The foreign investment was in the audited balance sheet and in Part A-BS of the return but not in Schedule FA. Is that a failure to furnish information for s.43?
No. Following a coordinate bench, the Tribunal dismissed the Revenue's appeals and upheld the deletion of Rs 10,00,000 penalties for six years. The statutory trigger for s.43 is the failure to furnish in the return of income any information relating to a foreign asset; where the asset was disclosed in the audited accounts and in the balance-sheet schedule of the return, the return cannot be said to have been silent about it, and the unfilled Schedule FA is a lapse in the reporting format of the return rather than a complete failure to furnish information.
Decided by the ITAT (Shri Amit Shukla, Judicial Member and Shri Girish Agrawal, Accountant Member) on 2026-03-10, reported as BMA Nos. 48 to 53/Mum/2025, assessment years 2016-17 to 2021-22. It bears on section BMA s.43, section 139(1) Schedule FA of the Income Tax Act 1961, in Penalty matters.
It puts a second Mumbai bench behind the proposition that s.43 fastens on the return of income as a whole and not on one schedule of it, and it does so by expressly following an earlier coordinate bench rather than by an independent route. For a practitioner that matters twice over: the reasoning is available, and so is the consistency of the Mumbai bench on it.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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Penalties of Rs 10,00,000 were imposed on the company under s.43 of the Black Money Act for six assessment years, 2016-17 to 2021-22, on the footing that a foreign investment had not been shown in Schedule FA of the returns. The investment had been disclosed in the audited balance sheets and in Part A-BS of the returns of income. The penalties were deleted in the first appeal and the Revenue appealed to the Tribunal in six appeals heard together.
The appeals filed by the Revenue were dismissed (para 16). Reading s.43, which it extracted at para 9, the Tribunal held that the statutory trigger for levy of penalty is the failure to furnish in the return of income any information relating to a foreign asset or financial interest located outside India (para 10). Because the investment was disclosed in the audited financial statements and in the balance-sheet part of the return, the return of income could not be said to have been silent about the existence of the foreign asset, and the situation was one of a lapse in the reporting format of the return rather than a complete failure to furnish information relating to the foreign asset in the return of income (para 10). The Bench then referred to and reproduced an order of a coordinate bench which had examined an identical controversy (para 11), and decided the appeals by following it: para 12 opens 'Respectfully following the aforesaid decision of the coordinate bench and applying the same principle to the facts of the present case we find ourselves in agreement with the conclusion arrived at by the Ld. CIT(A).' It concluded that on the totality of facts the omission in Schedule FA, in the face of disclosure elsewhere in the return architecture, bears the imprint of a technical lapse rather than the hallmark of 'no information furnished' (para 12).
The Bench read the charging words of s.43 as fastening on a failure to furnish information in the return of income and not on a failure to use a particular schedule of the return, and applied that reading to the record: the disclosure was made in one part of the return while the schedule meant for foreign assets remained unfilled, so the return was not silent about the asset and what remained was a defect in the reporting format (para 10). It then took the point as already decided, describing the coordinate bench as having held that where the foreign asset stands disclosed in the audited accounts and in another schedule of the return the omission to disclose it in Schedule FA cannot by itself attract the rigour of penalty under s.43, and reproducing that order in full (para 11). Its own conclusion is reached by respectfully following that decision and applying the same principle to these facts (para 12), and it closes on the strictness with which penal provisions must operate: where the information relating to the foreign asset is already embedded in the return of income through the audited financial statements it becomes difficult to characterise the case as one where the assessee has failed to furnish any information in the return (para 12). The proposition that the assessee can be said to have directly or indirectly complied with the statutory provisions so that the case does not fall under the rigorous provisions of s.43 belongs to the reproduced coordinate-bench order and not to this Bench's own paragraphs.
A careful reading of the aforesaid provision reveals that the statutory trigger for levy of penalty is the failure to furnish in the return of income any information relating to a foreign asset or financial interest located outside India.
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Handle my notice → Ask a CA on WhatsAppNo. Following a coordinate bench, the Tribunal dismissed the Revenue's appeals and upheld the deletion of Rs 10,00,000 penalties for six years. The statutory trigger for s.43 is the failure to furnish in the return of income any information relating to a foreign asset; where the asset was disclosed in the audited accounts and in the balance-sheet schedule of the return, the return cannot be said to have been silent about it, and the unfilled Schedule FA is a lapse in the reporting format of the return rather than a complete failure to furnish information. This was decided by the ITAT (Shri Amit Shukla, Judicial Member and Shri Girish Agrawal, Accountant Member) and bears on section BMA s.43, section 139(1) Schedule FA of the Income Tax Act 1961. It is reported as BMA Nos. 48 to 53/Mum/2025, assessment years 2016-17 to 2021-22. It puts a second Mumbai bench behind the proposition that s.43 fastens on the return of income as a whole and not on one schedule of it, and it does so by expressly following an earlier coordinate bench rather than by an independent route. For a practitioner that matters twice over: the reasoning is available, and so is the consistency of the Mumbai bench on it. If it applies to you, the first step is this: Trace the foreign asset through every part of the return actually filed - Part A-BS, the schedules to the audited accounts, the tax audit report - and put the extracts on record.
Penalties of Rs 10,00,000 were imposed on the company under s.43 of the Black Money Act for six assessment years, 2016-17 to 2021-22, on the footing that a foreign investment had not been shown in Schedule FA of the returns. The investment had been disclosed in the audited balance sheets and in Part A-BS of the returns of income. The penalties were deleted in the first appeal and the Revenue appealed to the Tribunal in six appeals heard together. The matter was decided on 2026-03-10 by the ITAT (Shri Amit Shukla, Judicial Member and Shri Girish Agrawal, Accountant Member). On those facts the ITAT held as follows. The appeals filed by the Revenue were dismissed (para 16). Reading s.43, which it extracted at para 9, the Tribunal held that the statutory trigger for levy of penalty is the failure to furnish in the return of income any information relating to a foreign asset or financial interest located outside India (para 10). Because the investment was disclosed in the audited financial statements and in the balance-sheet part of the return, the return of income could not be said to have been silent about the existence of the foreign asset, and the situation was one of a lapse in the reporting format of the return rather than a complete failure to furnish information relating to the foreign asset in the return of income (para 10). The Bench then referred to and reproduced an order of a coordinate bench which had examined an identical controversy (para 11), and decided the appeals by following it: para 12 opens 'Respectfully following the aforesaid decision of the coordinate bench and applying the same principle to the facts of the present case we find ourselves in agreement with the conclusion arrived at by the Ld. CIT(A).' It concluded that on the totality of facts the omission in Schedule FA, in the face of disclosure elsewhere in the return architecture, bears the imprint of a technical lapse rather than the hallmark of 'no information furnished' (para 12).
The Bench read the charging words of s.43 as fastening on a failure to furnish information in the return of income and not on a failure to use a particular schedule of the return, and applied that reading to the record: the disclosure was made in one part of the return while the schedule meant for foreign assets remained unfilled, so the return was not silent about the asset and what remained was a defect in the reporting format (para 10). It then took the point as already decided, describing the coordinate bench as having held that where the foreign asset stands disclosed in the audited accounts and in another schedule of the return the omission to disclose it in Schedule FA cannot by itself attract the rigour of penalty under s.43, and reproducing that order in full (para 11). Its own conclusion is reached by respectfully following that decision and applying the same principle to these facts (para 12), and it closes on the strictness with which penal provisions must operate: where the information relating to the foreign asset is already embedded in the return of income through the audited financial statements it becomes difficult to characterise the case as one where the assessee has failed to furnish any information in the return (para 12). The proposition that the assessee can be said to have directly or indirectly complied with the statutory provisions so that the case does not fall under the rigorous provisions of s.43 belongs to the reproduced coordinate-bench order and not to this Bench's own paragraphs. In the words reproduced by the source cited on this page: "A careful reading of the aforesaid provision reveals that the statutory trigger for levy of penalty is the failure to furnish in the return of income any information relating to a foreign asset or financial interest located outside India." The decision followed or applied Order of a coordinate bench of the Mumbai Tribunal on s.43 of the Black Money Act, described at para 11 and reproduced in full - respectfully followed at para 12. The order the Bench points to in the body of its own discussion is the Tribunal's order dated 26 February 2026 in BMA No. 43/Mum/2025 and connected appeals; a second reading placed the Ocean Diving Centre Ltd. reasoning in the reproduced block. The reproduction was not separately verified against either order..
It was decided by the ITAT on 2026-03-10 and is reported as BMA Nos. 48 to 53/Mum/2025, assessment years 2016-17 to 2021-22. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section BMA s.43, section 139(1) Schedule FA, 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. The appeals filed by the Revenue were dismissed (para 16). Reading s.43, which it extracted at para 9, the Tribunal held that the statutory trigger for levy of penalty is the failure to furnish in the return of income any information relating to a foreign asset or financial interest located outside India (para 10). Because the investment was disclosed in the audited financial statements and in the balance-sheet part of the return, the return of income could not be said to have been silent about the existence of the foreign asset, and the situation was one of a lapse in the reporting format of the return rather than a complete failure to furnish information relating to the foreign asset in the return of income (para 10). The Bench then referred to and reproduced an order of a coordinate bench which had examined an identical controversy (para 11), and decided the appeals by following it: para 12 opens 'Respectfully following the aforesaid decision of the coordinate bench and applying the same principle to the facts of the present case we find ourselves in agreement with the conclusion arrived at by the Ld. CIT(A).' It concluded that on the totality of facts the omission in Schedule FA, in the face of disclosure elsewhere in the return architecture, bears the imprint of a technical lapse rather than the hallmark of 'no information furnished' (para 12). It arises in Penalty matters, on section BMA s.43, section 139(1) Schedule FA of the Income Tax Act 1961, and was decided by Shri Amit Shukla, Judicial Member and Shri Girish Agrawal, Accountant Member. 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. Answer the s.46 notice on the statutory words: the section speaks of a failure to furnish information in the return of income, and the information was furnished in the return. Characterise the unfilled Schedule FA as a lapse in the reporting format of the return, which is what this Bench held it to be, rather than as a complete failure to furnish information. Cite the coordinate-bench line on s.43 as well; this order follows it, and the two read together are the Mumbai bench's settled approach. Keep the discretion argument in s.43 - the word is 'may' - as an alternative footing.
Searched for later treatment; none was found. That is not the same as a source affirming it. The order is of March 2026 and no later decision applying or doubting it was located. It should not be described as reaching its result by an independent route: it expressly follows a coordinate bench, and the proposition that the assessee complied directly or indirectly with the statutory provisions sits inside the reproduced order and not in this Bench's own paragraphs. What this Bench itself adds, at paras 10 and 12, is narrower - that the return of income was not silent about the foreign asset, that the unfilled Schedule FA is a lapse in the reporting format of the return, and that the omission bears the imprint of a technical lapse. Read it alongside ocean-diving-centre-v-cita-bma-43 in this library, which is a different order, on B.M. Appeal Nos. 20 to 27 (Mum.) of 2023, and which turns on the discretion in the word 'may'. 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.
The order does not identify the foreign asset beyond describing it as a foreign investment disclosed in the audited balance sheet and in the balance-sheet part of the return. The two readings of the order give the Members' names in a different order on the coversheet; both name Amit Shukla, Judicial Member, and Girish Agrawal, Accountant Member. A later reading of the document corrected the attribution on which this entry first rested: para 11 records that it is 'relevant to refer to the decision of the coordinate bench of the Tribunal which has examined an identical controversy', that order is then reproduced, and para 12 opens 'Respectfully following the aforesaid decision of the coordinate bench', so this Bench did not decide by a route of its own, and the words 'the assessee can be said to have directly or indirectly complied with the statutory provisions and the case of the Assessee does not fall under the rigorous provisions of section 43' are the reproduced order's and not this Bench's; the key quote, which had been constructed rather than taken from the order, has been replaced by the Bench's own sentence from para 10. The identity of the reproduced order could not be settled: one reading of the document put the coordinate bench's order at BMA No. 43/Mum/2025, which is also the order dated 26 February 2026 that the Bench refers to in its own discussion, and another placed Ocean Diving Centre Ltd. (BMA No. 22/Mum/2023) inside the reproduced block. Nothing in this entry depends on which it is. One further variance is worth recording: one reading returned the closing words of para 12 as 'a technical or inadvertent lapse rather than a contumacious breach warranting penal consequences' and two others returned 'the imprint of a technical lapse rather than the hallmark of "no information furnished", which is the jurisdictional foundation for section 43'; the latter is what is used above, and the word 'contumacious' was found in para 4 rather than in para 12. 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.
The appeals filed by the Revenue were dismissed (para 16). Reading s.43, which it extracted at para 9, the Tribunal held that the statutory trigger for levy of penalty is the failure to furnish in the return of income any information relating to a foreign asset or financial interest located outside India (para 10). Because the investment was disclosed in the audited financial statements and in the balance-sheet part of the return, the return of income could not be said to have been silent about the existence of the foreign asset, and the situation was one of a lapse in the reporting format of the return rather than a complete failure to furnish information relating to the foreign asset in the return of income (para 10). The Bench then referred to and reproduced an order of a coordinate bench which had examined an identical controversy (para 11), and decided the appeals by following it: para 12 opens 'Respectfully following the aforesaid decision of the coordinate bench and applying the same principle to the facts of the present case we find ourselves in agreement with the conclusion arrived at by the Ld. CIT(A).' It concluded that on the totality of facts the omission in Schedule FA, in the face of disclosure elsewhere in the return architecture, bears the imprint of a technical lapse rather than the hallmark of 'no information furnished' (para 12).
TaxSphere, “Addl. CIT v Adijin Perfumes Pvt Ltd”, https://taxnotice.vittsphere.com/caselaw/case/addl-cit-v-adijin-perfumes-bma-43-information-in-balance-sheet/ (validity last checked 2026-09-16)
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A foreign life policy was bought and paid for by my brother-in-law with my wife as beneficiary, and another one lapsed in 2014. Do either of them belong in my Schedule FA?
I left my foreign ESOPs out of Schedule FA. Is the Rs 10 lakh penalty automatic?
The foreign investment was in my balance sheet and elsewhere in the return, just not in Schedule FA. Does that still cost Rs 10 lakh?
Your return for the year was late and treated as invalid, though it did disclose the foreign assets in Schedule FA. Can the Rs 10 lakh penalty under s.42 still stand?
