Delhi HC issues notice in plea assailing provisions of Black Money Act, 2015

The Delhi High Court today issued notice in a petition assailing several provisions of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015..The provisions under challenge include Sections 10 (1), 48(2), 51, 54 and 80 of the Act. The petition also seeks a declaration that Section 51 of the Act is applicable only prospectively. Additionally, the petition also prays for an order that the proviso to Section 3 (1) of the Act does not entitle the Assessing Officer to charge tax on the foreign undisclosed asset, which ceased to exist prior to the Act coming into force..Notice was issued to the Central government by a Division Bench headed by Justice Siddharth Mridul in a petition preferred by Gautam Khaitan..Khaitan, who is a lawyer by profession, was arrested by the Enforcement Directorate under the Act, on January 26. He is currently in judicial custody at Tihar jail..It is Khaitan’s case that he is facing a probe for allegedly not disclosing foreign income and assets held outside India for a time period prior to the Act coming into force..In his petition filed through OP Khaitan & Co., Khaitan has challenged Section 51 of the Act for giving “unbridled, um-canalized and arbitrary discretion” to theaAuthorities to adopt recourse either under the Black Money Act or Section 276C of the Income Tax Act. Both the Sections deal with punishment for an attempt to evade tax. Since there are no guidelines on the issue, such discretion is violative of Articles 14, 20 and 21 of the Constitution of India, the petition states..Khaitan has also challenged Section 10 (1) for not providing for any period of limitation to issue notice under the Act. He has further assailed Section 48 (2) on the touchstone of Articles 14, 19 and 21 for failing to provide any safeguard in a criminal action of prosecution under the Act..Section 54 of the Act, which provides for the Court to presume the existence of culpable mental state on the part of the accused, has also been challenged. Khaitan claims that the onus is always upon the prosecution to prove its case ‘beyond reasonable doubt’..It also argues that although Section 80 deals with “cognizance of offence”, the Act does not provide the procedure to be adopted. Such absence of procedure militates against Article 21 of the Constitution of India, it is submitted..The petition also claims that the Centre’s notification declaring the date of enforcement of the Act is ultra vires the Act and hence null and void..It is submitted that the amendment to Section 1(3) to state that the Act would come into force from July 1, 2015, 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..Furthermore, the Imposition of Tax Rules, 2015 is also being assailed for being null and void..Khaitan was represented by Senior Advocate Sidharth Luthra with Advocate PK Dubey..The Centre was represented by CGSC Amit Mahajan..The matter will next be heard on April 10..Read the Petition: