Aastha Thakur
Published on: 26 September 2022 at 21:09 IST
Anil Ambani, the chairman of Reliance ADA Group, was given temporary reprieve by the Bombay High Court on Monday, and it stopped the Income Tax Department from taking enforcement action against him for allegedly failing to disclose funds in two Swiss bank accounts totaling over Rs. 814 crore.
Under Sections 50 and 51 of the , 2015 (BM Act), show cause letters were issued on August 8, 2022, accusing almost Rs. 420 crores in tax evasion.
Justices SV Gangapurwala and RN Laddha division bench noted that many High Courts, including the Bombay High Court, were now hearing petitions questioning the Act’s prospective application.
The show cause notice and the assessment notice that are currently before the appellate body are verbatim, according to senior attorney Rafiq Dada on behalf of Ambani. Furthermore, the prosecution of his client for alleged transactions between 2006 and 2012 was inconceivable given that the Act was only put into effect in 2015.
The prosecution asserts that they have already filed the response to the show cause notice and in return filed for various documents.
After asking the IT counsel for further time to respond but receiving no response, Justice Gangapurwala requested the response on retrospective applicability.
In addition to asking for the notice to be revoked, Ambani has argued that Section 3(1) and the Sections 50, 51, 59, and 72C of the BM Act, which permit retrospective application, are extra vires and in violation of Articles 14, 20, and 21 of the Constitution. The petition states that –
“That provisions of the BM Act, which came into force with effect from 1st July 2015, cannot be invoked retrospectively to tax the value of any alleged undisclosed foreign asset, which may have existed prior to its coming into force on 1st July 2015,”
According to an order made in March of this year by the Assessing Officer under to Section 10(3) of the BM Act, Ambani had unreported overseas assets. Ambani appealed the assessment order from the 31/03/22 before the Commissioner of Income Tax (Appeals).
The notifications to prosecute Ambani under the Act were issued by the IT department on August 8 in the meantime.