The Calcutta High Court has held prosecuting a person under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (Black Money Act) during the pendency of penalty proceedings under the Income Tax Act 1961 will not amount to double jeopardy.
The Court was considering a writ petition challenging the sanction granted to prosecute the petitioner under the Sections 50 and 51 of the Black Money Act for concealing foreign assets.
The petitioner contended that penalty proceedings under Sections 271(1)(b) and 271(1)(c) of the Income Tax Act were pending against him, in furtherance of notice under Section 153A of the Act, which led to discovery of his foreign assets.
The Black Money Act came into effect from April 1, 2016, and it cannot be given retrospective effect, he contended. His further contention was that as per Section 71 of the Black Money Act, it will not apply if notice proceedings under Section 153A of Income Tax Act were pending. The pendency of proceedings under Income Tax Act prevented him from making voluntary disclosure under Black Money Act, he tried to justify. He further advanced that continuation of proceedings under both the Acts would amount to double jeopardy.
The Department opposed the contentions stating that the proceedings under Black Money Act were on a different cause viz, suppression of foreign assets, and were distinct from penalty proceedings under the Income Tax Act.
Rejecting the contentions of the petitioner, Justice Debangu Basak held that there was no retrospective application of Black Money Act, as it sought to punish failure to disclose foreign assets after the commencement of the Act. Also, the pendency of notice proceedings under Section 153A of the Income Tax Act will exclude Black Money Act only in relation to Chapter VI of it, as clear from Section 71, and other Chapters will be unaffected.
The single judge further noted that penalty proceedings under Income Tax Act did not require mens rea, and did not impose punishment of imprisonment.
"the Act of 1961 does not impose a punishment of imprisonment while the Act of 2015 does. In such circumstances, it cannot be said that, the petitioner has been sought to be punished twice for the same offence", observed the judgment.