Bombay HC Issues Rule, Bars Coercive Action Against Anil Ambani in Black Money Act Challenge

The Bombay High Court has issued Rule and shielded Anil Ambani from prosecution and penalty while his constitutional challenge to the Black Money Act proceeds to hearing.

A Division Bench of the Bombay High Court, comprising Justice B. P. Colabawalla and Justice Firdosh P. Pooniwalla, on 8 June 2026 issued Rule in Writ Petition No. 5321 of 2022 filed by Anil Dhirajlal Ambani. The petition challenges certain provisions of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 as being ultra vires the Constitution of India. Alongside issuing Rule, the bench directed that no coercive action — including prosecution and penalty — shall be taken against the petitioner until the writ petition is finally disposed of. The matter has been clubbed with three other writ petitions raising the same or similar constitutional questions.

The Challenge Before the Court

Anil Ambani's writ petition targets specific provisions of the Black Money Act, 2015. The Act imposes tax on undisclosed foreign income and assets held by Indian residents. The petitioner's case is that the provisions under challenge are constitutionally invalid.

The bench was informed that the constitutional validity of certain provisions of the Black Money Act had already been challenged in other writ petitions before the same court, in which Rule had been issued and interim relief granted. That context shaped the bench's approach to both the admission of this petition and the interim protection it fashioned.

Mr. Prakash D. Shah, Senior Advocate, appeared with Mr. Mufaddal Paperwala and Ms. Prerana Wagh, instructed by M/s. Crawford Bayley & Co., for the petitioner. Mr. Akhileshwar Sharma appeared for all the respondents, including the Union of India.

Interim Relief: Appeal Permitted, Coercion Prohibited

By the time the matter came up before the Division Bench, an Assessment Order under the Black Money Act had already been passed against the petitioner. Ambani had filed an appeal before the Commissioner of Income Tax (Appeals) — the CIT(A) — against that order.

The bench allowed the appeal before the CIT(A) to proceed and permitted orders to be passed in it. At the same time, the court drew a clear line: no coercive action, specifically including prosecution and penalty, shall be taken against the petitioner pending the hearing and final disposal of the writ petition.

This formulation is significant. The bench did not freeze the appellate process in the tax hierarchy; it left that channel open. What it closed off was any enforcement step that could visit penal consequences on the petitioner while the constitutional questions remain open.

Clubbing With Earlier Petitions

The bench directed that Writ Petition No. 5321 of 2022 be heard together with three earlier petitions: Writ Petition No. 1300 of 2018, Writ Petition No. 965 of 2019, and Writ Petition No. 3559 of 2025. All four petitions raise the same or similar issues concerning the constitutional validity of provisions of the Black Money Act.

The respondents were directed to file their affidavit in reply within four weeks from 8 June 2026 and to serve a copy on the advocates for the petitioner. Mr. Sharma, appearing for the respondents, waived service of the Rule.

Outcome

Rule issued in Writ Petition No. 5321 of 2022. Respondents directed to file reply affidavit within four weeks. The appeal before the CIT(A) may proceed and orders may be passed thereon. No coercive action, including prosecution or penalty, to be taken against the petitioner till hearing and final disposal of the writ petition. The petition to be heard along with Writ Petition Nos. 1300 of 2018, 965 of 2019, and 3559 of 2025.