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Bombay High Court grants interim relief to Anil Ambani in income tax case under Black Money Act

09:28 AM Mar 11, 2023 IST | India Legal
bombay high court grants interim relief to anil ambani in income tax case under black money act

The Income Tax Department has been directed by the Bombay High Court on Friday for not taking any action till March 17 on the penalty notices issued against the chairperson of Reliance (ADA) Group, Anil Ambani with relation tothe income tax proceedings initiated against him.

A bench comprising of Justice GS Patel and Justice Neela Gokhale passed the order in petition by Ambani that challenges a show cause notice that was issued to him under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

A co-ordinate bench of the High Court had earlier protected Ambani from any coercive action on the show cause notice by way of ad-interim relief on September 26, 2022. 


In the hearing, Anil Ambani was represented by Senior Advocates Rafique Dada and Prateek Sekseria, who contended that the income tax department has issued penalty notices in furtherance of the show cause notice. 

Advocate Dada sought to challenge levy of such penalty notices and also asked permission to amend the petition. 


He also added that the same was allowed by the division bench which also protected Ambani from any action till the next hearing date.


“The court order said that the petitioner (Ambani) will be pressing for ad-interim reliefs as subsequent demands have been made in form of subsequent penalty notice.


It further added that the leave is granted to amend petition. Authorities to take no further steps pursuant to penalty demand notice till April 17, 2023.

Ambani had moved the Court seeking a stay on the proceedings initiated against him after a show cause notice came to be issued by the income tax department. 


On August 2022, the IT Department had issued the notice to Ambani for allegedly evading ₹420 crores in taxes on undisclosed funds worth more than ₹814 crores held in Swiss Bank accounts.

As per the notice issued, Ambani was an economic contributor as well as beneficial owner of a Bahamas-based entity called ‘Diamond Trust’ and Northern Atlantic Trading Unlimited (NATU) company.

The IT department had alleged that it was failure on part of Ambani to not have disclosed these foreign assets in his income tax return (ITR) filings and, hence, contravened the provisions of the Black Money Act.

Ambani’s plea pointed out that the notice under challenge affected his vested rights under law.

The action by the authorities seeking to exercise powers under the Black Money Act was on the basis of transactions which relate to a period 10 years prior to the Black Money Act coming into force.

The claim made was Ambani was that this action was clearly violative of his fundamental rights under Article 14 and 20 of Constitution of India.

Ambani stated that the provisions of the Black Money Act could not have a retrospective effect.

Anil Ambani had also contended that the show cause notice was issued despite an assessment order of March 31 under the Black Money Act. 

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