Supreme Court: Setting aside the Delhi High Court order any staying any action against Gautam Khaitan in a case relating to the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, the 3-judge bench of Arun Mishra, MR Shah and BR Gavai, JJ said that the interim order passed by the High Court is not sustainable in law.
The Court said,
“The penal provisions under Sections 50 and 51 of the Black Money Act would come into play only when an assessee has failed to take benefit of Section 59 and neither disclosed assets covered by the Black Money Act nor paid the tax and penalty thereon. As such, we find that the High Court was not right in holding that, by the notification/order impugned before it, the penal provisions were made retrospectively applicable.”
the scheme of the Black Money Act is to provide stringent measures for curbing the menace of black money. Various offences have been defined and stringent punishments have also been provided. However, the scheme of the Black Money Act also provided one-time opportunity to make a declaration in respect of any undisclosed asset located outside India and acquired from income chargeable to tax under the Income Tax Act. Section 59 of the Black Money Act provided that such a declaration was to be made on or after the date of commencement of the Black Money Act, but on or before a date notified by the Central Government in the Official Gazette.
After going through various provisions of the Black Money Act, the Court said that a conjoint reading of the various provisions would reveal, that the Assessing Officer can charge the taxes only from the assessment year commencing on or after 01.04.2016. However, the value of the said asset has to be as per its valuation in the previous year. As such, even if there was no change of date in subsection (3) of Section 1 of the Black Money Act, the value of the asset was to be determined as per its valuation in the previous year. The date has been changed only for the purpose of enabling the assessee(s) to take benefit of Section 59 of the Black Money Act. The power has been exercised only in order to remove difficulties.
The Court, hence, noticed that the penal provisions under Sections 50 and 51 of the Black Money Act would come into play only when an assessee has failed to take benefit of Section 59 and neither disclosed assets covered by the Black Money Act nor paid the tax and penalty thereon.
The Court, however, concluded by saying that
“in any case, in the factual scenario of the present case, it would reveal, that the assessment year in consideration was 20192020 and the previous year relevant to the assessment year was the year ending on 31.03.2019.”
The Court, hence, asked the High Court to consider the matter afresh.
Gautam Khaitan is one of the accused in Rs. 3600 crore AgustaWestland VVIP chopper scam. He had challenged the legality of various provisions of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 before the Delhi High Court.
[Union of India v. Gautam Khaitan, 2019 SCC OnLine SC 1342, decided on 15.10.2019]
