The Bombay High Court ordered the Income Tax Department on Friday not to take any action regarding the penalty notices issued against Anil Ambani, the chairman of Reliance (ADA) Group till March 17, in connection with the income tax proceedings started against him.
The order was passed in response to a petition Ambani filed in which he contested a show-cause notice sent to him under the 2015 Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act.
The judgement was given by a bench of Justices GS Patel and Neela Gokhale in response to Ambani’s plea contesting a show cause notice issued to him under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
On September 26, 2022, a co-ordinate bench of the High Court granted Ambani ad-interim relief from any coercive action over the show cause notice.
Ambani moved the court for a stay of the actions taken against him after the income tax agency issued a show-cause notice.
Ambani received the notification from the IT Department on August 9, 2022, for allegedly avoiding taxes on undeclared funds of more than Rs 814 crores stored in Swiss Bank accounts by Rs 420 crores.
According to the notification, Ambani was a financial supporter and a beneficial owner of the Northern Atlantic Trade Unlimited (NATU) corporation and the Bahamas-based “Diamond Trust” entity.
Ambani allegedly “failed to disclose” these foreign assets in his income tax return (ITR) forms, in violation of the Black Money Act’s rules, according to the department.
Ambani’s plea underlined how the notification that was being challenged had an impact on his lawful rights.
The steps taken by the authorities to exercise their authority under the Black Money Act were based on transactions that occurred ten years before the Black Money Act went into effect.
It was argued that this move obviously violated Ambani’s fundamental rights under Articles 14 and 20 of the Indian Constitution.
According to Ambani, the Black Money Act’s prohibitions cannot be applied retroactively.
He further argued that the assessment order issued on March 31 pursuant to the Black Money Act was disregarded when the show cause notice was issued.
