Black money law: Govt moves SC against stay on proceedings against Khaitan

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Published: May 21, 2019 12:51:49 AM

Khaitan argued that the amendment to Section 1(3) to state that the Act would come into force from July 1, 2015, instead of April 1, 2016, was done in exercise of power under Section 86 of the Act.

Black money, Black money law, supreme court, Khaitan,Black Money Act, industry newsKhaitan is one of the accused in the Rs 3,600-crore AgustaWestland chopper scam case and is currently on bail. (Reuters)

In a case related to retrospective applicability of the Black Money Act (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, the government on Monday moved the Supreme Court against the Delhi High Court’s order that stayed the proceedings against advocate Gautam Khaitan under the Act.
Khaitan is one of the accused in the Rs 3,600-crore AgustaWestland chopper scam case and is currently on bail.
A vacation bench led by Justice Indira Banerjee agreed to hear the case on Tuesday after solicitor general Tushar Mehta mentioned the matter for urgent hearing, saying that the HC ruling would “affect all ongoing cases under the Black Money Act.”

The HC had restrained the Centre and the income tax department from taking any further action against Khaitan, who had challenged various sections of the Act on the ground that the government’s notification that declared the date of enforcement of the Black Money Act as July 1, 2015 was ultra vires the Act itself.
The HC on May 16 stayed the proceedings against Khaitan under the Act, stating that he had made out a good prima facie case for grant of interim stay.

Khaitan argued that the amendment to Section 1(3) to state that the Act would come into force from July 1, 2015, instead of April 1, 2016, was done in exercise of power under Section 86 of the Act. Since Section 86 was yet to be in operation, the Centre could not have exercised power under it.

The HC had agreed with his contention, saying the Centre could not, prior to the Act coming into force, alter the date on which the enactment came into force by exercising the powers under the Act.
Khaitan had also challenged the I-T department’s January 22 order granting sanction to lodge a criminal complaint against him under Section 51 of the Act which provides for jail term between 3 to 10 years if found guilty of wilfully attempting to evade tax.

He argued that the the assessing officer was “not entitled to charge tax on a foreign undisclosed asset, which ceased to exist prior to the Act coming into force, only on the ground that such asset came to the notice of the assessing officer after the Act came into force.”
However, the tax department had opposed the contention saying that when there was an undisclosed foreign asset, there was no need to wait for completion of the assessment.

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