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Article
Upholds penalty under Section 43 of the Black Money Act, 2015 for non-disclosure in ‘ITR-Schedule FA’ despite explaining source & paying income-tax
Category: Article, Posted on: 28/09/2023
, Posted By:
CA. (Dr) VINAY MITTAL
Visitor Count:
1288
Upholds penalty under Section 43 of the Black Money Act, 2015 for non-disclosure in ‘ITR-Schedule FA’ despite explaining source & paying income-tax
Mumbai ITAT upholds CIT(A) order confirming levy of penalty under Section 43 of the Black Money Act (BMA) for non-disclosure of foreign assets in ‘Schedule FA’ of ITR; ITAT considers Assessee’s contention that the assets were not undisclosed assets as the source was explained and the income arising therefrom was offered to tax in the ITR, however, observes that “ penalty under section 43 is levied for non-reporting of overseas investments and not for making investments from unaccounted money. The provisions of section 43 does not provide any room not to levy penalty even if the foreign asset is disclosed in books since the penalty is levied only towards nondisclosure of foreign assets in schedule FA”; Assessee-Individual, made a joint investment (with her husband) in Global Dynamic Opportunity Fund having 40% share but failed to disclose the said foreign asset in schedule FA of ITR filed for Assessment years 2016-17 to 2018-19; Revenue dismissed Assessee’s plea of bona fide error and levied penalty under Section 43 of the BMA of Rs. 10 Lacs for each Assessment year, which was confirmed by the CIT(A); ITAT analyses Section 43 of BMA and observes that a person who is resident and ordinarily resident while filing the return of income under Section 139(1), or 139(4) or 139(5) fails to furnish or files inaccurate particulars of investment outside India, then the person is liable for penalty; Further observes that the disclosure requirement is not only for the undisclosed asset but any asset held by the Assessee as a beneficial owner or otherwise; Thus, rejects Assessee’s argument that the penalty under Section 43 of BMA can be levied only with respect to undisclosed asset, holding the same to be untenable; Opines that the CIT(A) was correct in confirming the penalty since the Assessee did not disclose the foreign asset in ITR Schedule FA; Rejects Assessee’s alternate plea that non-disclosure of foreign asset in Schedule FA is an inadvertent and bona fide error, therefore, does not warrant penalty; Considers Assessee’s argument that the levy of penalty under Section 43 is not mandatory but is at the discretion of the Revenue, by virtue of the word ‘may’ used therein; Observes that even assuming that the Revenue has a discretion to levy penalty, the Assessee failed to substantiate that the Revenue exercised his discretion extravagantly; States that the Revenue exercised his discretion judiciously by levying penalty only after examining the facts of the case; Notes that no material was brought to show that Revenue levied penalty in an arbitrary and unjustified manner; Thus dismisses Assessee’s appeals.
[In favour of revenue]
(Related Assessment years : 2016-17 to 2018-19) – [Shobha Harish Thawani v.
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