Bombay High Court Orders No Coercive Action Against Anil Ambani Pending Challenge To Black Money Act

The Bombay High Court on Monday directed that no coercive action, including prosecution or penalty proceedings, be taken against industrialist Anil Ambani pending the final disposal of his writ petition challenging certain provisions of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

Ambani has challenged certain provisions of the Act as being ultra vires the Constitution of India.

A division bench of Justices B.P. Colabawalla and Firdosh P. Pooniwalla noted that similar constitutional challenges to provisions of the act are already pending before the court and have been granted interim relief.

Ambani moved the High Court in 2022 challenging the constitutional validity of certain provisions of the Black Money Act after tax authorities sought to invoke the legislation against him over alleged undisclosed foreign assets.

The proceedings stemmed from the Income Tax Department's allegation that he had evaded ₹420 crore in taxes on ₹814 crore allegedly held in two Swiss bank accounts.

The court clarified that Ambani's appeal against the assessment order before the Commissioner of Income Tax (Appeals) can proceed. It also clarified that orders may be passed in the appeal. However, no coercive action shall be taken against him until the hearing and final disposal of the writ petition.

The bench ruled, “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 said Appeal can proceed and orders can be passed thereon. However, we clarify that no coercive action shall be taken against the Petitioner, including that of prosecution and penalty, till the hearing and final disposal of this Writ Petition.”

The Court directed the respondents to file their affidavit in reply within four weeks.

It further directed that the petition be heard along with other pending writ petitions raising the same or similar issues concerning the Black Money Act.