IMPORTANT POINT
If any undisclosed asset outside India comes to the notice of assessing officer on 01.04.2016, he could charge such asset(s) on the basis of its value as would be ascertained in a previous year ending on 31.03.2016.

JUDGMENT :

B.R. GAVAI, J.

Leave granted.

2. The present appeal challenges the interim order passed by the Division Bench of the Delhi High Court in Writ Petition (Crl.) No. 618 of 2019 dated 16.05.2019 thereby, restraining the appellants herein from taking and/or continuing any action against the writ petitioner (respondent herein) pursuant to the Order dated 22.01.2019 under Section 55 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (hereinafter referred to as the “Black Money Act”) passed by Appellant No. 2 herein.

3. We have heard Mr. Tushar Mehta, learned Solicitor General appearing on behalf of the appellants, and Mr. P.V. Kapur, learned senior counsel appearing on behalf of the sole respondent.

4. The short question that falls for consideration is, as to whether the High Court was right in observing that while exercise of the powers under the provisions of Sections 85 and 86 of the Black Money Act, the Central Government has made the said Act retrospectively applicable from 01.07.2015 and passed a restraint order.

5. From the Statement of Objects and Reasons, it could be seen that the Black Money Act has been enacted for the following purposes :

(a) To unearth the black money stashed in foreign countries; and

(b) To prevent unaccounted money going abroad.

(c) To punish the persons indulging in illegitimate means of generating money causing loss to the revenue

(d) To prevent illegitimate income and assets kept outside the country from being utilised in ways which are detrimental to India’s social, economic and strategic interest and its national security.

6. The Black Money Act has been passed by the Parliament on 11.05.2015 and it has received Presidential assent on 26.05.2015. Sub-section (3) of Section 1 provides, that save as otherwise provided in the said Act, it shall come into force on the 1st day of April, 2016. However, by the notification/order notified on 01.07.2015, which have been impugned before the High Court, it has been provided, that the Black Money Act shall come into force on 01.07.2015, i.e., the date on which the order is issued under the provisions of sub-section (1) of Section 86 of the Black Money Act.

7. It will be relevant to refer to Section 3 of the Black Money Act, which is a charging section.

“3. Charge of Tax - (1) There shall be charged on every assessee for every assessment year commencing on or after the 1st day of April, 2016, subject to the provisions of this Act, a tax in respect of his total undisclosed foreign income and asset of the previous year at the rate of thirty per cent of such undisclosed income and asset:

Provided that an undisclosed asset 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.

(2) For the purposes of this section, “value of an undisclosed asset” means the fair market value of an asset (including financial interest in any entity) determined in such manner as may be prescribed.”

8. It could thus be seen, 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.

9. It could thus clearly be seen, that the proviso to sub-section (1) of Section 3 of the Black Money Act, makes it clear that the undisclosed asset located outside India shall be charged to tax on its value in previous year in which, such an asset comes to the notice of Assessing Officer. Clause (9) of Section 2 of the Black Money Act defines “previous year”. Four different definitions have been given in sub-clau