No I-T action against Anil Ambani under Black Money Act till Nov 17: Bombay HC

Reliance Group chairman Anil Ambani challenged the income tax (I-T) department’s prosecution notices issued to him on August 8.

The Bombay high court on Monday restrained the income tax (I-T) department from taking any coercive action against Reliance Group chairman Anil Ambani under the Black Money Act till November 17 after he claimed the proceedings against him were based on frivolous and false allegations and challenged the retrospective applicability of the notices issued to him.

Anil Ambani was issued I-T notices for the alleged evasion of ₹420 crore towards taxes on transactions done by him in 2006 and 2012. (File Photo/Mint)

The I-T department on August 8 issued prosecution notices to Anil Ambani under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 for the alleged evasion of ₹420 crore towards taxes on transactions done by him in 2006 and 2012.

Ambani approached the high court challenging the notices.

The division bench of justice S V Gangapurwala and justice R N Laddha while hearing the petition filed by Ambani was informed by senior advocate Rafiq Dada that the notices issued to him by the department under section 50 and 51 of the Act in August were not valid. Dada submitted that as enactment came in force only in 2015, the department could not have issued show cause notices for transactions done much prior to that. The bench was informed that the notices were being applied retrospectively and hence were invalid.

The bench was further informed that the assessing officer had passed an order in March this year under section 10 (3) of the Act stating that Ambani had undisclosed foreign income and assets based on transactions done in 2006 and 2012, and hence, was liable to pay ₹420 crore towards income tax. The bench was informed that the proceedings against him were based on frivolous and false allegations and hence the order has been challenged before the commissioner of income tax (appeals).

Considering this, Dada submitted that the notice issued in August was premature and hence he should be granted protection from any coercive action by the department. The court was also told that apart from seeking protection and quashing of the notice the petition had also challenged validity of various sections of the 2015 Act which permitted the retrospective application of the Act on transactions done before it came into force.

When asked to respond to the retrospective applicability of the 2015 Act, the counsel for the I-T sought time to take instructions. The court then observed that as petitions dealing with similar issues were pending before various high courts and granted interim relief to Ambani till November 17 and directed the I-T department to refrain from taking any coercive steps till then.