Bombay High Court stays prosecution and penalty against Anil Ambani pending constitutional challenge
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Mumbai: The Bombay High Court on Monday granted industrialist Anil Ambani interim protection from prosecution and penalty in a tax-evasion case under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, while his constitutional challenge to the law is pending.
A division bench of Justices Burgess P. Colabawalla and Firdosh P. Pooniwalla heard Ambani’s 2022 petition disputing the validity of several provisions of the Black Money Act, arguing they violate fundamental constitutional rights. The court earlier restrained the Income Tax Department from taking coercive action against him over notices alleging he evaded about Rs 420 crore in taxes on roughly Rs 814 crore held in two Swiss bank accounts.
The bench noted related petitions challenging the Act’s provisions are pending and directed that the present plea be heard along with those matters. It asked the central government to file an affidavit in reply within four weeks. The court also observed that an assessment order has already been passed and Ambani has appealed to the Commissioner of Income Tax (Appeals); that appeal may proceed and orders can be issued.
However, the court made clear that no coercive action, including prosecution or imposition of penalty, shall be taken against Ambani until the writ petition is finally disposed of.
The I-T investigation wing’s Mumbai unit had issued notices beginning in 2019 and, in March 2022, passed a final order under the Black Money Act alleging detection of undeclared offshore assets and linked transactions totaling over Rs 800 crore (as per then exchange rates). The department has accused Ambani of wilful tax evasion and of deliberately hiding foreign bank accounts and financial interests, seeking prosecution under sections 50 and 51 that carry up to 10 years’ imprisonment and fines.
Ambani contends the Act, enacted in 2015, cannot be applied retrospectively to transactions from 2006–07 and 2013 and has described the allegations as “unsubstantiated, patently false and frivolous.”