Bombay HC interim relief to Anil Ambani as he queries retrospective applicability of black money law

The court granted interim relief to Anil and issued a restraining order on the department’s showcause notice. The department’s order listed offshore entities and details of transactions in linked bank accounts adding up to over Rs 800 crore (based on the current exchange rate).

The industrialist had approached the Commissioner of income Tax (Appeals) against the assessing officer’s March 31 order.

The department issued a showcause notice on August 8 seeking to initiate prosecution proceedings on the basis of the assessment order. The department accused Ambani of “wilful” evasion of tax and claimed he had “intentionally” hidden his foreign bank account details and financial interests to Indian tax authorities.

The department found Ambani liable to be prosecuted under Sections 50 and 51 of the Act, which provided a maximum punishment of 10 years’ imprisonment with a fine.

Ambani requested the authority time up to September 15 to reply. On September 7, the department declined to accord any further extension, and Ambani submitted his reply on September 12, raising objections to the notice.

A bench of Justice Sanjay V Gangapurwala and Justice R N Laddha was told by senior advocate Rafiq Dada that Ambani could not be prosecuted for the alleged transactions in 2006-07 and 2013 because the Act was enforced in 2015. Dada submitted that Ambani had given a response to the showcause notice and sought various documents and therefore the notice was premature. Ambani also termed the allegations “unsubstantiated, patently false and frivolous”.

After the department sought time to respond to its question on the retrospective applicability of the 2015 Act, the bench granted interim relief to Ambani on Monday.

Ambani also challenged the constitutional validity of the Act‘s provisions including its sections 3 (1), 50, 51, 59 and 72C,which he said violated Articles 14, 20 and 21 of the Constitution.

The bench will hear the plea next on November 17.