The judgment in Sanjay Bhandari v. Income-tax Officer[i] reaffirmed a critical statutory principle: prosecution under s. 51 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 ('Act') was held not to be contingent upon completion of adjudication proceedings.

Under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, the initiation of prosecution is governed by strict statutory requirements and is independent of certain other procedural steps, but not all requirements are optional.

Key Legal Requirements for Prosecution
Sanction Requirement:
Prosecution for offences under sections 49 to 53 of the Black Money Act cannot be initiated except with the prior sanction of the Principal Chief Commissioner, Chief Commissioner, Principal Commissioner, or Commissioner (Appeals), as the case may be. The law specifically provides this safeguard to prevent arbitrary prosecution and to ensure that only meritorious cases proceed.

Wilful Intent:
For certain offences—such as wilful attempt to evade tax under section 51—the law explicitly requires a wilful intent or a culpable mental state. Section 51(1) states that a person must "wilfully attempt in any manner whatsoever to evade any tax, penalty or interest chargeable or imposable under this Act" for the stringent punishment (rigorous imprisonment of not less than three years, extendable to ten years) to apply.

However, there are other offences under the Act (such as failure to furnish return or information about foreign assets under sections 49 and 50) where the law does not always require proof of wilful intent for prosecution, but the specific language of the offence must be reviewed.

Independence from Assessment Proceedings:
The initiation of prosecution under section 51 is not dependent on the completion of assessment proceedings or a formal determination of tax evasion by the tax department. Prosecution can proceed if the conditions under section 51 are fulfilled, regardless of whether assessment proceedings have been concluded.

Summary Table
Requirement Is it Necessary? Legal Basis/Explanation
Prior Sanction Yes Required for prosecution under sections 49–53.
Wilful Intent (for evasion) For section 51 Must be proven for "wilful attempt to evade tax".
Completion of Assessment No Not required for prosecution under section 51.
Conclusion
Prosecution under the Black Money Act cannot be sustained without the prior sanction of the prescribed authority for offences under sections 49 to 53. For the most serious offence of wilful attempt to evade tax (section 51), wilful intent must be established—prosecution would not be legally sustainable in the absence of such intent for this specific offence. However, for other offences under the Act (such as failure to furnish information), wilful intent may not always be required, but the specific statutory language and intent must be examined in each case