Black ele­phant

What has the Supreme Court man­dated SIT on black money done for four years? The pub­lic has the right to know.

Gfiles - - GOVERNANCE - The writer is for­mer Chair­man, CBDT

Abit­ter crit­i­cism of the UPA Gov­ern­ment be­fore it lost the elec­tions in 2014 was its fail­ure to check the con­tin­u­ing growth of black money in the coun­try. The com­mon per­cep­tion was that noth­ing much could be ex­pected from the Gov­ern­ment as the UPA peo­ple were them­selves deeply en­trenched in it. The said Gov­ern­ment even bla­tantly dis­re­garded the Supreme Court’s di­rec­tions for set­ting up of a Spe­cial In­ves­ti­ga­tion Team (SIT) for mak­ing en­quiries re­gard­ing black money. To elu­ci­date the last ob­ser­va­tion, some his­tor­i­cal facts need to be men­tioned to com­plete the back­ground. Se­nior Ad­vo­cate Ram Jeth­malani had filed a writ pe­ti­tion in the Supreme Court, in­ter-alia, on the is­sue of black money. In dis­pos­ing of the writ pe­ti­tion, the court or­dered the con­sti­tu­tion of SIT, which was re­quired to make en­quiries, in­ter-alia, on the terms of ref­er­ence as stip­u­lated in the apex court’s or­der, The SIT, as per SC’s di­rec­tions, was to com­prise of two re­tired judges of the Supreme Court, one as Chair­man and the other as ViceChair­man. The two re­tired judges of the SC were to get all the perks, pay and al­lowances of a sit­ting judge of the SC. The Chair­man and Vice-Chair­man of SIT were to be as­sisted by 13 part-time mem­bers com­pris­ing of very se­nior of­fi­cers of the GOI, like Chair­man, CBDT, Di­rec­tor, CBI, Di­rec­tor, En­force­ment Direc­torate, Di­rec­tor (IB), Dy. Gover­nor, RBI, Di­rec­tor, RAW and other of­fi­cers of the sim­i­lar se­nior­ity and ex­pe­ri­ence. The func­tion­ing of the SIT and the terms of ref­er­ence for the SIT, as laid down by the SC in Jeth­malani’s case, were: [i] The SIT shall func­tion un­der the

guid­ance and di­rec­tion of Chair­man and Vice-Chair­man. [ii] The said SIT shall be charged with the re­spon­si­bil­i­ties and du­ties of in­ves­ti­ga­tion, ini­ti­a­tion of pro­ceed­ings, and prose­cu­tion whether in the con­text of ap­pro­pri­ate crim­i­nal or civil pro­ceed­ings of – [a] all is­sues re­lat­ing to the mat­ters con­cern­ing and aris­ing from un­ac­counted monies of Has­san Ali Khan and the Ta­purias; [b] all other in­ves­ti­ga­tions al­ready com­menced and are pend­ing or await­ing to be ini­ti­ated with re­spect to any other known in­stances of the stash­ing of un­ac­counted monies in for­eign bank ac­counts by In­di­ans or other en­ti­ties op­er­at­ing in In­dia; and [c] all other mat­ters with re­spect to un­ac­counted monies be­ing stashed in for­eign banks by In­di­ans or other en­ti­ties op­er­at­ing in In­dia that may arise in the course of such in­ves­ti­ga­tions and pro­ceed­ings. [iii] It was also the re­spon­si­bil­ity of SIT to en­sure that the mat­ters are also in­ves­ti­gated, pro­ceed­ings ini­ti­ated and pros­e­cu­tions con­ducted with re­gard to crim­i­nal­ity and/or un­law­ful­ness of ac­tiv­i­ties that may have been the source for such monies, as well as the crim­i­nal and/or un­law­ful means that are used to take such un­ac­counted monies out of and/or bring such monies back into the coun­try and use of such monies in In­dia or abroad. [iv] The SIT shall also be charged with the re­spon­si­bil­ity of pre­par­ing a com­pre­hen­sive ac­tion plan, in­clud­ing the cre­ation of nec­es­sary in­sti­tu­tional struc­tures that can en­able and strengthen the coun­try’s bat­tle against gen­er­a­tion of un­ac­counted monies and stash­ing away in for­eign banks or in var­i­ous forms do­mes­ti­cally. Th­ese or­ders, to my rec­ol­lec­tion, were passed on July 4, 2011 by the apex court, but the UPA Gov­ern­ment till it was in power up to May 2014, did not take any ac­tion on the same. It is a sur­prise that the SC too did not ini­ti­ate any ac­tion against the Gov­ern­ment for non-com­pli­ance of its or­ders. Be that as it may, the NDA Gov­ern­ment to demon­strate its se­ri­ous con­cern for black money passed an or­der for the con­sti­tu­tion of the SIT the day af­ter as­sum­ing of­fice. The con­sti­tu­tion of the SIT was the same as stated in Jeth­malani’s de­ci­sion i.e. two re­tired SC Judges as the Chair­man and Vice-Chair­man with 13 se­nior Gov­ern­ment func­tionar­ies as men­tioned ear­lier as mem­bers. The SIT di­rectly works un­der the su­per­vi­sion and guid­ance of SC and re­ports di­rectly to it and there­fore, there is noth­ing in pub­lic do­main about its work­ing and to know as to what the SIT, who too has com­pleted four years by now, has achieved since its con­sti­tu­tion. The SC also has not made any dis­clo­sure about the SIT’s func­tion­ing and its achieve­ments.

IT is in­deed a unique de­vel­op­ment in the his­tory of in­come tax jurisprudence of the coun­try: An SIT, com­pris­ing of two se­nior (re­tired) SC judges with 13 top of­fi­cers of the in­ves­ti­gat­ing agen­cies was asked to mon­i­tor, in­ter-alia, cases of in­di­vid­ual tax­pay­ers like Hasan Ali and Ta­purias un­der the su­per­vi­sion of the apex court of the coun­try and guide other in­ves­ti­ga­tions in re­spect of “other in­stances of the stash­ing of un­ac­counted money in for­eign bank ac­counts by In­di­ans or other en­ti­ties op­er­at­ing in In­dia”. It is, how­ever, greatly dis­heart­en­ing to find that four years have passed since the SIT was con­sti­tuted but noth­ing has come to pub­lic knowl­edge as to what has been achieved by the SIT, to what ex­tent has the flow of black money slowed down/ stopped, what has been the gain in terms of rev­enue to the Gov­ern­ment by the SIT’s func­tion­ing and how much more time it will take to wind up its af­fairs? Since the SIT is func­tion­ing at the cost of the tax­pay­ers’ funds, con­trib­uted to the Gov­ern­ment from their hard-earned money by way of taxes, it begs the ques­tion whether the earn­ings have been com­men­su­rate with the cost on SIT. Hence, there is ur­gent need to dis­close what has been the out­come of the sac­ri­fices by the tax­pay­ers. The Gov­ern­ment can­not be blamed for in­ac­tion in the mat­ter as it has no con­trol over the SIT’s func­tion­ing, which is work­ing un­der the di­rect su­per­vi­sion and con­trol of the SC. Hence, the court is most re­spect­fully re­quested to di­rect the SIT to place in pub­lic do­main its achieve­ments or find­ings over four years. There seems to be no grounds not to dis­close such in­for­ma­tion in the in­ter­est of trans­parency and pub­lic de­bate. The court may also like to review the work­ing of the SIT to take a de­ci­sion whether it is still needed for the work left un­ac­com­plished af­ter four years and whether the same can­not be as­signed to the In­come Tax Depart­ment for fur­ther fol­low up. If the quan­tum of work not taken up by the SIT can be as­signed to the IT Depart­ment, the SC may kindly con­sider dis­solv­ing the SIT. This will save con­sid­er­able ex­pen­di­ture to the ex­che­quer.

The SIT works un­der the su­per­vi­sion and guid­ance of SC and re­ports di­rectly to it and there­fore, there is noth­ing in pub­lic do­main about its work­ing and what it has achieved since its con­sti­tu­tion

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