The income-tax department in Mumbai is all set to regularise the income disclosed by Indians named in the list of unreported account holders with HSBC Bank Geneva, by issuing notices under section 148 of the Income Tax Act.

A notice under Section 148 of the I-T Act is usually served when the I-T department detects income that escaped the tax net. I-T department is vested with powers to reopen assessment for the previous six years, if it has reasons to suspect that the taxpayer did not make full disclosure of his income in the returns.

Depending on the evidence in hand, it may demand additional taxes with interest and even levy a penalty for not disclosing the full income. Once the process is completed, the income is regularised.

The department will pursue a similar strategy in the case of account holders with HSBC Bank. Till now it has obtained 17 declarations from Indians having unreported income with HSBC Geneva. In some cases, the disclosures are to the tune of 300 crore.

All of these disclosures are voluntary declarations made after the I-T officials confronted the Indian account holders with the information passed on to it by the French government which in turn had got it from a former employee of the bank in Geneva in 2008.

In most cases, disclosures were made by revising the returns. The department also gave a verbal assurance that the details would not be shared with other agencies.

The I-T department maintains that the information obtained from the French government cannot be handed over to other enforcement agencies in India in view of tax treaties between countries which bar transfer of information to other agencies.

According to them, though the talks for exchange of data was initiated through diplomatic channels, information ultimately came via Double Taxation Avoidance Agreement which stipulates that data passed under the treaty should be used only for the purpose for which it was sought and not made public.

A senior I-T official told ET that the Supreme Court is now in possession of the details of Indians having accounts with Liechtenstein banks. The I-T department had submitted the data after the court sought an explanation for not making the list public.

In response, the department shared the list with the court along with a copy of a letter from the German government asking the department not to publicise the data. (Economic Times)