Delhi High Court Refuses To Stay Black Money Act Prosecution Over Belated Retrospectivity Challenge
The Delhi High Court on 20 August refused to stay prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, observing that the Petitioner should have challenged the retrospective operation of its provisions when proceedings concerning the foreign assets first began.
A Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta heard a petition challenging the constitutional validity of Sections 50, 51 and 72(c) of the Act. They observed:
“If he was aggrieved, he ought to have laid challenge to the vires of the provisions at the first available opportunity.”
Section 50 prescribes punishment where a resident who has filed an income tax return wilfully fails to disclose information relating to a foreign asset, including a financial interest in an entity, or fails to disclose income from a foreign source. Section 51 prescribes punishment for a wilful attempt to evade tax, penalty or interest under the Act.
Section 72(c) provides that where a person acquired an asset before the commencement of the Act and did not declare it under the one time disclosure scheme, the asset is deemed to have been acquired in the year in which the Assessing Officer issues a notice under Section 10. The provisions of the Act then apply to that asset.
The Petitioner submitted that the High Court was already hearing similar petitions challenging these provisions and had passed interim orders in those matters. He therefore sought a similar interim order. The Court was also informed that the authorities had launched prosecution against the Petitioner under Sections 50 and 51 and issued summons to him.
The Bench noted, however, that the Petitioner received a notice under Section 10 of the Act on 27 June 2022. He thereafter participated in the proceedings, received an assessment order dated 29 March 2025 and subsequently filed an appeal against the assessment order. It observed that the Petitioner essentially challenged the retrospective operation of various provisions of the 2015 Act, including Section 72(c).
Prima facie, it observed that if the retrospective operation of the provisions affected the Petitioner, it would have affected him when the Assessing Officer first initiated proceedings concerning assets acquired before the commencement of the Act.
Therefore, the judges held that the Petitioner's challenge to retrospectivity at this stage could not, by itself, entitle him to an ex parte ad interim stay or allow him to stall the prosecution before the Respondents filed their reply.
Accordingly, the High Court directed the Respondents to file their reply and listed the matter for 28 October 2026.
For Petitioner: Mr. Deepak Chopra, Sr. Advocate with Mr. Ankul Goyal and Mr. Divyansh Jain, Advocates.
For Respondents: Ms. Hemlata Rawat, JSC, Mr. V.K. Saksena, JSCs for Mr. Anurag Ojha, SSC for IT Dept. Mr. Kshitij Chhabra, SPC with Mr. Priyanshu Chhabra, Advocate for UOI.