Bombay HC shields Anil Ambani from prosecution in ₹420-crore Black Money Act case, admits constitutional challenge

The Bombay High Court has granted interim protection to industrialist Anil Ambani in a case involving alleged tax evasion of about ₹420 crore under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, while agreeing to examine the constitutional validity of certain provisions of the law.

A division bench of Justices B.P. Colabawalla and Firdosh P. Pooniwalla on June 8 agreed to hear Anil Ambani's challenge to certain provisions of the Black Money Act, which he contends are unconstitutional. The court noted that similar petitions raising comparable questions are already pending before it.

The bench directed the Union government and other respondents to file their replies within four weeks.

No prosecution, penalty during pendency of case

While allowing tax proceedings to continue, the court protected Ambani from enforcement action until the petition is finally decided.

"As far as interim relief is concerned, we direct that since the Assessment Order is already passed, and the Petitioner has already filed an Appeal before the CIT(A), the said Appeal can proceed and orders can be passed thereon," the court said.

However, it added that "no coercive action shall be taken against the Petitioner, including that of prosecution and penalty, till the hearing and final disposal of this Writ Petition."

The court also directed that Ambani's petition be heard along with three other writ petitions raising similar questions regarding the Black Money Act.

Case relates to alleged undisclosed foreign assets

According to tax authorities, Anil Ambani allegedly failed to disclose foreign assets and bank accounts linked to offshore entities, resulting in an alleged tax liability of around ₹420 crore under the Black Money Act. The proceedings are understood to involve foreign assets valued at more than ₹800 crore.

A central issue in the litigation is the applicability of provisions of the Black Money Act to assets and transactions that allegedly pre-date the law's enactment in 2015, an issue that has been challenged in multiple petitions before the Bombay High Court.

Wider legal scrutiny continues

The relief comes even as Ambani faces scrutiny in several other investigations involving Reliance Group entities.

The Central Bureau of Investigation (CBI) is probing alleged loan diversion and bank fraud cases involving Reliance Communications, including complaints by State Bank of India and Bank of Baroda. The Enforcement Directorate (ED) is also pursuing multiple money-laundering investigations linked to Reliance Group companies and has attached assets worth over ₹19,000 crore in related cases.

However, those investigations are separate from the Black Money Act proceedings currently before the Bombay High Court. END