Is the constitutional validity of the Black Money Act actually under challenge anywhere, and has anyone got a stay of an assessment under it?
Yes, in the Bombay High Court. On 2 July 2026 the Court issued Rule on a petition challenging provisions of the Act as ultra vires the Constitution, stayed the assessment order dated 25 March 2023 passed under s.10(3) and the notice of demand of the same date issued under s.13, and restrained coercive action including prosecution and penalty until the hearing and final disposal. Nothing was decided on the merits.
Decided by the High Court (B.P. Colabawalla J and Firdosh P. Pooniwalla J) on 2026-07-02, reported as Writ Petition No. 1950 of 2023, High Court of Judicature at Bombay. It bears on section BMA s.10(3), section BMA s.13 of the Income Tax Act 1961, in Assessment & Scrutiny and How Tax Law Is Read matters.
It tells a practitioner two useful things at once: that a group of petitions challenging the Act's validity is pending in the Bombay High Court with Rule issued, and that interim protection extending to the assessment order, the demand and prosecution has been granted in that group. That is the realistic yardstick for advising a client whether to file.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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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 (para 1). It was brought to the Court's notice that the constitutional validity of certain provisions of the Act had been challenged in other writ petitions as well, in which Rule had already been issued and interim relief granted (para 2). On the facts of this petition, an assessment order had been passed on 25 March 2023 under s.10(3) of the Act and a notice of demand issued on the same date under s.13.
Rule was issued (para 3) and the respondents were directed to file affidavits within four weeks (para 4). Interim relief was granted in terms of two prayer clauses, staying the operation of the assessment order dated 25 March 2023 passed under s.10(3) and all proceedings consequent to it, and staying the operation of the notice of demand dated 25 March 2023 issued under s.13 and consequential action (para 5). The Court further directed that 'no coercive action shall be taken against the Petitioner including that of prosecution and penalty till the hearing and final disposal' (para 6). The petition was directed to be heard along with Writ Petition No. 1300 of 2018, Writ Petition No. 965 of 2019 and Writ Petition No. 3559 of 2025 and other connected petitions raising the same or similar issues (para 7).
The order proceeds on the existence of the earlier group. Having recorded that the constitutional validity of provisions of the Act stands challenged in other petitions in which Rule has been issued and interim relief granted, the Court issued Rule here 'in these circumstances' (paras 2 and 3) and granted interim relief in the same shape. No reasons were given on the substance of the constitutional challenge and none were called for at this stage.
no coercive action shall be taken against the Petitioner including that of prosecution and penalty
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Handle my notice → Ask a CA on WhatsAppYes, in the Bombay High Court. On 2 July 2026 the Court issued Rule on a petition challenging provisions of the Act as ultra vires the Constitution, stayed the assessment order dated 25 March 2023 passed under s.10(3) and the notice of demand of the same date issued under s.13, and restrained coercive action including prosecution and penalty until the hearing and final disposal. Nothing was decided on the merits. This was decided by the High Court (B.P. Colabawalla J and Firdosh P. Pooniwalla J) and bears on section BMA s.10(3), section BMA s.13 of the Income Tax Act 1961. It is reported as Writ Petition No. 1950 of 2023, High Court of Judicature at Bombay. It tells a practitioner two useful things at once: that a group of petitions challenging the Act's validity is pending in the Bombay High Court with Rule issued, and that interim protection extending to the assessment order, the demand and prosecution has been granted in that group. That is the realistic yardstick for advising a client whether to file. If it applies to you, the first step is this: Frame the prayers so that the assessment order under s.10(3) and the notice of demand under s.13 are each separately stayed; the Court granted relief in terms of two distinct prayer clauses.
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 (para 1). It was brought to the Court's notice that the constitutional validity of certain provisions of the Act had been challenged in other writ petitions as well, in which Rule had already been issued and interim relief granted (para 2). On the facts of this petition, an assessment order had been passed on 25 March 2023 under s.10(3) of the Act and a notice of demand issued on the same date under s.13. The matter was decided on 2026-07-02 by the High Court (B.P. Colabawalla J and Firdosh P. Pooniwalla J). On those facts the High Court held as follows. Rule was issued (para 3) and the respondents were directed to file affidavits within four weeks (para 4). Interim relief was granted in terms of two prayer clauses, staying the operation of the assessment order dated 25 March 2023 passed under s.10(3) and all proceedings consequent to it, and staying the operation of the notice of demand dated 25 March 2023 issued under s.13 and consequential action (para 5). The Court further directed that 'no coercive action shall be taken against the Petitioner including that of prosecution and penalty till the hearing and final disposal' (para 6). The petition was directed to be heard along with Writ Petition No. 1300 of 2018, Writ Petition No. 965 of 2019 and Writ Petition No. 3559 of 2025 and other connected petitions raising the same or similar issues (para 7).
The order proceeds on the existence of the earlier group. Having recorded that the constitutional validity of provisions of the Act stands challenged in other petitions in which Rule has been issued and interim relief granted, the Court issued Rule here 'in these circumstances' (paras 2 and 3) and granted interim relief in the same shape. No reasons were given on the substance of the constitutional challenge and none were called for at this stage. In the words reproduced by the source cited on this page: "no coercive action shall be taken against the Petitioner including that of prosecution and penalty"
It was decided by the High Court on 2026-07-02 and is reported as Writ Petition No. 1950 of 2023, High Court of Judicature at Bombay. Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section BMA s.10(3), section BMA s.13, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. Rule was issued (para 3) and the respondents were directed to file affidavits within four weeks (para 4). Interim relief was granted in terms of two prayer clauses, staying the operation of the assessment order dated 25 March 2023 passed under s.10(3) and all proceedings consequent to it, and staying the operation of the notice of demand dated 25 March 2023 issued under s.13 and consequential action (para 5). The Court further directed that 'no coercive action shall be taken against the Petitioner including that of prosecution and penalty till the hearing and final disposal' (para 6). The petition was directed to be heard along with Writ Petition No. 1300 of 2018, Writ Petition No. 965 of 2019 and Writ Petition No. 3559 of 2025 and other connected petitions raising the same or similar issues (para 7). It arises in Assessment & Scrutiny and How Tax Law Is Read matters, on section BMA s.10(3), section BMA s.13 of the Income Tax Act 1961, and was decided by B.P. Colabawalla J and Firdosh P. Pooniwalla J. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Ask expressly for a restraint on prosecution and penalty as well as on recovery - the order covers all three. Point the Court to the existing group; Rule had already been issued and interim relief granted in the connected petitions, and that is the footing on which relief was given here. Expect the petition to be tagged with Writ Petition No. 1300 of 2018, Writ Petition No. 965 of 2019 and Writ Petition No. 3559 of 2025 rather than heard on its own.
Searched for later treatment; none was found. That is not the same as a source affirming it. This is an interim order of 2 July 2026 and the petition is pending. No later order in the petition or in the connected group was located, and nothing was found deciding the constitutional challenge one way or the other. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Nothing here is a holding. The order does not identify which provisions of the Act are said to be ultra vires, and it does not set out prayer clauses (ee) and (ff) beyond their effect, so the precise relief cannot be stated more fully than the order does. The discovery note describes this as heard with three connected Timblo petitions in the names of Rohan, Mallika and Radha Timblo; the order as printed names no other Timblo petition - the connected matters it identifies are Writ Petition No. 1300 of 2018, Writ Petition No. 965 of 2019 and Writ Petition No. 3559 of 2025. Writ Petition No. 1300 of 2018 is the petition in Anila Rasiklal Mehta v. Union of India, also in this library, which confirms that the s.71(d)(iii) challenge raised there is still pending. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
Rule was issued (para 3) and the respondents were directed to file affidavits within four weeks (para 4). Interim relief was granted in terms of two prayer clauses, staying the operation of the assessment order dated 25 March 2023 passed under s.10(3) and all proceedings consequent to it, and staying the operation of the notice of demand dated 25 March 2023 issued under s.13 and consequential action (para 5). The Court further directed that 'no coercive action shall be taken against the Petitioner including that of prosecution and penalty till the hearing and final disposal' (para 6). The petition was directed to be heard along with Writ Petition No. 1300 of 2018, Writ Petition No. 965 of 2019 and Writ Petition No. 3559 of 2025 and other connected petitions raising the same or similar issues (para 7).
TaxSphere, “Chetan Satish Timblo v Union of India”, https://taxnotice.vittsphere.com/caselaw/case/chetan-timblo-v-uoi-bma-10-3-interim-stay/ (validity last checked 2026-09-16)
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