2024 (7) TMI 588 - HC - Income Tax

Anticipatory bail granted to accused charged under Section 3(1) Black Money Act for undisclosed foreign assets

Sanjay Vijay Shinde Versus Directorate General of Income Tax

Sanjay Vijay Shinde Versus Directorate General of Income Tax - [2025] 477 ITR 328 Issues Involved: Anticipatory Bail, Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, Sections 50 and 51, Income Tax Act, 1961, Section 132, Non-disclosure of Foreign Assets, Retrospective Application of Law, Custodial Interrogation.Issue-wise Detailed Analysis:1. Anticipatory Bail under Section 438 of Cr.P.C.:The applicant sought anticipatory bail under Section 438 of the Cr.P.C. due to the apprehension of arrest in connection with case No.5575/2021 for offences under Sections 50 and 51 of the Black Money Act, 2015. The court, after hearing the arguments and considering the material and evidence on record, granted anticipatory bail to the applicant. The court directed that in the event of arrest or surrender, the applicant be released on bail on furnishing a personal bond of Rs. 5,00,000/- with one solvent surety of the like amount.2. Offences under Sections 50 and 51 of the Black Money Act, 2015:The prosecution alleged that the applicant, an Indian resident, failed to disclose foreign assets in the Income Tax returns as required under Section 50 of the Black Money Act, 2015. The applicant was accused of willful evasion of tax under Section 51 of the Act. The court noted that the applicant's foreign bank account and assets were not disclosed in the ITRs for the relevant assessment years, and the applicant had denied having any foreign accounts during the investigation.3. Non-disclosure of Foreign Assets:The prosecution argued that the applicant did not disclose his foreign bank account and assets in the Income Tax returns for the assessment years 2009-10 to 2015-16. The applicant contended that the Black Money Act, 2015, was not applicable retrospectively to the financial years 2008-09 to 2013-14, and it was not necessary to disclose foreign income or assets before the Act came into force on 01.04.2016.4. Retrospective Application of the Black Money Act, 2015:The applicant argued that the Black Money Act, 2015, does not have retrospective application and that the foreign assets were closed before the Act came into force. The prosecution countered that under Section 3 of the Black Money Act, undisclosed foreign assets are taxable in the year they come to the notice of the Assessing Officer, irrespective of when they were created or whether they still existed.5. Custodial Interrogation:The applicant's counsel argued that there was no need for custodial interrogation and that the applicant was ready to cooperate with the trial and furnish adequate surety. The court, considering the arguments, directed the applicant to cooperate with the Income Tax Department in the investigation and abide by specific conditions, including making himself available for interrogation, not making any inducements or threats to witnesses, not leaving India without the trial court's permission, and not committing similar offences.6. Similar Case References:The applicant's counsel referred to a similar case where the High Court of Karnataka quashed criminal proceedings initiated by the Income Tax Department. The prosecution cited the case of Union of India and Others Vs. Gautam Kahaitan, where the Delhi High Court held that the Black Money Act's provisions apply retrospectively from 01.07.2015, and the Supreme Court upheld this view.Conclusion:The court, after considering the submissions and evidence, granted anticipatory bail to the applicant with specific conditions to ensure cooperation with the investigation and prevent any interference with the witnesses or evidence. The court emphasized the need for the applicant to abide by the conditions imposed and directed the applicant to surrender his passport and not leave India without permission from the trial court.