Mumbai: The Bombay High Court on Tuesday granted industrialist Anil Ambani interim protection from coercive action, prosecution and penalty proceedings in a case under the Black Money Act, while admitting his petition challenging the constitutional validity of certain provisions of the law. The court directed the Union government to file its response and said no coercive steps should be taken until the matter is finally heard.
Court Admits Plea Challenging Act Provisions
A bench of Justices BP Colabawalla and Firdosh Pooniwalla passed the order after noting that similar petitions challenging provisions of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 are already pending before the court.
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The bench directed the Centre to file an affidavit in response to Ambani’s plea. It clarified that the matter would be taken up for final hearing in due course and that no coercive action, including prosecution or penalty proceedings, should be initiated against him until then.
The court also noted that an assessment order had already been passed against Ambani by the Income Tax Department and that he had filed an appeal before the Commissioner of Income Tax (Appeals). These proceedings may continue independently, but enforcement action will remain stayed during the pendency of the writ petition.
Tax Department Cited Foreign Assets
The case arises from allegations by the Income Tax Department that Ambani failed to disclose foreign assets and bank accounts in his income tax returns. A notice issued in August 2022 alleged tax evasion of around ₹420 crore on undisclosed foreign funds exceeding ₹814 crore in two Swiss bank accounts.
The department also alleged that Ambani had beneficial ownership in foreign entities, including a Bahamas-based trust and a company incorporated in the British Virgin Islands. According to the notice, these assets were required to be disclosed under the Black Money Act.
Officials claimed that the total undisclosed funds linked to the matter were over ₹814 crore, with tax liability estimated at nearly ₹420 crore. Proceedings were initiated under provisions carrying stringent penalties, including imprisonment for wilful non-disclosure of foreign assets.
Retrospective Application Under Challenge
In his petition, Ambani challenged the constitutional validity of certain provisions of the Black Money Act. He argued that the 2015 law cannot be applied retrospectively to transactions that allegedly took place in assessment years 2006-07 and 2010-11.
The petition contended that retrospective application of penal provisions violates constitutional principles and exceeds legislative authority. It sought quashing of proceedings initiated under the Act on these grounds.
After hearing preliminary arguments, the High Court said Ambani’s plea should be heard along with similar pending challenges. The bench did not express any opinion on the merits of the case at this stage. The interim order will remain in place until the court examines the constitutional questions raised in the petition.
