BMA 2015 s.43

BMA 2015 s.43 — the law in short

What the courts have decided on section BMA 2015 s.43, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Krishore Kumar Rajagopal v DDIT ITATHelps taxpayer
  I left my foreign ESOPs out of Schedule FA. Is the Rs 10 lakh penalty automatic?
  No. Section 43 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015 says the officer 'may direct' a penalty, so the levy is discretionary. Where the ESOP perquisite had already suffered TDS and the capital gain on sale was offered to tax, the Tribunal treated the omission from Schedule FA as a technical breach and deleted the Rs 10 lakh penalty for each year.
• Vinil Venugopal v DDIT (Special Bench) ITATHelps taxpayer
  Is the Rs 10 lakh penalty under s.43 of the Black Money Act automatic once the officer finds a foreign asset missing from Schedule FA?
  No. A Special Bench of the Tribunal, answering a reference on the point, held that the word 'may' in s.43 carries its plain meaning, is directory, and cannot be read as 'shall'. The imposition of the penalty is therefore not mandatory and not automatic: the Assessing Officer has a discretion to impose it or not, depending on the facts and circumstances of each case. The Special Bench answered the reference only; it did not examine the merits of the penalty orders before it, and directed the appeals to be placed before the Division Bench for disposal.
• Sanjay Bhupatrai Shah v DDIT ITATHelps taxpayerValidity unconfirmed
  My name is on a foreign account only as a second holder and my son owns it. Is the Rs 10 lakh penalty still mine?
  No, on these facts. The Mumbai Tribunal deleted s.43 penalties on a father who had been named as a joint holder of a foreign investment for administrative convenience where the son had declared full ownership of it. The omission from Schedule FA rested on a bona fide belief that he was not the owner, and financing an asset does not make the financier its owner.
• Ocean Diving Centre Ltd v CIT(A) ITATHelps taxpayer
  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?
  No, on these facts. The Mumbai Tribunal cancelled a s.43 penalty where a resident company's investment in Panamanian entities was shown in its balance sheet and in another schedule of the return but not in Schedule FA. The officer has a discretion under s.43 and it has to be exercised judicially; where there is no defiance of law and no mala fide or dishonest breach, the section is not attracted.
• CBDT instruction of 18 August 2025 on Black Money Act prosecutions CBDT Circulars & InstructionsHelps taxpayer
  The foreign asset is small and no penalty is proposed. Can they still prosecute me for leaving it out of Schedule FA?
  Not on the Board's own instruction. It directs that prosecution under s.49 or s.50 of the Black Money Act is not to be initiated in cases where penalty under s.42 or s.43 is not imposed or not imposable because the asset falls within the proviso to those sections - assets other than immovable property whose aggregate value does not exceed Rs 20 lakh. It amends an earlier instruction of 15 March 2022.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.