Pune stud farm owner and scrap dealer Hasan Ali Khan owes the income tax department Rs1.65 lakh crore – a staggering debt that is the largest recovery amount case in Indian tax history and also one that authorities seem to have given up hope of recovering.
The 16th report of the Standing Committee of Finance presented before the Lok Sabha on July 31 acknowledges that Hasan Ali owes Rs1,65,665 crore as tax arrears. This is more than three times owed by share market scamsters – Harshad Mehta, Ketan Parikh and BC Dalal – who together have tax arrears of Rs40,986 crore. The four, whose cases are pending in different courts, together owe over Rs 2 lakh crore.
Alarmed by the rapid rise in tax arrears, the Standing Committee has observed in its report that "recovery on these cases by operation of income tax alone is not possible". Besides, even assets of these scamsters do not tally with what they owe the tax department, the committee argued while finding out ways to recover this huge amount.
The Supreme Court appointed special investigation team (SIT) on black money headed by retired Justice MB Shah is looking into the unaccounted money of Hasan Ali, who got bail from the Mumbai High Court last week.
Though his was the only name mentioned in the 'terms of references' when the Supreme Court constituted the SIT in 2011, the income tax department has put his arrears into the 'difficult to recover' category now.
His tax liabilities amount to 25 percent of the total direct tax arrears of Rs.6.74 lakh crore.
The income tax department had raised a demand of Rs.70,000 crore against the Hasan Ali group in 2007 on the basis of three transactions with UBS bank. Subsequently, the tax department discovered more money transactions. The tax arrears have now increased more than double.
There would have been no cuts in education and health budget if the tax department could recover the pending arrears, experts say. "There will be no need to even divest public owned companies, through which the government aims to raise Rs.69,500 crore in 2015-2016,'' a senior government official said.
Almost 80 percent of tax arrears are stuck in court cases, he added.
Hasan Ali, the son of an excise official, made headlines in December 2006 when the Mumbai income tax investigation wing raided his premises in Kolkata and elsewhere on suspicion of a huge money laundering racket. Six investigating agencies, including Enforcement Directorate (ED), have been struggling to establish money laundering case against Hasan Ali but not a single penny has been recovered from abroad so far.
