My client's Black Money assessment covers a foreign account opened in 2009 and not declared under the one-time compliance window. The department has charged tax and a penalty of three times the tax, and says the year is fixed by s.72(c). What do those provisions actually say?
Section 41 provides that the Assessing Officer may direct that, in a case where tax has been computed under s.10 in respect of undisclosed foreign income and asset, the assessee shall pay by way of penalty, in addition to tax if any payable by him, "a sum equal to three times the tax computed under that section". It is therefore a multiple of the tax computed under s.10, and it follows the s.10 computation — if the computation goes, the base of the penalty goes with it. Section 43 is a different and smaller penalty: where a resident other than not ordinarily resident within s.6(6) of the Income-tax Act has furnished a return under s.139(1), (4) or (5) of that Act and fails to furnish any information, or furnishes inaccurate particulars, in that return relating to any asset (including financial interest in any entity) located outside India held by him as beneficial owner or otherwise, or in respect of which he was a beneficiary, or relating to any income from a source located outside India, the Assessing Officer "may direct that such person shall pay, by way of penalty, a sum of ten lakh rupees". Its proviso, as substituted by the Finance (No. 2) Act, 2024 with effect from 1 October 2024, reads: "Provided that this section shall not apply in respect of an asset or assets (other than immovable property), where the aggregate value of such asset or assets does not exceed twenty lakh rupees." The footnote on the departmental page records that before that substitution the proviso excluded only "an asset, being one or more bank accounts having an aggregate balance which does not exceed a value equivalent to five hundred thousand rupees at any time during the previous year". Section 72(c), in the removal-of-doubts provision at the end of the declaration chapter, is the hinge of the retrospectivity argument and reads: "where any asset has been acquired or made prior to commencement of this Act, and no declaration in respect of such asset is made under this Chapter, such asset shall be deemed to have been acquired or made in the year in which a notice under section 10 is issued by the Assessing Officer and the provisions of this Act shall apply accordingly".
Decided by the CBDT Circulars & Instructions (Not applicable — statutory text) on 2024-10-01, reported as Sections 41, 43 and 72 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, transcribed from incometaxindia.gov.in/w/section-41-117 (heading "Penalty in relation to undisclosed foreign income and asset", Year stamp blank, no footnote), incometaxindia.gov.in/w/section-43-114 (heading "Penalty for failure to furnish in return of income, an information or furnish inaccurate particulars about an asset (including financial interest in any entity) located outside India", Year stamp blank, one footnote recording the substitution of the proviso by the Finance (No. 2) Act, 2024 with effect from 1 October 2024) and incometaxindia.gov.in/w/section-72-96 (heading "Removal of doubts", Year stamp blank, no footnote), with s.42 read for comparison at incometaxindia.gov.in/w/section-42-115. It bears on section BMA s.41, section BMA s.42, section BMA s.43, section BMA s.72(c), section BMA s.10, section BMA s.10(3), section BMA s.59, section BMA s.3(1), section 139(1), section 139(4), section 139(5), section 6(6) of the Income Tax Act 1961, in Penalty, Assessment & Scrutiny and How Tax Law Is Read matters.
The retrospectivity argument on this Act is fought on s.72(c) together with the proviso to s.3(1), and the two do different work: the proviso to s.3(1) fixes the year in which the VALUE of an undisclosed asset is charged (the year of coming to notice), while s.72(c) deems the asset to have been ACQUIRED OR MADE in the year in which the s.10 notice is issued, and does so only where the asset was acquired or made before the Act commenced and no declaration was made under the declaration chapter. A practitioner arguing that an asset acquired in, say, 2009 cannot be charged has to displace both, and the conditions of s.72(c) — acquisition before commencement, and no declaration under that Chapter — are conditions the department must satisfy, which makes the date of the s.10 notice a fact of substance rather than procedure. On penalty, the practical points are that s.41 is a multiple of the tax computed under s.10 and so cannot survive the collapse of that computation, and that s.43 is a flat sum with a threshold that MOVED on 1 October 2024 from a five hundred thousand rupee bank-balance test to a twenty lakh rupee aggregate-value test for assets other than immovable property, so the year of default decides which proviso applies. THE LIBRARY ALREADY HOLDS THE DECISIONS: Anandi Laijawala v DDIT on the year being fixed by the notice under s.72(c), Satish Gopal Rao v DDIT on s.72(c) reaching assets and not income, Elangovan Malarmangai v JCIT on the s.41 penalty falling with the quantum, Krishna Das Agrawal v Income Tax Department on the s.41 penalty not being stayed, Shiv Kumar Nayyar v Addl CIT on ss.41 and 43 together, and Vinil Venugopal v DDIT, the Special Bench on s.43. The reader should be sent to those; this entry gives the text.
Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them.
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Section 41, heading "Penalty in relation to undisclosed foreign income and asset", reads: "The Assessing Officer may direct that in a case where tax has been computed under section 10 in respect of undisclosed foreign income and asset, the assessee shall pay by way of penalty, in addition to tax, if any, payable by him, a sum equal to three times the tax computed under that section." The page prints no footnote. Section 43, heading "Penalty for failure to furnish in return of income, an information or furnish inaccurate particulars about an asset (including financial interest in any entity) located outside India", reads: "If any person, being a resident other than not ordinarily resident in India within the meaning of clause (6) of section 6 of the Income-tax Act, who has furnished the return of income for any previous year under sub-section (1) or sub-section (4) or sub-section (5) of section 139 of the said Act, fails to furnish any information or furnishes inaccurate particulars in such return relating to any asset (including financial interest in any entity) located outside India, held by him as a beneficial owner or otherwise, or in respect of which he was a beneficiary, or relating to any income from a source located outside India, at any time during such previous year, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of ten lakh rupees", followed by the proviso "Provided that this section shall not apply in respect of an asset or assets (other than immovable property), where the aggregate value of such asset or assets does not exceed twenty lakh rupees." and the Explanation "The value equivalent in rupees shall be determined in the manner provided in the Explanation to section 42." The footnote to the proviso reads verbatim: "Substituted by the Finance (No. 2) Act, 2024, w.e.f. 1-10-2024. Prior to its substitution, proviso read as under: Provided that this section shall not apply in respect of an asset, being one or more bank accounts having an aggregate balance which does not exceed a value equivalent to five hundred thousand rupees at any time during the previous year." Section 72, heading "Removal of doubts", reads: "72. For the removal of doubts, it is hereby declared that— (a) save as otherwise expressly provided in the Explanation to sub-section (1) of section 69, nothing contained in this Chapter shall be construed as conferring any benefit, concession or immunity on any person other than the person making the declaration under this Chapter; (b) where any declaration has been made under section 59 but no tax and penalty has been paid within the time specified under section 60 and section 61, the value of such asset shall be chargeable to tax under this Act in the previous year in which such declaration is made; (c) where any asset has been acquired or made prior to commencement of this Act, and no declaration in respect of such asset is made under this Chapter, such asset shall be deemed to have been acquired or made in the year in which a notice under section 10 is issued by the Assessing Officer and the provisions of this Act shall apply accordingly." The s.72 page prints no footnote.
Not a judgment. The statutory position is that s.41 of the Black Money Act empowers the Assessing Officer to direct an assessee, in a case where tax has been computed under s.10 in respect of undisclosed foreign income and asset, to pay by way of penalty in addition to any tax payable a sum equal to three times the tax computed under s.10; that s.43 empowers him to direct a resident other than not ordinarily resident within s.6(6) of the Income-tax Act, who has furnished a return under s.139(1), (4) or (5) of that Act and has failed to furnish information or has furnished inaccurate particulars in it about an asset located outside India or income from a source outside India, to pay a penalty of ten lakh rupees, subject to a proviso, substituted by the Finance (No. 2) Act, 2024 with effect from 1 October 2024, that the section does not apply in respect of an asset or assets other than immovable property whose aggregate value does not exceed twenty lakh rupees, the proviso before that substitution having excluded only bank accounts with an aggregate balance not exceeding a value equivalent to five hundred thousand rupees at any time during the previous year; and that by s.72(c), where an asset has been acquired or made prior to the commencement of the Act and no declaration in respect of it has been made under the declaration chapter, the asset is deemed to have been acquired or made in the year in which a notice under s.10 is issued by the Assessing Officer, and the provisions of the Act apply accordingly.
Not a judgment; no judicial reasoning is stated for the section.
(c) where any asset has been acquired or made prior to commencement of this Act, and no declaration in respect of such asset is made under this Chapter, such asset shall be deemed to have been acquired or made in the year in which a notice under section 10 is issued by the Assessing Officer and the provisions of this Act shall apply accordingly.
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Handle my notice → Ask a CA on WhatsAppSection 41 provides that the Assessing Officer may direct that, in a case where tax has been computed under s.10 in respect of undisclosed foreign income and asset, the assessee shall pay by way of penalty, in addition to tax if any payable by him, "a sum equal to three times the tax computed under that section". It is therefore a multiple of the tax computed under s.10, and it follows the s.10 computation — if the computation goes, the base of the penalty goes with it. Section 43 is a different and smaller penalty: where a resident other than not ordinarily resident within s.6(6) of the Income-tax Act has furnished a return under s.139(1), (4) or (5) of that Act and fails to furnish any information, or furnishes inaccurate particulars, in that return relating to any asset (including financial interest in any entity) located outside India held by him as beneficial owner or otherwise, or in respect of which he was a beneficiary, or relating to any income from a source located outside India, the Assessing Officer "may direct that such person shall pay, by way of penalty, a sum of ten lakh rupees". Its proviso, as substituted by the Finance (No. 2) Act, 2024 with effect from 1 October 2024, reads: "Provided that this section shall not apply in respect of an asset or assets (other than immovable property), where the aggregate value of such asset or assets does not exceed twenty lakh rupees." The footnote on the departmental page records that before that substitution the proviso excluded only "an asset, being one or more bank accounts having an aggregate balance which does not exceed a value equivalent to five hundred thousand rupees at any time during the previous year". Section 72(c), in the removal-of-doubts provision at the end of the declaration chapter, is the hinge of the retrospectivity argument and reads: "where any asset has been acquired or made prior to commencement of this Act, and no declaration in respect of such asset is made under this Chapter, such asset shall be deemed to have been acquired or made in the year in which a notice under section 10 is issued by the Assessing Officer and the provisions of this Act shall apply accordingly". This was decided by the CBDT Circulars & Instructions (Not applicable — statutory text) and bears on section BMA s.41, section BMA s.42, section BMA s.43, section BMA s.72(c), section BMA s.10, section BMA s.10(3), section BMA s.59, section BMA s.3(1), section 139(1), section 139(4), section 139(5), section 6(6) of the Income Tax Act 1961. It is reported as Sections 41, 43 and 72 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, transcribed from incometaxindia.gov.in/w/section-41-117 (heading "Penalty in relation to undisclosed foreign income and asset", Year stamp blank, no footnote), incometaxindia.gov.in/w/section-43-114 (heading "Penalty for failure to furnish in return of income, an information or furnish inaccurate particulars about an asset (including financial interest in any entity) located outside India", Year stamp blank, one footnote recording the substitution of the proviso by the Finance (No. 2) Act, 2024 with effect from 1 October 2024) and incometaxindia.gov.in/w/section-72-96 (heading "Removal of doubts", Year stamp blank, no footnote), with s.42 read for comparison at incometaxindia.gov.in/w/section-42-115. The retrospectivity argument on this Act is fought on s.72(c) together with the proviso to s.3(1), and the two do different work: the proviso to s.3(1) fixes the year in which the VALUE of an undisclosed asset is charged (the year of coming to notice), while s.72(c) deems the asset to have been ACQUIRED OR MADE in the year in which the s.10 notice is issued, and does so only where the asset was acquired or made before the Act commenced and no declaration was made under the declaration chapter. A practitioner arguing that an asset acquired in, say, 2009 cannot be charged has to displace both, and the conditions of s.72(c) — acquisition before commencement, and no declaration under that Chapter — are conditions the department must satisfy, which makes the date of the s.10 notice a fact of substance rather than procedure. On penalty, the practical points are that s.41 is a multiple of the tax computed under s.10 and so cannot survive the collapse of that computation, and that s.43 is a flat sum with a threshold that MOVED on 1 October 2024 from a five hundred thousand rupee bank-balance test to a twenty lakh rupee aggregate-value test for assets other than immovable property, so the year of default decides which proviso applies. THE LIBRARY ALREADY HOLDS THE DECISIONS: Anandi Laijawala v DDIT on the year being fixed by the notice under s.72(c), Satish Gopal Rao v DDIT on s.72(c) reaching assets and not income, Elangovan Malarmangai v JCIT on the s.41 penalty falling with the quantum, Krishna Das Agrawal v Income Tax Department on the s.41 penalty not being stayed, Shiv Kumar Nayyar v Addl CIT on ss.41 and 43 together, and Vinil Venugopal v DDIT, the Special Bench on s.43. The reader should be sent to those; this entry gives the text. If it applies to you, the first step is this: Check whether s.72(c) is being used at all, and if it is, put the department to proof of its two conditions — that the asset was acquired or made before the Act commenced, and that no declaration in respect of it was made under Chapter VI — and fix the date of the s.10 notice, because that date is the deemed year of acquisition.
Section 41, heading "Penalty in relation to undisclosed foreign income and asset", reads: "The Assessing Officer may direct that in a case where tax has been computed under section 10 in respect of undisclosed foreign income and asset, the assessee shall pay by way of penalty, in addition to tax, if any, payable by him, a sum equal to three times the tax computed under that section." The page prints no footnote. Section 43, heading "Penalty for failure to furnish in return of income, an information or furnish inaccurate particulars about an asset (including financial interest in any entity) located outside India", reads: "If any person, being a resident other than not ordinarily resident in India within the meaning of clause (6) of section 6 of the Income-tax Act, who has furnished the return of income for any previous year under sub-section (1) or sub-section (4) or sub-section (5) of section 139 of the said Act, fails to furnish any information or furnishes inaccurate particulars in such return relating to any asset (including financial interest in any entity) located outside India, held by him as a beneficial owner or otherwise, or in respect of which he was a beneficiary, or relating to any income from a source located outside India, at any time during such previous year, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of ten lakh rupees", followed by the proviso "Provided that this section shall not apply in respect of an asset or assets (other than immovable property), where the aggregate value of such asset or assets does not exceed twenty lakh rupees." and the Explanation "The value equivalent in rupees shall be determined in the manner provided in the Explanation to section 42." The footnote to the proviso reads verbatim: "Substituted by the Finance (No. 2) Act, 2024, w.e.f. 1-10-2024. Prior to its substitution, proviso read as under: Provided that this section shall not apply in respect of an asset, being one or more bank accounts having an aggregate balance which does not exceed a value equivalent to five hundred thousand rupees at any time during the previous year." Section 72, heading "Removal of doubts", reads: "72. For the removal of doubts, it is hereby declared that— (a) save as otherwise expressly provided in the Explanation to sub-section (1) of section 69, nothing contained in this Chapter shall be construed as conferring any benefit, concession or immunity on any person other than the person making the declaration under this Chapter; (b) where any declaration has been made under section 59 but no tax and penalty has been paid within the time specified under section 60 and section 61, the value of such asset shall be chargeable to tax under this Act in the previous year in which such declaration is made; (c) where any asset has been acquired or made prior to commencement of this Act, and no declaration in respect of such asset is made under this Chapter, such asset shall be deemed to have been acquired or made in the year in which a notice under section 10 is issued by the Assessing Officer and the provisions of this Act shall apply accordingly." The s.72 page prints no footnote. The matter was decided on 2024-10-01 by the CBDT Circulars & Instructions (Not applicable — statutory text). On those facts the CBDT Circulars & Instructions held as follows. Not a judgment. The statutory position is that s.41 of the Black Money Act empowers the Assessing Officer to direct an assessee, in a case where tax has been computed under s.10 in respect of undisclosed foreign income and asset, to pay by way of penalty in addition to any tax payable a sum equal to three times the tax computed under s.10; that s.43 empowers him to direct a resident other than not ordinarily resident within s.6(6) of the Income-tax Act, who has furnished a return under s.139(1), (4) or (5) of that Act and has failed to furnish information or has furnished inaccurate particulars in it about an asset located outside India or income from a source outside India, to pay a penalty of ten lakh rupees, subject to a proviso, substituted by the Finance (No. 2) Act, 2024 with effect from 1 October 2024, that the section does not apply in respect of an asset or assets other than immovable property whose aggregate value does not exceed twenty lakh rupees, the proviso before that substitution having excluded only bank accounts with an aggregate balance not exceeding a value equivalent to five hundred thousand rupees at any time during the previous year; and that by s.72(c), where an asset has been acquired or made prior to the commencement of the Act and no declaration in respect of it has been made under the declaration chapter, the asset is deemed to have been acquired or made in the year in which a notice under s.10 is issued by the Assessing Officer, and the provisions of the Act apply accordingly.
Not a judgment; no judicial reasoning is stated for the section. In the words reproduced by the source cited on this page: "(c) where any asset has been acquired or made prior to commencement of this Act, and no declaration in respect of such asset is made under this Chapter, such asset shall be deemed to have been acquired or made in the year in which a notice under section 10 is issued by the Assessing Officer and the provisions of this Act shall apply accordingly."
It was decided by the CBDT Circulars & Instructions on 2024-10-01 and is reported as Sections 41, 43 and 72 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, transcribed from incometaxindia.gov.in/w/section-41-117 (heading "Penalty in relation to undisclosed foreign income and asset", Year stamp blank, no footnote), incometaxindia.gov.in/w/section-43-114 (heading "Penalty for failure to furnish in return of income, an information or furnish inaccurate particulars about an asset (including financial interest in any entity) located outside India", Year stamp blank, one footnote recording the substitution of the proviso by the Finance (No. 2) Act, 2024 with effect from 1 October 2024) and incometaxindia.gov.in/w/section-72-96 (heading "Removal of doubts", Year stamp blank, no footnote), with s.42 read for comparison at incometaxindia.gov.in/w/section-42-115. Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them. A CBDT circular or instruction binds officers of the department but not the assessee and not the courts. Where a circular helps you, you may hold the department to it. Where it hurts you, it cannot override the Act or a judgment. On section BMA s.41, section BMA s.42, section BMA s.43, section BMA s.72(c), section BMA s.10, section BMA s.10(3), section BMA s.59, section BMA s.3(1), section 139(1), section 139(4), section 139(5), section 6(6), 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 cuts both ways and is cited by both sides. Not a judgment. The statutory position is that s.41 of the Black Money Act empowers the Assessing Officer to direct an assessee, in a case where tax has been computed under s.10 in respect of undisclosed foreign income and asset, to pay by way of penalty in addition to any tax payable a sum equal to three times the tax computed under s.10; that s.43 empowers him to direct a resident other than not ordinarily resident within s.6(6) of the Income-tax Act, who has furnished a return under s.139(1), (4) or (5) of that Act and has failed to furnish information or has furnished inaccurate particulars in it about an asset located outside India or income from a source outside India, to pay a penalty of ten lakh rupees, subject to a proviso, substituted by the Finance (No. 2) Act, 2024 with effect from 1 October 2024, that the section does not apply in respect of an asset or assets other than immovable property whose aggregate value does not exceed twenty lakh rupees, the proviso before that substitution having excluded only bank accounts with an aggregate balance not exceeding a value equivalent to five hundred thousand rupees at any time during the previous year; and that by s.72(c), where an asset has been acquired or made prior to the commencement of the Act and no declaration in respect of it has been made under the declaration chapter, the asset is deemed to have been acquired or made in the year in which a notice under s.10 is issued by the Assessing Officer, and the provisions of the Act apply accordingly. It arises in Penalty, Assessment & Scrutiny and How Tax Law Is Read matters, on section BMA s.41, section BMA s.42, section BMA s.43, section BMA s.72(c), section BMA s.10, section BMA s.10(3), section BMA s.59, section BMA s.3(1), section 139(1), section 139(4), section 139(5), section 6(6) of the Income Tax Act 1961, and was decided by Not applicable — statutory text. 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. Keep the proviso to s.3(1) and s.72(c) apart in the argument: the first fixes the year in which the value is charged, the second deems the year of acquisition. They are different provisions doing different work and an answer to one is not an answer to the other. Attack the s.41 penalty through the s.10 computation: the penalty is a sum equal to three times the tax computed under s.10 and has no independent base, so a reduction in the assessment reduces it arithmetically and a quashed assessment leaves nothing to multiply. For a s.43 penalty, identify the previous year of the default and apply the proviso as it stood for that year — the twenty lakh rupee aggregate-value test for assets other than immovable property applies from 1 October 2024, and before that the exclusion was only for bank accounts with an aggregate balance not exceeding five hundred thousand rupees. Note that s.43 says the Assessing Officer "may direct" and that the section bites only a resident other than not ordinarily resident within s.6(6) of the Income-tax Act who has furnished a return under s.139(1), (4) or (5); take both points on the facts before arguing quantum.
Still good law. So far as it can be established from the departmental pages, this is the current text. The qualification matters and is this: none of the Black Money Act pages carries a "Year:" value, so currency rests on the footnotes rather than on an edition stamp. The s.43 page records the only amendment relevant here, the substitution of the proviso by the Finance (No. 2) Act, 2024 with effect from 1 October 2024, and prints the pre-substitution proviso in full, which is internally coherent with the s.42 page read alongside it, which carries the same substituted proviso and the same footnote. The s.41 and s.72 pages print no footnote at all, which records no amendment to them but does not prove there has been none. I did not verify the Finance (No. 2) Act, 2024 against the Act itself. `decided_on` is 2024-10-01, the date from which the current s.43 proviso operates, which is the most recent dated change in this entry; s.41 and s.72 are given as printed and no date of change is recorded for them. I did not read any judgment on this pass; the library's own decisions on ss.41, 43 and 72(c) are named in why_it_matters and nothing is stated here about what they hold. 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.
SOURCING. Section 41 was taken from incometaxindia.gov.in/w/section-41-117, s.43 from incometaxindia.gov.in/w/section-43-114 and s.72 from incometaxindia.gov.in/w/section-72-96, each identified by the Act name the page prints. The URL shape is treacherous on this site and was checked every time: /w/section-41-116 is s.41 of the Arbitration and Conciliation Act, 1996, /w/section-41-118 is s.41 of the Code of Criminal Procedure, 1973, /w/section-72-95 is the Arbitration and Conciliation Act again, /w/section-72-100 is the Consumer Protection Act, 2019, and /w/section-72-107 is the Indian Penal Code, 1860. NO YEAR STAMP on any of the three Black Money pages — the "Year:" field is present and blank. FOOTNOTES. The s.41 page prints NO footnote and the s.72 page prints NO footnote. The s.43 page prints one, transcribed verbatim: "Substituted by the Finance (No. 2) Act, 2024, w.e.f. 1-10-2024. Prior to its substitution, proviso read as under: Provided that this section shall not apply in respect of an asset, being one or more bank accounts having an aggregate balance which does not exceed a value equivalent to five hundred thousand rupees at any time during the previous year." That footnote is the evidence both for the current threshold and for what it replaced. WHAT IS NOT ESTABLISHED. I did not verify the short title or number of the Finance (No. 2) Act, 2024 against a government source and give it as the page prints it. The corresponding penalty in s.42, for failure to furnish the return at all, was read at /w/section-42-115 and carries the same twenty lakh rupee proviso with the same 2024 substitution footnote; it is NOT the subject of this entry and nothing further is said about it. s.72 is a removal-of-doubts provision at the end of the declaration chapter and its clauses (a) and (b) refer to ss.59, 60, 61 and 69 of this Act, which I have not read; nothing is stated about those sections here beyond the words of s.72 itself. Because the pages carry no Year stamp, currency rests entirely on the footnotes, and no later edition of any of the three sections was located. 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.
Not a judgment. The statutory position is that s.41 of the Black Money Act empowers the Assessing Officer to direct an assessee, in a case where tax has been computed under s.10 in respect of undisclosed foreign income and asset, to pay by way of penalty in addition to any tax payable a sum equal to three times the tax computed under s.10; that s.43 empowers him to direct a resident other than not ordinarily resident within s.6(6) of the Income-tax Act, who has furnished a return under s.139(1), (4) or (5) of that Act and has failed to furnish information or has furnished inaccurate particulars in it about an asset located outside India or income from a source outside India, to pay a penalty of ten lakh rupees, subject to a proviso, substituted by the Finance (No. 2) Act, 2024 with effect from 1 October 2024, that the section does not apply in respect of an asset or assets other than immovable property whose aggregate value does not exceed twenty lakh rupees, the proviso before that substitution having excluded only bank accounts with an aggregate balance not exceeding a value equivalent to five hundred thousand rupees at any time during the previous year; and that by s.72(c), where an asset has been acquired or made prior to the commencement of the Act and no declaration in respect of it has been made under the declaration chapter, the asset is deemed to have been acquired or made in the year in which a notice under s.10 is issued by the Assessing Officer, and the provisions of the Act apply accordingly.
TaxSphere, “Statutory position — ss.41 and 43 of the Black Money Act and s.72(c): the penalty of three times the tax computed under s.10, the Rs 10 lakh penalty for not reporting a foreign asset in the return with its twenty lakh rupee proviso from 1 October 2024, and the deemed year of acquisition for an asset acquired before commencement”, https://taxnotice.vittsphere.com/caselaw/case/statutory-position-bma-41-43-72c-penalty-and-the-transitional-year/ (validity last checked 2026-09-17)
The judgment itself is a government work and may be quoted freely. The summary, the validity note and the reasoning on this page are this library's own writing: quote them with attribution, and please do not present either as the words of the court — this page keeps the two apart and so should a quotation of it.
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
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?
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?
Can I take an assessment under the Black Money Act straight to the High Court?
The department has issued a Black Money Act notice for a foreign bank account opened in 2007. The Act only came into force in 2015. On what does the charge on that asset actually rest, and in which year is it charged?
