The income tax department has raided a “leading” Chandigarh-based lawyer on charges of alleged tax evasion and receiving at least Rs 217 crore “in cash”, tax officials said on 15 October.
They said the department raided 38 premises linked to the lawyer in Haryana, Delhi and the national capital region on Wednesday, they said.
Cash amounting to Rs 5.5 crore has been seized from different locations linked to the lawyer during the searches. He practices mostly in the field of commercial arbitration and alternate dispute resolution, the Central Board of Direct Taxes (CBDT) said in a statement.
The board did not identify the lawyer, but sources in the department said it was Manoj K Singh, the founder of Singh & Associates.
Ten bank lockers have been put under restraint, the department said. “The lawyer was suspected to be receiving substantial amounts in cash from his clients to settle their disputes. Incriminating documents of unaccounted cash transactions and investments made by the assessee over several years have been found,” the department said.
The CBDT, which frames policy for the tax department, alleged that the lawyer in one case “had received Rs 117 crore from a client in cash, whereas he had shown only Rs 21 crore in his records, which was received through cheque”.
In another case, the advocate received more than Rs 100 crore in cash from an infrastructure and engineering company for its arbitration proceedings with a public sector company, the CBDT claimed.
“The unaccounted cash received has been invested by the assessee in purchase of residential and commercial properties and in taking over of trusts engaged in running of schools. Evidences recovered indicate investment of more than Rs 100 crore in cash in several properties in posh areas in the last two years,” it said.
The assessee and his associates have also purchased several schools and properties, for which more than Rs 100 crore was “paid in cash”, it said.
The lawyer has also taken accommodation entries (hawala funds) worth several crores, it said.
The board said the search teams have also recovered “substantial digital data reflecting unaccounted transactions of the assessee and his associates who are financiers and builders”.
Antecedents of the lawyer
The tax department alleged in its statement that the “unaccounted cash received, has been invested by the assessee in (the) purchase of residential and commercial properties and in taking over of trusts engaged in running of schools”, adding: “Evidences (sic) recovered indicate an investment of more than Rs. 100 crore in cash in several properties in posh areas in the last two years. The assessee and his associates have also purchased several schools and properties, for which also more than Rs. 100 crore was paid in cash. He has also taken accommodation entries worth several crores.”
Singh is not the first law firm founder to have faced raids from the taxman. In 2016, T&T Law founder Rohit Tandon declared Rs 125 crore to the tax department after a raid.
And in 2019, prior to the arrest of OP Khaitan & Co managing partner Gautam Khaitan for alleged involvement in the AgustaWestland chopper scam, he had been raided by the tax department.