Undisclosed foreign assets and PMLA attachment: wilful tax evasion is a scheduled offence, and immediate attachment may proceed without prior complaint.

Wilful tax evasion relating to undisclosed foreign income and assets under the Black Money Act, 2015 was treated as a scheduled offence under the PMLA in its own right, without needing proof of cross-border implications under the general Part C definition. Provisional attachment under section 5(1) was held sustainable on recorded reasons and material in hand under the second proviso, even without a prior prosecution complaint or report, where immediate action was needed to prevent frustration of proceedings. The pre-existing origin of foreign assets did not bar action, because the operative focus remained the continuing non-disclosure after commencement of the Act.

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Issues: (i) Whether an offence under section 51 of the Black Money Act, 2015 can be treated as a scheduled offence without applying the separate requirement of cross-border implications under section 2(1)(ra) of the PMLA; (ii) Whether provisional attachment under section 5(1) of the PMLA could be sustained in the absence of a prior complaint or report for prosecution under the Black Money Act, 2015; (iii) Whether undisclosed foreign assets and income existing before the commencement of the Black Money Act, 2015 could still attract tax evasion and money-laundering consequences after the Act came into force.

Issue (i): Whether an offence under section 51 of the Black Money Act, 2015 can be treated as a scheduled offence without applying the separate requirement of cross-border implications under section 2(1)(ra) of the PMLA.

Analysis: Section 51 of the Black Money Act, 2015 criminalises wilful attempt to evade tax on undisclosed foreign income and assets. The scheduled offence was placed in Part C of the PMLA Schedule by a distinct insertion, and the reasoning treated this entry as independent of the earlier Part C entries that are conditioned by the phrase "offence of cross border implications." The definition in section 2(1)(ra) of the PMLA was held inapplicable to this particular scheduled offence because evasion of tax is not dependent on a transfer of proceeds out of India. Reading the entry otherwise would render the specific scheduled offence ineffective and redundant.

Conclusion: The offence under section 51 of the Black Money Act, 2015 is a scheduled offence in its own right and does not require proof of cross-border implications.

Issue (ii): Whether provisional attachment under section 5(1) of the PMLA could be sustained in the absence of a prior complaint or report for prosecution under the Black Money Act, 2015.

Analysis: Section 5(1) of the PMLA permits provisional attachment on the basis of material in possession and recorded reasons to believe. The first proviso generally refers to a report under section 173 of the Code of Criminal Procedure, 1973 or a complaint before a Magistrate, but the second proviso operates as an exception where immediate attachment is necessary to prevent frustration of proceedings. The decision applied the later proviso and held that provisional attachment could be made even without prior prosecution complaint, particularly where the material showed a continuing attempt to alienate foreign assets and frustrate enforcement action. The reliance on absence of a prosecution complaint was therefore held to be legally erroneous.

Conclusion: The provisional attachment was validly issued under the second proviso to section 5(1) of the PMLA notwithstanding the absence of a prior complaint or report.

Issue (iii): Whether undisclosed foreign assets and income existing before the commencement of the Black Money Act, 2015 could still attract tax evasion and money-laundering consequences after the Act came into force.

Analysis: Sections 3 and 4 of the Black Money Act, 2015 impose tax on undisclosed foreign income and assets for assessment years commencing on or after 1 April 2016 and define the scope of such undisclosed income and assets. The reasoning held that the statutory regime applied to non-disclosure after commencement even if the underlying assets or entities were created earlier. The focus was on the continuing failure to disclose taxable foreign income and assets in the relevant assessment year, not merely on the date of acquisition. Accordingly, the earlier existence of the assets did not defeat the statutory charge or the consequences under the PMLA framework.

Conclusion: The pre-existing nature of the foreign assets did not bar action under the Black Money Act, 2015 or the PMLA.

Final Conclusion: The impugned order was set aside and the provisional attachment order was confirmed, as the material on record established a prima facie case of wilful tax evasion involving undisclosed foreign assets and justified immediate attachment to prevent frustration of proceedings.

Ratio Decidendi: An offence of wilful tax evasion under the Black Money Act, 2015 is independently scheduled under the PMLA, and provisional attachment may be ordered on recorded reasons and material in hand under the second proviso to section 5(1) without awaiting prior prosecution, where immediate action is needed to prevent frustration of proceedings.

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