No coercive action till Nov 17 against Anil Ambani on notice under Black Money Act: Bombay HC to Income Tax dept

The Bombay High Court on Monday directed the Income Tax department not to take any coercive action against Reliance Group Chairman Anil Ambani till November 17 on a show cause notice issued to him seeking to prosecute him under the Black Money ActThe 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 accountsThe 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 authoritiesAs 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 that stipulates a maximum punishment of 10 years imprisonment with a fineAmbani earlier this month approached the HC challenging the notice claiming that the Black Money Act was enacted in 2015 and the alleged transactions are of assessment years 20062007 and 20102011Also Read SC directs Bombay HC to hear and decide bail plea of Anil Deshmukh expeditiouslySenior counsel Rafique Dada appearing for Ambani said provisions of the Act cannot have a retrospective effectAdvocate Akhileshwar Sharma appearing for the IT department sought time to respond to the petitionA division bench of Justices S V Gangapurwala and R N Laddha permitted the same and posted the petition for hearing on November 17The Income Tax department shall till the next date not take any coercive action against the petitioner Ambani in pursuance to the show cause notice the court saidIt also directed the IT department to respond to Ambanis contention that provisions of the Black Money Act may not have a retrospective effectDada told the court that an assessment order was passed by the department in March this year and the petitioner filed an appeal against the said order before the Commissioner of Income TaxPending this civil proceeding the department has now issued this show cause notice seeking to initiate criminal proceedings against the petitioner under the provisions of the Black Money Act Dada saidHe said when a civil proceeding is pending criminal action cannot be sought to be initiated by the departmentThe show cause notice on the face of it was violative of Article 20 of the Constitution of India that says no person shall be prosecuted for the same alleged offence twice Let the civil proceedings carry on and reach its logical end Dada arguedThe court then sought to know from Dada if Ambani had replied to the show cause noticeTo this Dada said the petitioner has sought relevant documents from the departmentOnce the documents are received the petitioner would file a detailed reply he saidDada further argued that the notice was issued prematurely and the IT departments action was not only without jurisdiction or authority in law but also violative of the petitioners fundamental rightsAccording to the IT departments 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 department alleged that Ambani failed to disclose these foreign assets in his income tax return ITR filings and hence contravened the 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 8142795784 Rs 814 crore and tax payable on this amount at Rs 4202904040 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