Bombay HC grants interim relief to Anil Ambani in Tax Evasion

The Bombay High Court on Friday asked the Income Tax Department not to take any action on penalty notices issued against Anil Ambani, chairman of Reliance (ADA) Group, in connection with income tax proceedings filed against him till March 17.

When Ambani’s plea to overturn a show-cause notice given to him under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, was being heard, bench panel of Justices G S Patel and Neela Gokhale made the decision.

He has received a show-cause notice from the Income Tax Department for allegedly evading taxes in the amount of 420 crore. In support of Mr. Ambani, senior attorney Rafique Dada informed the court on Friday that the Income Tax administration had issued penalty notifications in addition to the show-cause notice.

He requested permission to amend the petition as well as to contest the penalty notifications. The court approved it and ordered the IT department to wait to act until the March 17 hearing.

Earlier, on September 26, 2022, the High Court granted Mr. Ambani ad-interim protection to shield him from any coercive action over the show-cause notice.

The Income Tax Department had issued the notice to Ambani on August 9, 2022, for allegedly evading Rs.420 crores in taxes on undisclosed funds worth more than Rs.814 crores held in Swiss Bank accounts.

In accordance with the notification, Mr. Ambani was subject to prosecution under sections 50 and 51 of the Black Money (Undisclosed Foreign Income and Assets) Imposition of Tax Act of 2015, which provides for a maximum sentence of 10 years in prison and a fine.

The government claimed that Mr. Ambani “deliberately” withheld information about his offshore bank accounts and accused him of “wilful” evasion.

Anil Ambani said in his petition that the alleged transactions took place in the assessment years of 2006–2007 and 2010–2011, while the Black Money Act was first passed in 2015.