New Delhi: On a day the income-tax (I-T) department cracked down on suspected tax evaders among Commonwealth Games (CWG) contractors, the main opposition, the Bharatiya Janata Party (BJP), sought to politicize the issue by dragging the Prime Minister’s Office (PMO) into the CWG controversy.

BJP president Nitin Gadkari on Tuesday demanded a joint parliamentary committee (JPC) probe into alleged irregularities connected with the event, which was marred by charges of corruption in the award of contracts and other wrongdoing.

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“Why did the PMO or the Union cabinet not verify the reason and justification behind inflated budgets of various CWG projects before approving them? All types of increase in estimates were approved by the cabinet sub-committee and the PMO," he said.

His demand came as the I-T department conducted searches at the premises of some contractors as part of a probe to unearth alleged tax evasion in CWG-related projects. Places searched included the premises of businessman and BJP member Sudhanshu Mittal, PTI reported.

Gadkari said Congress general secretary Rahul Gandhi, along with other members of the CWG organizing committee such as Union minister Jyotiraditya Scindia, were also accountable.

So far, CWG organizing committee chairman Suresh Kalmadi has been at the receiving end of much of the criticism over alleged financial irregularities relating to CWG.

The Congress, meanwhile, hit back at the BJP, saying Gadkari was feeling threatened because many BJP leaders were now coming within the ambit of the probe. Congress spokesperson Manish Tewari also said allegations of corruption against the PMO were baseless.

The fresh political exchange comes ahead of the winter session of Parliament scheduled to begin on 9 November, when the Opposition would look to attack the government over alleged corruption in the Games. The government, for its part, is preparing to defend itself.

The BJP said it would definitely raise the issue in the winter session.

Terming the CWG a “very big scam", Gadkari said a detailed probe should be held by a JPC to “uncover the involvement of the political leadership". The party has claimed that it had sufficient documentary evidence to nail those involved in wrongdoing and that it would submit these to the committee.

“The investigations which have started are at the administrative level. And I don’t think those investigating can probe the ministry-level involvement. What is going on is an eyewash," Gadkari said.

Gadkari’s statements came in the backdrop of the I-T department kicking off its investigations into alleged irregularities in CWG contracts.

The investigation directorate of the I-T department on Tuesday conducted searches of 23 premises and surveys at seven premises across the National Capital Region centred on New Delhi, as well as Ludhiana and Chandigarh to unearth evidence relating to alleged financial irregularities by contractors involved in the CWG.

According to a statement issued by the department, the focus of the investigation will be to determine the real profits of the entities and to levy a tax, if any is required. The investigations would cover suspected over-invoicing of goods and services supplied and it would attempt to trace the real ownership of the companies investigated.

An I-T search by itself doesn’t imply any wrongdoing. A search requires a warrant that is approved by the director general of investigations, the highest ranking investigation official in the department. A search can take place only after this officer approves the “satisfaction note", which records reasons for a search to be conducted.

At the moment, four groups involved in CWG preparation are being investigated and in each case the contract value exceeds Rs100 crore.

The four groups, named in the I-T department’s statement, are a consortium of PICO International and Deepali Designs, G.L. Litmus-Meroform, Comfort Net-Nussli India and ESG Arena-D-Art Furniture. Mint couldn’t immediately access contact details of the entities to reach them for comment.

Mittal, who is a director of Deepali Designs, was linked to an independent investigation launched by the tax department into real estate entity IREO Group, said a senior tax official, who spoke on the condition of anonymity.

The tax department is investigating if IREO used laundered money through tax havens to carry out investments in India, the department said.

“Some officials from the I-T department have approached IREO for certain information and clarifications, which are being duly responded to. IREO doesn’t have any contract with the Commonwealth Games 2010. IREO remains committed to fully cooperating with the authorities, like always," a statement said.

A person who answered a call by Mint to Mittal’s mobile phone said Mittal didn’t want to talk and disconnected the call.

Meanwhile, the Enforcement Directorate (ED), which investigates violations of foreign exchange rules, has also started probing suspected CWG irregularities.

“We have zeroed in on three senior officials of the Games organizing committee and a few contractors for suspected money laundering," said an ED official, who didn’t want to be named. “We have acquired their bank details, but will soon summon them to furnish details. It is in a very preliminary stage."

ED has also registered a case under Foreign Exchange Management Act against CWG organizing committee officials in connection with Queen’s Baton Relay.

Appu Esthose Suresh of Mint and PTI contributed to this story.