The Supreme Court’s order came on an appeal filed by the Union of India against the order of the Delhi High Court.
The three-Judge bench comprising of Justice Arun Mishra, Justice M.R Shah, and Justice B.R Gavai observed that, Section 3 provides that tax shall be charged on every assessee for every assessment year commencing on or after the 1st day of April, 2016 in respect of his total undisclosed foreign income and assets of the previous year. The rate of the said tax has been quantified at thirty per cent. The proviso to sub-section (1) of Section 3 of the Black Money Act provides, that undisclosed assets located outside India shall be charged to tax on its value in the previous year in which such asset comes to the notice of the Assessing Officer.
It would further be relevant to note that sub¬section (3) of Section 1 of the Black Money Act, itself provides that save as otherwise provided in this Act, it shall come into force on 1st day of July, 2015. A conjoint reading of the various provisions would reveal, that the Assessing Officer can charge the taxes only from the assessment year commencing on or after 01.04.2016. However, the value of the said asset has to be as per its valuation in the previous year. As such, even if there was no change of date in sub-section (3) of Section 1 of the Black Money Act, the value of the asset was to be determined as per its valuation in the previous year. The date has been changed only for the purpose of enabling the assessee(s) to take benefit of Section 59 of the Black Money Act. The power has been exercised only in order to remove difficulties. The penal provisions under Sections 50 and 51 of the Black Money Act would come into play only when an assessee has failed to take benefit of Section 59 and neither disclosed assets covered by the Black Money Act nor paid the tax and penalty thereon. As such, we find that the High Court was not right in holding that, by the notification/order impugned before it, the penal provisions were made retrospectively applicable.
While quashing the Delhi High Court order, the Supreme Court observed that, “The High Court is requested to decide the writ petition on its own merits. However, we clarify that the observations made by us are only for the purposes of examining the correctness of the interim order passed by the High Court and the High Court would decide the writ petition uninfluenced by the same”.Subscribe Taxscan AdFree to view the Judgment