The Centre told the Supreme Court on Friday that it owed no legal duty to citizens to extend a “grace period” for deposit of their demonetised ₹500 and ₹1,000 bank notes after December 31, 2016.
The affidavit filed by the Union Ministry of Finance said the decision not to extend the period for deposit of demonetised notes was taken consciously after an overall review of the rampant “malpractices and irregularities” detected between November 9 and December 30, 2016 when the public was allowed to exchange or deposit their old money for the new currency.
The government said the Specified Bank Notes (Cessation of Liabilities) Ordinance 2016 – which made possession of demonetised notes beyond December 31, 2016 an offence — was a “major economic step.”
The government said the ordinance had nullified any assurances given by the RBI notification of November 8, 2016 to give a grace period. The ordinance has been replaced by an Act of Parliament.
The affidavit said that between November 9, 2016 and January 1, 2017 more than 1,100 raids and surveys were conducted by the Income Tax department in various parts of the country. Of these raids, more than 400 cases were referred to the Enforcement Directorate and the CBI for further action in accordance with law. The undisclosed income detected from these raids was more than ₹5,400 crore, the government submitted.
5,100 notices
The same period saw the government issue 5,100 notices for verification of “high-value suspicious cash deposits” made in bank accounts. Preliminary probes following the raids in the first three weeks of demonetisation revealed irregularities ranging from unusual spurt in cash sales immediately after Prime Minister Narendra Modi’s live TV announcement on November 8 last year to cash advances against “future sales.”
The government said initiatives like the Income Tax department’s ‘Operation Clean Money’, have identified 18 lakh persons with suspicious tax profiles. Shadowy deposits made in the Pradhan Mantri Garib Kalyan Yojana were detected. “More than 3.78 lakh out of 18 lakh high-risk cases have been taken up for assessment and investigation,” the affidavit said.
It attempts to show the extent to which black money has pervaded society.
The affidavit said searches undertaken by the Income Tax department between April 1, 2014 and February 28, 2017 in more than 2,027 groups revealed black money to the tune of ₹36,051 crore and seizure of undisclosed assets worth ₹2,890 crore.
Again, 15,000 surveys for the same period resulted in the detection of undisclosed income of more than ₹30,000 crore.
