BMA s.1(3)

BMA s.1(3) — the law in short

What the courts have decided on section BMA s.1(3), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Union of India v Gautam Khaitan Supreme CourtHelps departmentNo later treatment found
  The department says the Black Money Act applies to my foreign account from July 2015. Is that retrospective?
  No. Notifying 1 July 2015 as the commencement date of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015 did not make the Act retrospective. The date was advanced only so the one-time compliance window in s.59 could operate, and tax under s.3 is still charged only from assessment year 2016-17 onwards.
• JCIT v Vikash Marda ITATHelps taxpayerNo later treatment found
  They have issued notices under the Black Money Act for 2014-15 and 2015-16. Can the Act reach those years at all?
  No. The Kolkata Bench held that the first previous year under the Act is financial year 2015-16, so the first assessment year it can reach is 2016-17, and assessments framed for 2014-15 and 2015-16 were without jurisdiction. The batch is nine Revenue appeals covering both the assessments made under s.10(3) and the deletion of penalties levied under ss.41 and 43, and all nine were dismissed. On the asset, a fund in the United States built out of salary earned there while the assessee was a tax resident of the United States, and taxed there, was held not to fall within the definition of undisclosed asset under the Act.
• Statutory position — s.3 of the Black Money Act: the charge at thirty per cent, the proviso to s.3(1) that fixes the year of charge for an undisclosed foreign asset, and what ss.4 and 5 bring in and refuse to take out CBDT Circulars & InstructionsCuts both waysValidity unconfirmed
  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?
  On s.3(1) and its proviso. The Act came into force on 1 July 2015 (s.1(3): "Save as otherwise provided in this Act, it shall come into force on the 1st day of July, 2015"). Section 3(1) charges tax "on every assessee for every assessment year commencing on or after the 1st day of April, 2016 ... in respect of his total undisclosed foreign income and asset of the previous year at the rate of thirty per cent of such undisclosed income and asset". The proviso to s.3(1) is the provision that matters for an old asset: "Provided that an undisclosed asset located outside India shall be charged to tax on its value in the previous year in which such asset comes to the notice of the Assessing Officer." So the year of charge for an asset is not the year of acquisition but the year of coming to notice, and s.3(2) defines the "value of an undisclosed asset" as its fair market value determined in the prescribed manner. Section 4(1) puts three things into the total: (a) undisclosed income from a source outside India, (b) income from a source outside India where a return was required under s.139 of the Income-tax Act and none was furnished in time, and (c) the value of an undisclosed asset located outside India. Section 4(2) keeps out of the total any variation made under ss.29 to 43C, ss.57 to 59 or s.92C of the Income-tax Act, and s.4(3) keeps what is charged here out of total income under that Act. Section 5(1)(i) forbids any deduction for expenditure or allowance and any set off of loss, "whether or not it is allowable in accordance with the provisions of the Income-tax Act"; s.5(1)(ii) allows one reduction only — income already assessed or assessable under the Income-tax Act or under this Act is reduced from the value of the undisclosed asset if the assessee furnishes evidence to the Assessing Officer's satisfaction that the asset was acquired from that income — and s.5(2) prorates that reduction for immovable property.

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.