Anil Ambani case: Bombay HC asks I-T dept how Black Money Act can have retrospective effect

The Bombay High Court on Monday questioned the Income Tax departments move seeking to prosecute Reliance ADAG chairman Anil Ambani under the Black Money Act for alleged tax evasion and asked how Acts criminalising certain action can have a retrospective effectA division bench of Justices Gautam Patel and S G Dige while hearing a petition by Ambani challenging a show cause notice issued to him by the IT department asked how a person conducting himself or herself in a certain manner will know what the government is going to do in futureThe high court posted the matter for hearing on February 20 and extended its September 2022 order directing the IT department to not take any coercive action against Ambani till thenThe IT department had issued a notice to Ambani on August 8 2022 for allegedly evading Rs 420 crore in taxes on undisclosed funds worth more than Rs 814 crore held in two Swiss bank accountsAs per the departments notice Ambani was liable to be prosecuted under Sections 50 and 51 of the Black Money undisclosed foreign income and assets Imposition of Tax Act of 2015 which stipulates a maximum punishment of 10 years imprisonment with a fineThe department has charged Ambani 63 with wilful evasion saying he intentionally did not disclose his foreign bank account details and financial interests to Indian tax authoritiesAmbani in his petition claimed the Black Money Act was enacted in 2015 and the alleged transactions are of assessment years 20062007 and 20102011During the brief hearing on Monday the bench questioned how the government can frame Acts criminalising certain actions with retrospective effectA person behaves in a certain mannerthen you government criminalise it with retrospective effect How does a person then conduct himself or herself Justice Patel saidAlso Read HC disposes of Hany Babus plea after being told about his cataract surgeryYou can say that henceforth a person cannot do this actionthat is finebut how can it have a retrospective effect You can lay down a time period from which the particular action is an offence he saidThe bench gave an example saying if a person has been buying books and claiming deductions on the same and then one day the government says such deductions cannot be claimed and that it is a criminal offenceHow can you say that since this person claimed deductions in the past it is a crime now How can a person know what you government are going to do ten years from now This is the most simple and absurd example I can give Justice Patel saidThe bench while adjourning the plea issued a notice to the Attorney General of India as Ambanis petition has challenged the constitutional validity of the Black Money ActThe court also permitted Ambani to file his rejoinder to the affidavit filed on Monday by the Income Tax departmentAccording to the IT notice Ambani was an economic contributor as well as beneficial owner of a Bahamasbased entity called Diamond Trust and another company called Northern Atlantic Trading Unlimited NATU which was incorporated in the British Virgin Islands BVIThe IT department alleged that Ambani failed to disclose these foreign assets in his income tax return ITR filings and hence contravened provisions of the Black Money Act brought by the Narendra Modi government soon after it was first elected to power in 2014The total value of the undisclosed funds in the two accounts has been assessed by tax officials at Rs 814 crore and tax payable on this amount at Rs 420 croreThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever