The department cannot produce the s.10(1) notice for the year it assessed. Is that cured by s.81?
No. Where the Revenue could not produce any notice under s.10(1) for the assessment year in question, the Tribunal held that the absence of a valid notice for the relevant year is not a curable defect under s.81 of the Black Money Act. Both the assessment under s.10 and the consequent penalty order of Rs 1,84,11,360 were quashed.
Decided by the ITAT (Shri Satbeer Singh Godara, Judicial Member and Smt. Renu Jauhri, Accountant Member) on 2026-08-11, reported as BMA No. 4/Del/2025 and BMA No. 6/Del/2023, assessment year 2019-20. It bears on section BMA s.10(1), section BMA s.10(3), section BMA s.41, section BMA s.46(1), section BMA s.81 of the Income Tax Act 1961, in Assessment & Scrutiny and Penalty matters.
Section 81 is the Black Money Act's saving provision for defective notices and proceedings, and the department leans on it. This holds that s.81 saves an imperfect notice, not a missing one, and that the year on the notice has to be the year assessed.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee had invested USD 300,000 with Global Dynamic Opportunities Fund Ltd, Bermuda, on 19 May 2015 and received USD 314,608.15 as redemption value (para 4). Two appeals for assessment year 2019-20 were directed against orders of the Commissioner of Income Tax (Appeals)-3, Gurugram, both dated 19 January 2023 (para 1). One appeal was against the assessment, the other against a penalty of Rs 1,84,11,360. Among the grounds raised was that the Assessing Officer had initiated penalty proceedings under s.46(1) without serving a notice under s.46(1) (para 2).
The appeals were allowed. The Tribunal recorded that the Revenue had not been able to produce any notice issued to the assessee under s.10(1) for assessment year 2019-20, held that the absence of a valid notice for the relevant assessment year is not a curable defect under s.81 of the Act, and held that the proceedings under s.10, the consequent assessment order and the penalty order were all rendered invalid and were quashed (para 7). In the result both appeals were allowed (para 8).
The Tribunal treated the s.10(1) notice as the jurisdictional foundation of the whole proceeding. Having found that no such notice for assessment year 2019-20 was on record, it did not go into the merits of the investment or the penalty at all, and instead addressed the Revenue's reliance on s.81, holding that the saving in that section does not extend to the absence of a notice for the year assessed. The assessment and the penalty order both fell with the notice (para 7).
absence of a valid notice for the relevant assessment year is not a curable defect
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Handle my notice → Ask a CA on WhatsAppNo. Where the Revenue could not produce any notice under s.10(1) for the assessment year in question, the Tribunal held that the absence of a valid notice for the relevant year is not a curable defect under s.81 of the Black Money Act. Both the assessment under s.10 and the consequent penalty order of Rs 1,84,11,360 were quashed. This was decided by the ITAT (Shri Satbeer Singh Godara, Judicial Member and Smt. Renu Jauhri, Accountant Member) and bears on section BMA s.10(1), section BMA s.10(3), section BMA s.41, section BMA s.46(1), section BMA s.81 of the Income Tax Act 1961. It is reported as BMA No. 4/Del/2025 and BMA No. 6/Del/2023, assessment year 2019-20. Section 81 is the Black Money Act's saving provision for defective notices and proceedings, and the department leans on it. This holds that s.81 saves an imperfect notice, not a missing one, and that the year on the notice has to be the year assessed. If it applies to you, the first step is this: Ask for a copy of the s.10(1) notice and check the assessment year printed on it against the year of the assessment order.
The assessee had invested USD 300,000 with Global Dynamic Opportunities Fund Ltd, Bermuda, on 19 May 2015 and received USD 314,608.15 as redemption value (para 4). Two appeals for assessment year 2019-20 were directed against orders of the Commissioner of Income Tax (Appeals)-3, Gurugram, both dated 19 January 2023 (para 1). One appeal was against the assessment, the other against a penalty of Rs 1,84,11,360. Among the grounds raised was that the Assessing Officer had initiated penalty proceedings under s.46(1) without serving a notice under s.46(1) (para 2). The matter was decided on 2026-08-11 by the ITAT (Shri Satbeer Singh Godara, Judicial Member and Smt. Renu Jauhri, Accountant Member). On those facts the ITAT held as follows. The appeals were allowed. The Tribunal recorded that the Revenue had not been able to produce any notice issued to the assessee under s.10(1) for assessment year 2019-20, held that the absence of a valid notice for the relevant assessment year is not a curable defect under s.81 of the Act, and held that the proceedings under s.10, the consequent assessment order and the penalty order were all rendered invalid and were quashed (para 7). In the result both appeals were allowed (para 8).
The Tribunal treated the s.10(1) notice as the jurisdictional foundation of the whole proceeding. Having found that no such notice for assessment year 2019-20 was on record, it did not go into the merits of the investment or the penalty at all, and instead addressed the Revenue's reliance on s.81, holding that the saving in that section does not extend to the absence of a notice for the year assessed. The assessment and the penalty order both fell with the notice (para 7). In the words reproduced by the source cited on this page: "absence of a valid notice for the relevant assessment year is not a curable defect"
It was decided by the ITAT on 2026-08-11 and is reported as BMA No. 4/Del/2025 and BMA No. 6/Del/2023, assessment year 2019-20. 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.10(1), section BMA s.10(3), section BMA s.41, section BMA s.46(1), section BMA s.81, 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 were allowed. The Tribunal recorded that the Revenue had not been able to produce any notice issued to the assessee under s.10(1) for assessment year 2019-20, held that the absence of a valid notice for the relevant assessment year is not a curable defect under s.81 of the Act, and held that the proceedings under s.10, the consequent assessment order and the penalty order were all rendered invalid and were quashed (para 7). In the result both appeals were allowed (para 8). It arises in Assessment & Scrutiny and Penalty matters, on section BMA s.10(1), section BMA s.10(3), section BMA s.41, section BMA s.46(1), section BMA s.81 of the Income Tax Act 1961, and was decided by Shri Satbeer Singh Godara, Judicial Member and Smt. Renu Jauhri, 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. If no notice for that year exists, take the point as jurisdictional and press it before anything on merits. Meet the s.81 answer head on: the saving is for a notice that is in substance in conformity with the Act, not for the absence of one. Appeal the penalty order alongside the assessment, so that the penalty falls with the assessment in the same order.
Searched for later treatment; none was found. That is not the same as a source affirming it. The order is of August 2026 and searches returned no later decision applying or doubting it, and no appeal against it. 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 is short: it runs to eight numbered paragraphs, of which paras 1 to 6 set out the appeals, the grounds and the facts, para 7 carries the whole of the Tribunal's reasoning and para 8 the result. The ground that penalty under s.46(1) was initiated without a s.46(1) show-cause notice appears only in the grounds of appeal at para 2; the Tribunal did not decide it, having disposed of both appeals on the absence of the s.10(1) notice. Do not cite this order as authority on s.46. The section under which the penalty of Rs 1,84,11,360 was imposed is recorded in the appeal papers as s.41; the order itself does not set out the computation. A later reading of the order's own heading corrected the appeal numbers: the two appeals are BMA No. 4/Del/2025 and BMA No. 6/Del/2023, both for assessment year 2019-20 and both against orders of the Commissioner of Income Tax (Appeals)-3, Gurugram dated 19 January 2023, and not 'BMA Nos. 4 and 6/Del/2025' as this entry first recorded; the holding as stated was confirmed against para 7 of the order. 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 were allowed. The Tribunal recorded that the Revenue had not been able to produce any notice issued to the assessee under s.10(1) for assessment year 2019-20, held that the absence of a valid notice for the relevant assessment year is not a curable defect under s.81 of the Act, and held that the proceedings under s.10, the consequent assessment order and the penalty order were all rendered invalid and were quashed (para 7). In the result both appeals were allowed (para 8).
TaxSphere, “Shantanu Bhowmick v DDIT (Inv)”, https://taxnotice.vittsphere.com/caselaw/case/shantanu-bhowmick-v-ddit-bma-10-notice-not-curable-under-81/ (validity last checked 2026-09-16)
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The s.10 notice does not say which year it relates to, and my foreign account was inherited and already put in a revised return. Can the assessment stand?
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There is a look-out circular against me while my Black Money Act appeal is pending. Can I get it lifted, and does the appeal need money deposited first?
The assessment under the Black Money Act has been quashed. Does the s.41 penalty go with it, and does the s.43 penalty go too?
