Case Law Details
Anila Rasiklal Mehta Vs Union of India (Bombay High Court)
Conclusion: Since assessee had not disclosed any black money or asset in the income tax proceedings going against him rather he had denied the same, therefore, while respondents may proceed pursuant to the impugned notices dated December 20, 2017 to assessee under Section 10(1) of the Black Money Act calling upon them to produce the details sought for in connection with the assessment for the assessment year 2017-18 under the Black Money Act however, no coercive measures might be taken against assessee if the occasion so arose.
Held: Authorities claimed that they had information that assessees along with another related person Mr. M were holding undisclosed foreign accounts in the name of body corporate registered in Singapore. According to assessees, the only foreign entity in which they had an interest was Sun Hill International Pvt. Limited, Singapore which factum was disclosed in the return filed by them before the income tax authorities. Inland Revenue Authority of Singapore sent some details / information to their Indian counterparts. On the basis of such information,authorities alleged that assessees held offshore accounts in foreign banks which were not disclosed in their income tax returns. In the meanwhile on 26.05.2015, President of India gave assent to the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (for short ‘the Black Money Act’) which was published in the Gazette of India on 27.05.2015 and came into force with effect from 01.04.2016. As per the clarifications issued by Circular, in cases where income tax proceedings were ongoing and information had been received by the income tax authorities on undisclosed foreign income and assets of Indian assessees, such assessees were not entitled to avail making of declaration and payment of tax and penalty in terms of Sections 59 to 61 of the Black Money Act. On 17.11.2015, a warrant under the Act was issued against assessees followed by a search and seizure operation on 2015 in their residential as well as business premises. It was contended by assessees that even after coming into force of the Black Money Act, authorities continued to proceed against the assessees under the Act. It was stated that alleged violations were of the assessment years 2008-09 and 2009-10 when the Black Money Act was not in force. On December 20, 2017, authorities issued impugned notices to assessee under Section 10(1) of the Black Money Act calling upon them to produce the details sought for in connection with the assessment for the assessment year 2017-18 under the Black Money Act. Thereafter DCIT, Mumbai passed assessment orders dated 30.12.2017 in respect of assessees under the Act. While passing the assessment order on reopening, reference was made to Section 4(3) of the Black Money Act to the effect that the income included in the total undisclosed foreign income and asset under the Black Money Act would not form part of the total income under the Act. It was mentioned that merit of escaped income was not gone through which was left to be decided by the authorities under the Black Money Act. Assessees alleged information was received by the respondents from the authorities in Singapore and British Virgin Islands pursuant to agreements entered into by respondent No.1 under Sections 90 or 90-A of the Act. Therefore, in the case of assessees Section 71(d)(iii) would apply and the benefit of Chapter VI of the Black Money Act comprising Sections 59 to 63 would be excluded. Thus, assessees were statutorily dis-entitled from making declaration under Sections 59 and 62 of the Black Money Act. This, it was contended, was highly arbitrary and discriminatory besides being violative of Articles 14 and 20 of the Constitution of India. It was asserted that impugned notices having been issued on December 20, 2017 long after initiation of proceedings against assessees under the Act, the Black Money Act would not be applicable in respect of assessees in view of Sections 70, 71 and 72 of the Act. it was evident that prior to issuance of the impugned notices dated December 20, 2017, assessees were subjected to proceedings under the Act though the income tax proceedings were concluded on December 30, 2017 to the effect that issue relating to escaped income was left to be decided by the authorities under the Black Money Act. It was also evident that income tax proceedings pertaining to assessees were reopened following receipt of information in respect of undisclosed asset by the competent authority in terms of agreements entered into by the Central Government under Section 90 or Section 90A of the Act. On the basis of such information, search and seizure operations were carried out in the premises of assessees under Section 132 of the Act leading to issuance of notice under Section 148 of the Act. Therefore, in terms of Clause (d) of Section 71, provisions of Chapter-VI would not be applicable in the case of the assessees. Therefore, unlike other persons in respect of whom the Black Money Act was sought to be made applicable, assessees and similar category of assessees under the Act would be statutorily barred from making a declaration in terms of Section 59 of the Black Money Act. This had been contended by the assessees to be highly arbitrary and discriminatory. It was held that in the income tax proceedings assessees had not disclosed any black money or asset; rather have denied the same. Thus, respondents might proceed pursuant to the impugned notices dated December 20, 2017, no coercive measures might be taken against assessees if the occasion so arose.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
Heard Mr. Ravi Kadam, learned senior counsel along with Mr. Ashish Kamat, Ms Cheryl Fernandes and Ms Anushka Shah, learned counsel for the writ petitioners; also heard Mr. Anil Singh, learned Additional Solicitor General of India along with Mr. Suresh Kumar, learned counsel for the respondents.
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