Whether prosecution can be initiated for transactions prior to enactment of Black Money Act, 2015?

Respected Members

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[2024] 466 ITR 1 (Kar)

[IN THE KARNATAKA HIGH COURT — DHARWAD BENCH]

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1. SMT. DHANASHREE RAVINDRA PANDIT

(Criminal Petition Nos. 101368 and 101369 of 2019)

2. SMT. MANGAL ARVIND GOGTE

(Criminal Petition Nos. 101370 and 101371 of 2019)

3. ARVIND BALKRISHNA GOGTE

(Criminal Petition Nos. 101372 and 101373 of 2019)

4. MADHAV ARAVIND GOGTE

(Criminal Petition Nos. 101374 and 101375 of 2019)

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INCOME-TAX DEPARTMENT

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M. NAGAPRASANNA J.

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June 7, 2024.

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1. The assessee were members of the same family and directors of the two companies which were incorporated and closed in somewhere in 2008, 2009 & 2010.

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2. The Department invoked the provisions of section 72 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of tax Act, 2015 and registered a complaint against the assessee invoking section 200 of the Code of Criminal Procedure, 1973 on the ground that the bank in Singapore in its statement had divulged that the assessee in the year 2009-10 had deposited US$ 16,000 and US$ 40,000 in two different transactions and which was an offence u/s 50 & 52 of the Act.

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3. On criminal petition, held allowing the petitions that at the relevant point in time when the amounts were alleged to have been deposited by the assessee in the bank in Singapore in the year 2009-10, the Black Money Act, 2015 was not in existence and came into effect only on 01.07.2015.

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4. A special enactment is a statute, whereas the Constitution of India is not a statute, but the fountain head of all the statutes including the special statute.

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5. Article 20 comes under Chapter III of the Constitution of India, a fundamental right, which makes it a fundamental right to a person who would be convicted of an offence except for violation of law in force at the time of commission of the act charged as an offence, not to be subjected to a penalty greater than that which might have been inflicted under the law in force.

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6. The prosecution initiated against these assessees did not and could not pass constitutional muster under article 20 of the Constitution of India.

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7. Non-disclosure in an assessment of the tax return for the year 2007-08 or 2009-10 could not be used to prosecute the assessees, under an Act that had come into force in the year 2015.

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8. The law, as on the date alleged, was not the law of such disclosure of assessment.

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9. Therefore, on the facts, the criminal law could not be set into motion against the assessees.

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10. Therefore, criminal proceedings pending before the Additional Judicial Magistrate were quashed.