Clarification regarding seizure of Old High Denomination (Rs. 500 and Rs. 1000) Bank Notes (OHDBNs) under the Income-tax Act, 1961 - Income Tax - F.No. 286/107/2016-IT(Inv.II)

F.No. 286/107/2016-IT(Inv.II) Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes Room No. 254, North Block, New Delhi, dated December 1, 2016 To All the Principal CCsIT All the DsGIT(Inv.) Sub : Clarification regarding seizure of Old High Denomination (Rs. 500 and Rs. 1000) Bank Notes (OHDBNs) under the Income-tax Act, 1961 reg. Madam/Sir, With a view to curbing fake Indian currency notes which are used for financing abversive activities such as drug trafficking and terrorism and for eliminating high denomination bank notes used for storage of unaccounted wealth, the Central Government decided that OHDBNs shall cease to be legal tender w.e.f. 09.11.2016 vide Notification S.O. 3407(E) dated 08.11.2016 in F.No.10/03/2016-Cy.I. 2. Following the above Notification, doubts have been raised regarding seizure of OHDBNs as valuables/assets during searches conducted u/s 132(1) or requisitions made u/s 132A of the Income-tax Act, 1961 (the Act) from 09.11.2016 onwards. Order dated October 31, 1995 of ITAT in Andhra Pradesh Yarn Combines (P) Ltd. Dated 16.01.2006 (200 CTR 641) which were in the context of demonetization of OHDBNs in 1978, have also been mentioned in this regard. 3. The legal position has been examined by CBDT in light of provisions of the said notification. Attention is invited to the provisions of the said notification, more particularly the following extracts: . The central government hereby declares that the specified bank notes shall cease to be legal tender with effect from the 9th November, 2016 to the extent specified below The specified bank notes held by a person .. may be exchanged for a period up to and including the 30th December 2016 there shall not be any limit on the quantity or value of the specified bank notes to be belonged to the account maintained with the bank by a person where the specified bank notes are tendered . the equivalent value of specified bank notes tendered may be credited to an account maintained by the tenderer any person who is unable to exchange or deposit the specified bank relate in their bank before the 30th December, 2016, shall be given an opportunity to do so as early to the Reserve Bank or such other facility until a later dated as may be issued In Yours faithfully, (Neeraj Kumar) DCIT OSD (Inv.II), CBDT