain of delivery, as well as siphoning of funds by way of bogus contracts to the tune of ₹3,300 crore,” the CBDT had said.

The raids resulted in busting of a “major racket of cash generation” by leading corporate houses in the infrastructure sector through bogus contracts and bills, it added.

Hawala denotes illegal transaction of funds by skirting the legal banking channels.

According to the CBDT, funds meant for public infrastructure projects were siphoned off through entry operators, lobbyists and hawala dealers in this case. The companies involved in siphoning of funds were said to be mostly located in the National Capital Region and Mumbai.

“The projects involved in bogus billing are major infrastructure and EWS (economically weaker section) projects located in south India. “Evidence of cash payment of more than ₹150 crore to a prominent person in Andhra Pradesh has also been unearthed during the search,” the CBDT had said.

“Unexplained cash of ₹4.19 crore and jewellery worth in excess of ₹3.2 crore was also seized during the search operation,” it had said.