Mumbai: The Bombay High Court on Monday granted interim protection from prosecution or imposition of any penalty by the Income Tax (I-T) department to industrialist Anil Ambani in an alleged Rs 420-crore aggregate tax demand case. This order came in a petition filed by Ambani challenging the constitutional validity of provisions of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. The tax dispute relates to Rs 800 crore allegedly held in two Swiss accounts.
Court Order and Interim Relief
A bench of Justices Burgess Colabawalla and Firdosh Pooniwalla passed the order while hearing Ambani's petition, which was filed in 2022. The petition challenges the constitutional validity of provisions of the Black Money Act, alleging that they violate fundamental rights under the Constitution. The HC admitted the petition after hearing arguments from Ambani's senior counsel Prakash Shah and I-T department counsel Akhileshwar Sharma.
The court stated, "As far as interim relief is concerned, we direct that since the assessment order is already passed, and the petitioner has already filed an appeal before the CIT(A), the appeal can proceed and orders can be passed thereon." However, the HC clarified that no coercive action shall be taken against Ambani, including prosecution and penalty, until the hearing and final disposal of his writ petition.
Challenge to Black Money Act Provisions
Ambani challenged the validity of sections 3(1), 50, 51, 59, and 72C of the Black Money Act. The HC had earlier questioned the I-T department on how action could be taken retrospectively against the petitioner. The bench noted, "It has been brought to our notice that the constitutional validity of certain provisions of the Black Money Act have been challenged in other writ petitions as well, in which rule had already been issued and interim relief is granted."
Ambani's counsel argued that the Black Money Act came into force in 2015, while the alleged transactions pertain to assessment years 2006 and 2010-11. The counsel contended that criminal provisions cannot have retrospective effect, relying on Article 20 of the Constitution.
Next Steps
The HC sought replies from the I-T department within four weeks. The petition will now be heard along with other petitions filed in 2018, 2019, and 2025 that raise similar issues regarding the constitutional validity of the Black Money Act.
