The Delhi High Court has declined to entertain writ petitions challenging provisions of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, holding that the late challenge was an attempt to avoid prosecution. The ruling in Rajendra Prasad Nargis v. Union of India and connected matters, by a Bench of Justice Dinesh Mehta and Justice Rajneesh Kumar Gupta, was reported on 13 August 2026.
What was decided
The petitioners challenged the proviso to Section 3(1) and clause (c) of Section 72 of the 2015 Act as arbitrary and retrospective, and as violating Articles 14, 265 and 300A of the Constitution. They argued that the foreign assets in question were acquired before the Act was enacted.
The Court noted that the petitioners had earlier challenged the assessment order, withdrawn those writs with liberty, and later challenged penalty proceedings only under Sections 41 and 43, without raising retrospectivity. Applying the principle of Order II Rule 2 of the Code of Civil Procedure, it held that an obvious ground available earlier could not be raised in a fresh round. It described the petitions as a “subterfuge to obviate prosecution” and imposed costs of Rs 20,000 on each petitioner, Rs 60,000 in all. The Court expressly made no finding on the validity of the provisions or the legality of the prosecution, and left the petitioners free to pursue other remedies.
Why it matters
Black Money Act cases usually move in stages: assessment, penalty and prosecution. This ruling shows that courts may refuse to hear a constitutional challenge that is held back and raised only when prosecution is imminent. The legal question on retrospective application is not closed; the Karnataka High Court in 2024 quashed prosecutions relating to pre-Act conduct. What the Delhi High Court addressed is timing and the manner of raising pleas.
For individuals with overseas accounts, property or company interests, the first notice is the point at which the full line of defence should be mapped.
Practical points
- On receiving a Black Money Act notice, identify every available ground, including dates of acquisition and constitutional objections, at the outset.
- Avoid withdrawing a writ without carefully recording the liberty granted and the pleas reserved.
- Treat assessment, penalty and prosecution as linked proceedings; positions taken in one may affect the others.
- Keep documentary proof of the source and timing of foreign assets.
Sources: LiveLaw, 13 Aug 2026; LiveLaw, 25 Jun 2024.
For a confidential discussion on Black Money Act notices and prosecution, see Income-tax Search & Seizure Lawyer.
General legal information only; not legal advice or solicitation.
