Mumbai: The Bombay High Court has granted interim relief to Reliance Group Chairman Anil Ambani in a case related to alleged undisclosed foreign assets under the Black Money Act.
The court directed the Income Tax Department not to take any coercive action against him, including prosecution or penalty proceedings, until the writ petition is heard and decided.
The development comes after Ambani challenged a show-cause notice issued by tax authorities proposing prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
Court directs no coercive action for now
A division bench comprising Justices S.V. Gangapurwala and R.N. Laddha heard the matter and granted temporary protection to Ambani after the Income Tax Department sought additional time to file its response.
The court clarified that while appellate proceedings may continue, authorities cannot initiate coercive measures against Ambani during the pendency of the writ petition.
“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 observed.
The interim order provides temporary relief to Ambani as legal proceedings continue.
Tax department alleges undisclosed foreign assets
According to the Income Tax Department, Ambani allegedly evaded around Rs 420 crore in taxes linked to undisclosed foreign assets valued at more than Rs 814 crore.
The department claims these assets were held in two Swiss bank accounts that were not disclosed to Indian tax authorities. Based on its investigation, an assessment order passed in March 2022 reportedly concluded that Ambani possessed undisclosed foreign assets under provisions of the Black Money Act.
Tax authorities subsequently issued a show-cause notice proposing prosecution under the law.
Ambani challenges retrospective application of law
Ambani has challenged certain provisions of the Black Money Act as well as a Central Government notification issued in 2015 that allows the legislation to be applied retrospectively in specific circumstances.
Senior advocate Iqbal Chagla, appearing on behalf of Ambani, argued before the court that parallel criminal proceedings should not be initiated while civil proceedings concerning the same matter remain pending before the appellate authority.
The legal team also contended that authorities must provide adequate reasons and pass a detailed speaking order before initiating prosecution proceedings.
Court seeks clarification on response to notice
During the hearing, the bench sought clarification on whether Ambani had responded to the show-cause notice issued by the Income Tax Department.
His counsel informed the court that a reply had already been submitted and that additional documents had been requested from the department before filing a more comprehensive response.
The matter is expected to be heard further after the tax department files its affidavit and response before the court.
Significance of the case
The case is significant as it involves the interpretation and application of the Black Money Act, a law introduced to tackle undisclosed foreign income and assets held by Indian taxpayers abroad.
The outcome could have wider implications regarding the retrospective application of the legislation and the process that authorities must follow before initiating prosecution under the Act.
For now, the Bombay High Court’s interim order ensures that no prosecution, penalty or other coercive measures can be taken against Ambani until the matter is finally adjudicated.
Conclusion
The Bombay High Court’s interim relief provides temporary protection to Anil Ambani while his challenge to the Black Money Act proceedings is examined. With allegations involving undisclosed foreign assets worth over Rs 814 crore and disputed tax liabilities of around Rs 420 crore, the case is likely to remain closely watched as it progresses through the judicial system.