Anil Ambani, chairman of the Reliance ADAG group, had been served with a show cause notice seeking to charge him with violating the Black Money Act. The Bombay High Court on Thursday extended until December 19 its earlier order directing the Income Tax department to not take any coercive action against him.
The Income Tax agency asked for extra time to prepare its affidavit in response to Ambani’s suit contesting the notice, and a division bench of Justices S V Gangapurwala and S G Dige granted the request. As a result, the order was prolonged. When the case was initially heard on September 26, the HC gave the tax department till November 17 to file its affidavit and instructed it to refrain from taking any coercive action against Ambani until then.
The department requested more time on Thursday, and the bench then postponed the issue until December 19. The court further stated that until then, it will uphold its previous ruling against coercion. Ambani received a warning from the I-T department on August 8, 2022, for allegedly avoiding taxes on undeclared money totaling more than Rs 814 crore stored in two Swiss bank accounts by Rs 420 crore.
Ambani was likely to be charged under Sections 50 and 51 of the Black Money (undisclosed foreign income and assets) Imposition of Tax Act of 2015, which carries a maximum penalty of 10 years in jail and a fine. Ambani (63), according to the government, ‘deliberately’ withheld information about his financial interests and overseas bank account information from Indian tax authorities. He has been charged with ‘wilful’ evasion.
The alleged transactions are from the assessment years 2006–2007 and 2010–2011, according to Ambani’s suit, which asserts that the Black Money Act was passed in 2015. Ambani was listed as a ‘economic contributor as well as beneficial owner’ of Northern Atlantic Trading Unlimited (NATU), a business formed in the British Virgin Islands, and Diamond Trust, a Bahamas-based organisation. These entities were both included in the I-T department’s notification (BVI).
The Narendra Modi administration enacted the Black Money Act shortly after it was first elected to office in 2014, and the department said Ambani ‘failed to disclose’ these overseas assets in his income tax return (ITR) filings and hence broke its rules. Tax authorities determined that the combined worth of the unreported cash in the two accounts was Rs. 8,14,27,95,784 (Rs. 814 crore), and the tax due on this sum was Rs. 4,20,29,04,040. (Rs 420 crore).