Bombay HC Grants Interim Relief To Anil Ambani In ₹420 Crore Black Money Act Case

Mumbai, June 10: The Bombay High Court has granted interim relief to industrialist Anil Ambani by directing that no coercive action, including prosecution or penalty, be taken against him in a case under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

petition challenging constitutional validity

A bench of Justices BP Colabawalla and Firdosh Pooniwalla admitted Ambani’s petition challenging the constitutional validity of certain provisions of the Act, which he claims are unconstitutional.

The court noted that similar petitions challenging the law are already pending before it and said Ambani’s plea would be heard along with them.

“The said appeal can proceed and orders can be passed thereon. However, we clarify that no coercive action shall be taken against the Petitioner, including that of prosecution and penalty, till the hearing and final disposal of this Writ Petition,” the HC said.

The High Court also directed the Union government to file its response to the petition.

assessment order and ongoing appeal

The court noted that an assessment order has already been passed against Ambani and that he has challenged it before the Commissioner of Income Tax (Appeals). While allowing that appeal process to continue, the court clarified that no coercive action, including prosecution and penalty, should be taken against him until the writ petition is finally decided.

alleged tax evasion

The Income Tax Department had issued a notice to Ambani in August 2022, alleging that he evaded taxes of over Rs 420 crore on undisclosed foreign assets worth more than Rs 814 crore held in two Swiss bank accounts.

According to the department, Ambani failed to disclose his foreign bank accounts and financial interests to Indian tax authorities. It alleged that he was the “economic contributor as well as beneficial owner” of Bahamas-based Diamond Trust and British Virgin Islands-incorporated Northern Atlantic Trading Unlimited (NATU), and did not report these assets in his income tax returns.

The department said the alleged violations attracted prosecution under Sections 50 and 51 of the Black Money Act, which provide for imprisonment of up to 10 years along with a fine.

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arguments on retrospective application

In his petition, Ambani argued that the Act came into force in 2015, whereas the transactions in question relate to assessment years 2006-07 and 2010-11. He contended that the law cannot be applied retrospectively to transactions that took place before its enactment.

Tax authorities have assessed the value of the allegedly undisclosed foreign assets at Rs 814 crore and calculated the tax liability at about Rs 420 crore.

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