New Delhi, Dec 03, 2019: The Income Tax department has issued a show cause notice to the Congress, asking the party to clarify if it has received funds to the tune of Rs 170 crore from a Hyderabad-based firm as found through its probe into a Rs 3,300-crore hawala case, news agency PTI quoted officials as saying on Tuesday, NDTV reported.
According to officials, the case reportedly came to light last month after multiple raids on "leading corporate houses" in the infrastructure sector across Delhi, Mumbai and Hyderabad. The dealings of some Congress functionaries and the Telugu Desam Party in Andhra Pradesh - which allegedly received funds to the tune of Rs 150 crore from the firm - are also being scrutinised, they said.
The show cause notice issued by tax officials on December 2 reportedly identified the company under scrutiny as Megha Infrastructure and Engineering. Congress treasurer Ahmed Patel confirmed the receipt of such a notice, and said that his party will respond to it "legally".
The Central Board of Direct Taxes (CBDT), the agency responsible for creating policy for the Income Tax department, had earlier reported raids on 42 premises across Delhi, Mumbai, Hyderabad, Erode, Pune, Agra and Goa in the first week of November. "The search action was successful in unearthing incriminating evidence 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 Rs 3,300 crore," it said in a statement.
Hawala refers to the practice of illegally transacting funds by skirting 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 particular case.
The CBDT said that 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 Rs 150 crore to a prominent person in Andhra Pradesh was also unearthed during the search. Unexplained cash amounting to Rs 4.19 crore and jewellery amounting to over Rs 3.2 crore was also seized during the search operation," it said.