IT and ED Raids: Every year, the Income Tax (IT) Department, Enforcement Directorate (ED), and Central Bureau of Investigation (CBI) conduct numerous raids that yield the recovery of unaccounted cash valued at crores. What happens to the cash recovered by the agencies during raids is a question that arises from the slick photos of seized money arranged to form letters like “E” and “D” to denote ED during raids.
Unacceptable Holding of Unaccounted Money
It is not acceptable for the ED, CBI, or IT Department to simply hold unaccounted money on their office property. Initially, the accused is given an opportunity to clarify the source of the money. The money is deemed ill-gotten and subject to seizure in accordance with the provisions of the Prevention of Money Laundering Act (PMLA) if the accused does not provide a satisfactory response.
Initiation of Money Handling Process
This is where the real process of taking the money begins. To count the cash that has been seized, the State Bank of India is contacted. Concurrently, a list of the cash that has been seized is created, including information about the amount that has been recovered in different denominations, such as Rs 500, Rs 200, Rs 100, Rs 50, and so on. The bank uses a number of cash counting machines, depending on the amount, to make sure the counting process goes smoothly and quickly.
Sealing of Money in Boxes
In front of impartial witnesses, the money is sealed in the boxes after counting is finished. After that, the money is brought to the SBI branch and deposited into the agency’s Personal Deposit (PD) account. The money is then transferred to the treasury of the national government.
Restrictions on Fund Usage
Notably, money cannot be spent until the legal matter has concluded. While the case is pending, the ED, the bank, and the government are not permitted to use the funds for any reason. After the agency issues a provisional attachment order, the attachment must be confirmed within six months by the adjudicating authority. This order makes sure the money that was seized cannot be used to benefit the accused. Interestingly, the agency has a 180-day window in which to retain the funds. The agency must demonstrate the legitimacy of the seizure during that period. The money is automatically returned to the accused if the agency is unable to comply.
Allocation of Funds Based on Case Outcome
The case’s outcome will determine how the funds are allocated. The money is returned if the defendant is found not guilty; if they are, it becomes government property. In cases of money laundering, scams, tax fraud, or irregularities, the Enforcement Directorate, the Central Bureau of Investigation, and the Income Tax Department have the authority to raid, investigate, and seize property.
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