Governance

Black elephant

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

by TN PANDEY

Black-elephantAbitter 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 Vice-Chairman. 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:

  • The SIT shall function under the guidance and direction of Chairman and Vice-Chairman.
  • 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 –
    • All issues relating to the matters concerning and arising from unaccounted monies of Hassan Ali Khan and the Tapurias;
    • 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
    • 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.
  • 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.
  • 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.

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

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. gfiles end logo

The writer is former Chairman, CBDT



VOL. 12 | ISSUE 4 | JULY 2018

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