Chairman Black Money SIT & Former SC Judges praise old note ban. Letter to Finance Minister that Govt took bold step to demonetize Rs. 500 Rs.1000 notes
Ministry of Finance
11-November, 2016
The Chairman and Vice-Chairman, SIT on Black Money & Former Judges of the Supreme Court of India, Justice MB Shah and Justice Arijit Pasayat in a jointly written letter to the Union Finance Minister, Shri Arun Jaitley: The Government has taken a bold step to demonetize Rs. 500 and Rs.1,000 notes.
The Chairman, SIT on Black Money & Former Judge of the Supreme Court of India, Justice MB Shah and Former Judge of the Supreme Court of India &Vice- Chairman, SIT on Black Money, Justice Arijit Pasayat has stated that the Government has taken a bold step by demonetizing Rs.500 and Rs.1,000 notes. In a jointly written letter to the Union Finance Minister, Shri Arun Jaitley, both the Former Judges of the Supreme Court of India have further stated that while it is a step in the right direction, a few steps would need to be taken to not only ensure that people holding black money in cash are not able to convert it into white but also to ensure that after a few months, a similar situation where the unscrupulous people are again able to store their illicit income in form of cash, does not arise.
Both the Former Judges of the Supreme Court of India in their letter have recommended that the following steps be taken to ensure the above:
(i) Instructions be issued to banks to report to CBDT or FIU, the transactions which fall in the following category:
(ii) As per media reports, a large number of people are reported to have bought jewelleryin cash on the day demonetization was announced. Cash deposits made by jewelers should be correlated with their sales and PAN number of the buyers of jewellery. The same should then be analyzed against known sources of income of PAN holders and action taken accordingly.
(iii) Putting a limit of cash holding and cash transaction: Both the Former Judges of the Supreme Court of India have also mentioned in their jointly written letter that the cleansing which is achieved through this demonetization measure is likely to be short lived in case systemic steps are not taken to ensure that people do not start hoarding black money in cash again. They have also mentioned in their letter that the SIT in its previous reports has recommended putting a limit on cash transactions and also having an upper threshold on cash holding. This has been referred to in a previous letter dated 7th November, 2016 too. They reiterated that both these recommendations, if implemented, shall go a long way in ensuring that cash is not used as a medium of storing black money in the future. The recommendation relating to putting a limit on cash holding is specially important in this regard since with the introduction of Rs. 2,000 notes, it shall be even more easier to store large amounts of money in cash. If no limit to cash holding is imposed, we may lose the benefits of demonetization quite soon.
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