Probe contracts given to Infosys by ex-Revenue Secretary AB Pandey: Ex-IT Chief Commissioner in letter to PM

Former Income Tax Chief Commissioner DP Kar has written to Prime Minister Narendra Modi demanding an investigation into deals and tenders handled by the recently-retired Revenue Secretary AB Pandey.

In a six-page letter dated July 7, Kar has accused Pandey of corruption by alleging that the latter granted several government contracts worth Rs 10,000 crore to Infosys without issuing tenders, violating General Financial Rules.

Kar has alleged that Pandey is a shareholder of Infosys along with his wife and has worked closely with Infosys chairman Nandan Nilekani since his stint with the Aadhaar Project at Unique Identification Authority of India (UIAI) and then at Niti Aayog. Nilekani was the chairperson of the Unique Identification Authority of India, while Pandey was the chief executive officer of the same organisation.

Pandey is a 1984 Indian Administrative Service officer, who retired in February 2021.

In the letter, Kar alleged that Pandey awarded the contract for Rs 4,242 crore for creating a new Income Tax portal when one already existed by abusing the authority of Rule 184 of the General Financial Rules, 2005. Pandey had also given the contract for GST portal worth Rs 1,380 cr.

In the letter, Kar, who is a 1973 batch officer of the Indian Revenue Service, alleged that Pandey embezzled around Rs 10,000 crore in collusion with Infosys Chairman Nandan Nilekani.

Kar is currently the president of Odisha Nagrik Manch and was a former state president of Vishwa Hindu Parishad.

The GFR, 2005, which controls and regulates expenditure of the government, mandates that no spending by the government is to be incurred expect through the tender process and only in extreme cases can such an expenditure be incurred without tendering by nomination after the department secretary notes in the file the reasons for doing away with the tender process.

In such cases, the competent authority in the concerned ministry can do so in consultation with the financial advisor and the reason for doing so should form a part of the proposal.

“The government will hopefully look into issues spelled out in the letter. I am hoping action will be taken because Rs 4,500 crore was spent on the Income Tax portal which was not required. The existing portals were functioning smoothly. If there was a need for a web portal, why wasn’t a tender floated?” Kar told National Herald. He added that he had written another letter too, but did not want to elaborate on its contents.

“These contracts for websites were granted in an opaque and conspiratorial manner, without transparency and the execution of which turned out be faulty and sub-standard. Now tax-payers and tax-professionals around the country are suffering despite such a huge expenditure from the government,” wrote Kar in his letter.

Kar alleged that Pandey also operated through a “benami” named Ravi Prakash, who was also paid a substantial amount of money in the guise of professional fees as advocate in the Goods and Service Tax Network (GSTN) case after the Modi government enacted GSTN in 2015. This was during Pandey’s tenure of heading the GSTN company as Revenue Secretary.

“Pandey, through Prakash, had allegedly taken a bribe of Rs 200 crore in the name of removal of IRS offices from government service, a bribe of Rs 4,400 in the bike bot scam in Noida, Uttar Pradesh, and a huge bribe in the Muzaffarpur Shelter Home Abuse case by getting the investigation in the money trail in the case ordered by the Supreme Court hushed up,” Kar alleged in his letter.

The Enforcement Directorate had registered a case of money laundering against the Greater Noida-based Bike Bot taxi service, which is accused of duping over 2.25 lakh investors in multiple states including Uttar Pradesh, Madhya Pradesh, Rajasthan and Haryana of Rs 4,000 crore. This was a ponzi scheme which lured investors and paid profits to earlier investors with funds from recent investors.

In 2013, the government had created a not-for-profit, non-government, private limited company called GST Network to provide the web interface to connect the databases of the state, Union government and other bodies such as the Reserve Bank of India. The Central government holds 24.5% equity in the company and all states, including Delhi and Puducherry, and the Empowered Committee of state finance ministers together hold another 24.5%. The remaining 51% equity is with non-government financial institutions.

National Herald attempted to reach AB Pandey for his comments, but calls made to him went unanswered. This story will be updated as and when Pandey responds.

Contracts awarded to Infosys

Infosys was awarded a contract worth Rs 1,380 crore in 2015 to build and maintain the network crucial for implementing the proposed goods and services tax (GST) system across the country for five years.

In March 2020, the government had called Nilekani to make a presentation before the GST Council as the IT company had repeatedly failed to fix glitches in the GSTN Network, the technology backbone for the indirect tax. The government was also forced to postpone the filing of returns as they were unable to address the issues, which included login errors, auto logouts, slowdown on platform and delay in getting passwords.

Vidhi Centre for Legal Policy, a private think tank, was on the list of those who created the controversial COVID-19 contact-tracing app ‘Aarogya Setu’. Rohini Nilekani, the wife of Nandan Nilekani, is one the chief patrons of Vidhi.

In 2019, Infosys was awarded the contract to develop a new income tax filing system to reduce the processing time for the returns to one day from 63 days. However, as soon as it went live on June 7, 2021, it has been riddled with glitches. Finance Minister Nirmala Sitharaman asked Nilekani in a tweet “to not let taxpayers down”. However, a month later, the process still has not been made easy for the users.