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2020 (3) TMI 610 - HC - Income TaxReopening of assessment u/s 147 - Unable to make declaration u/s 59 of the Black Money Act - undisclosed foreign accounts - window of opportunity given to an assessee under Sections 59 to 63 of the Black Money Act to make a declaration of undisclosed foreign income and assets which is not available to an assessee who is already facing a proceeding under the Act - HELD THAT:- Prior to issuance of the impugned notices dated December 20, 2017, petitioners were subjected to proceedings under the Act though the income tax proceedings were concluded on December 30, 2017 to the effect that issue relating to escaped income was left to be decided by the authorities under the Black Money Act. It is also evident that income tax proceedings pertaining to the petitioners were reopened following receipt of information in respect of undisclosed asset by the competent authority in terms of agreements entered into by the Central Government under Section 90 or Section 90A of the Act. On the basis of such information, search and seizure operations were carried out in the premises of the petitioners under Section 132 of the Act leading to issuance of notice under Section 148 of the Act. Therefore, in terms of Clause (d) of Section 71, provisions of Chapter-VI would not be applicable in the case of the petitioners. This position has also been clarified by the departmental circulars. Therefore, unlike other persons in respect of whom the Black Money Act is sought to be made applicable, petitioners and similar category of assessees under the Act would be statutorily barred from making a declaration in terms of Section 59 of the Black Money Act. This has been contended by the petitioners to be highly arbitrary and discriminatory. This Court on 08.10.2018 had admitted the writ petition for hearing by issuing rule observing that arguable questions have been raised. Admittedly, when rule is issued, it presupposes existence of a prima facie case; in the absence of which rule is not ordinarily issued by the Court. Evidently, provisions of the Black Money Act are extremely severe having stringent penalty provisions and also leading to offences and prosecutions. Therefore, to enable a person to come clean and to shield himself from the rigours of the said Black Money Act, a small window is provided in Section 59 to make a declaration of such undisclosed foreign income and asset. The window was for the period upto 30th day of September, 2015. According to the petitioners, they were statutorily debarred from making a declaration under Section 59 in view of Section 71 (d). Respondents have taken the stand that such contention of the petitioners is hypothetical inasmuch as petitioners never admitted having any undisclosed foreign asset and continue to deny the same till date. According to the respondents, this contention is of academic interest only as even in the income tax proceedings, petitioners never admitted that they had undisclosed foreign asset. That apart, a reading of Section 72 (c) may indicate that provisions of the Black Money Act have been given retrospective operation. This is also a highly debatable issue since the Black Money Act contains provisions for imposition of penalty and for initiation of prosecution. There is always a presumption as to constitutionality of a statute and the burden lies heavily on him who challenges the constitutionality - we feel that while respondents may proceed pursuant to the impugned notices dated December 20, 2017, no coercive measures may be taken against the petitioners if the occasion so arises.
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