Home / News / India /  No coercive action till 17 Nov against Anil Ambani: Bombay HC

The Bombay High Court on Monday directed the Income Tax department to not take any coercive action against Reliance Group chairperson Anil Ambani till 17 November  on a show cause notice issued to him under the Black Money Act.

The Income Tax department(I-T department) had issued notice to Anil Ambani on 8 August for allegedly evading taxes in tune of 420 crore on undisclosed funds worth more than 814 crore held in two Swiss bank accounts.

The I-T department has charged Ambani, 63 year-old, with 'wilful' evasion, saying he 'intentionally' did not disclose his foreign bank account details and financial interests to the tax authorities.

As per the notice, he has been charged under Sections 50 and 51 of the Black Money (undisclosed foreign income and assets) Imposition of Tax Act of 2015, that has a maximum punishment of 10 years imprisonment with a fine

Earlier this month, Ambani approached the HC challenging the notice, claiming that the Black Money Act was enacted in 2015 and the alleged transactions are of assessment years 2006-2007 and 2010-2011

Senior counsel Rafique Dada, appearing for Ambani, said provisions of the Act cannot have retrospective effect.

Advocate Akhileshwar Sharma, appearing for the I-T department, sought time to respond to the petition.

A division bench of Justices S V Gangapurwala and R N Laddha permitted the same and posted the petition for hearing on 17 November.

"The 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 said.

It also directed the I-T department to respond to Ambani's contention that provisions of the Black Money Act may not have a retrospective effect.

Dada 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 Tax.

He said when a civil proceeding is pending, criminal action cannot be sought to be initiated by the department.

"The 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 argued.

The court sought to know from Dada if Ambani had replied to the show cause notice.

"Once the documents are received, the petitioner would file a detailed reply," Senior counsel Rafique Dada said.

Dada further argued that the notice was issued prematurely and the I-T department's action was not only without jurisdiction or authority in law but also violative of the petitioner's fundamental rights.

According to the department's notice, Ambani was an "economic contributor as well as beneficial owner" of a Bahamas-based entity called Diamond Trust and company called Northern Atlantic Trading Unlimited (NATU) which was incorporated in the British Virgin Islands (BVI).

The 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.

The total value of the undisclosed funds in the two accounts has been assessed by tax officials at 814 crore and tax payable on this amount at 420 crore.

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