Allahabad High Court Stays Proceedings in Black Money Act Case Against Rakesh Srivastava

Court Criticizes Non-Speaking Summoning Orders; Stresses on Judicial Satisfaction in Criminal Complaints

In a significant development, the Allahabad High Court, Lucknow Bench, has stayed the proceedings against Rakesh Srivastava under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. The court's decision came while considering an application challenging the cognizance and summoning order dated June 20, 2025, issued by the Special Chief Judicial Magistrate (Custom), Lucknow.

The case involves allegations against Srivastava concerning undisclosed foreign assets, specifically an immovable property in Dubai, purportedly not disclosed in the Income Tax Return for the Assessment Year 2023-24. The applicant contended that the property was purchased after the relevant reporting period, thus negating any obligation for disclosure in that assessment year.

Justice Brij Raj Singh, presiding over the matter, emphasized the necessity for summoning orders in criminal complaints to be reasoned and reflective of judicial satisfaction. The court observed that the order in question was a "non-speaking" one, lacking the requisite articulation of reasons, thereby rendering it unsustainable in law.

The court noted the gravity of issuing summons in criminal cases, underscoring that such actions must demonstrate a clear application of judicial mind and satisfaction. This principle aligns with established legal precedents, which mandate that non-speaking orders without recorded reasons are insufficient for the summoning process.

In the defense presented by Srivastava's counsel, it was argued that the foreign asset was acquired post the relevant financial period, thereby exempting it from disclosure requirements for the Assessment Year 2023-24. Moreover, the counsel highlighted procedural lapses, including the absence of a show-cause notice or penalty under the Act.

The case also brought to light procedural discrepancies, such as the lack of a notice under Section 10 of the Act before the complaint's cognizance. The court acknowledged the need for a detailed examination of both factual and legal aspects, ordering further consideration and inviting a counter-affidavit from the complainant.

Pending the next hearing, scheduled for the last week of December 2025, the court has stayed all proceedings related to the complaint against Srivastava. This stay order serves as a reminder of the judiciary's role in ensuring procedural fairness and adherence to legal standards in criminal proceedings.

The case underscores the importance of judicial scrutiny in the issuance of summons and the necessity for orders to be well-reasoned and demonstrative of judicial satisfaction, particularly in matters involving serious allegations under the Black Money Act.

Bottom Line:

Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 - Summoning orders in criminal complaints must be reasoned and demonstrate judicial satisfaction - Non-speaking orders are unsustainable in law - Proceedings stayed pending further consideration.

Statutory provision(s): Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 Sections 50, 46, 48, Criminal Procedure

Rakesh Srivastava v. U.O.I., (Allahabad)(Lucknow) : Law Finder Doc Id # 2815100