Black Money Act notices could not continue after prior disclosure and settlement under the income-tax settlement framework.

Notices under Section 10(1) of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 could not be sustained where the petitioners had already disclosed the assets and income in returns filed before 1 July 2015 and their disputes were later settled under Chapter XIX-A of the Income-tax Act, 1961. The High Court treated the subsequent acceptance by the settlement mechanism, together with departmental effect to that settlement and the compliance window noted in Circular No. 12 of 2015, as decisive. The Act was held to target undisclosed foreign assets not already brought within the earlier tax-disclosure framework, so the notices could not continue.

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Issues: Whether the notices issued under Section 10(1) of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 could be permitted to continue after the petitioners' returns had been filed before the Black Money Act came into force and the disputes had subsequently been settled under Chapter XIX-A of the Income-tax Act, 1961.

Analysis: The petitions arose from notices issued under the Black Money Act in respect of assets and income that had already been disclosed in returns filed before 01.07.2015, the date on which that Act came into force. The record showed that the petitioners had earlier been proceeded against under Sections 131 and 148 of the Income-tax Act, 1961, had pursued settlement before the Settlement Commission, and, after further proceedings and appellate litigation, their cases were accepted by the Interim Board of Settlement-II on 26.08.2022. The Department also gave effect to that settlement. In this setting, the Court treated the later settlement as a decisive subsequent development and relied on the statutory compliance window explained in Circular No. 12 of 2015 to hold that the Black Money Act was aimed at undisclosed foreign assets not previously brought to tax disclosure, not at cases already settled under the Income-tax Act framework.

Conclusion: The notices under Section 10(1) of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 could not be continued, and the petitioners succeeded.

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