BMA s.11

BMA s.11 — the law in short

What the courts have decided on section BMA s.11, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Sanjay Bhandari v Income Tax Office High CourtHelps departmentNo later treatment found
  The assessment under the Black Money Act is not complete, and may now be time-barred. Can they still summon me on a s.51 complaint?
  Yes. The Delhi High Court refused to quash the summoning order, holding that Chapter V of the Black Money Act stands independent of any order made under the Act, so the initiation of prosecution is not dependent on the completion of assessment provided the ingredients of s.51 are made out. Sections 50 and 51 operate in different realms, and whether the conduct was preparation or a punishable attempt is a matter for trial.
• Bindu Todi v DDIT ITATHelps taxpayerNo later treatment found
  My Black Money Act assessment was passed more than two years after the s.10 notice. The Department says the covid relaxation law extended the time. Did it?
  Not for the Black Money Act. Section 11(1) gives two years from the end of the financial year in which the s.10(1) notice was issued, and the Delhi Bench quashed an assessment passed outside that period. Notification No. 113/2021 dated 17 September 2021 issued under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act 2020 extended time only for the Income-tax Act and the Prohibition of Benami Property Transactions Act, not for every specified Act, and did not extend the time for completing an assessment under the Black Money Act.
• Sunil Kumar Alagh v DDIT (Inv) ITATHelps taxpayerNo later treatment found
  The officer excluded the whole period he spent chasing a foreign tax authority. Does the exclusion start before the s.10(1) notice was served?
  No. The time excluded under Explanation 1(iii) to s.11 of the Black Money Act cannot include a period before the s.10(1) notice was served, because exclusion presupposes that the period was inside the limitation to begin with. On the facts the excludable period ran from service of the notice on 25 November 2020 to receipt of the last reply on 25 May 2021, being 182 days and not 195, which moved the last date for the assessment to 29 September 2023. The order passed on 30 September 2023 was one day late and was quashed.
• Pachamuthu Kumar v ADIT (Investigation) ITATHelps taxpayerNo later treatment found
  The officer issued a fresh s.10 notice two years after the first one and then assessed. Does the clock run from the second notice?
  No, where the second notice is in substance the same as the first. The Chennai Bench held that a successor officer ought to have continued the proceedings begun by his predecessor under s.7(1), so limitation under s.11(1) ran from the first notice of 7 January 2019, the assessment had to be made by 31 March 2021, and the order passed on 25 March 2023 was hopelessly time-barred.
• Section 84 of the Black Money Act - the Income-tax Act provisions applied CBDT Circulars & InstructionsCuts both waysNo later treatment found
  Which provisions of the Income-tax Act apply to the Black Money Act, and can the officer borrow one that is not on the list?
  Section 84 applies a closed list: clauses (c) and (d) of s.90(1), clauses (c) and (d) of s.90A(1), ss.119, 133, 134, 135 and 138, the whole of Chapter XV, and ss.237, 240, 245, 280, 280A, 280B, 280D, 281, 281B and 284 of the Income-tax Act, with necessary modifications, as if they referred to undisclosed foreign income and asset instead of to income-tax. The list is expressed as an enumeration and the decided points located in this area turn on what is left out of it. Sections 234A, 234B and 234C are not on it, which is why the Chennai Bench in Pascal Postel held that the interest charge in s.40(2) has no advance-tax machinery to operate on; s.230 is not on it either, which is the omission on which Preetha Krishna (Madras High Court) is understood to turn, though no copy of that judgment was opened for this note.
• Statutory position — ss.10 and 11 of the Black Money Act: the s.10(1) notice, the enquiry, the s.10(3) assessment and the s.10(4) best judgment assessment, and the two-year limit in s.11 with the exclusions in Explanation 1 and the one-year cap on the exchange-of-information exclusion CBDT Circulars & InstructionsCuts both waysValidity unconfirmed
  I have an assessment order under s.10(3) of the Black Money Act. The department says the limitation was extended because a request for exchange of information was pending. How long is the period, and how much can that request add to it?
  Two years, and the exchange-of-information exclusion is capped. Section 11(1) provides that no order of assessment or reassessment shall be made under s.10 after the expiry of two years from the end of the financial year in which the notice under s.10(1) was issued by the Assessing Officer. Explanation 1 to s.11 excludes, in computing that period, (i) the time taken in reopening the whole or any part of the proceeding, (ii) the period during which the assessment proceeding is stayed by an order or injunction of any court, and (iii) the period commencing from the date on which a reference or first of the references for exchange of information is made by an authority competent under an agreement referred to in s.90 or s.90A of the Income-tax Act or under s.73 of this Act and ending with the date on which the Principal Commissioner or the Commissioner last receives the information so requested "or a period of one year, whichever is less". The exclusion in clause (iii) therefore cannot add more than one year however long the request remains outstanding. A proviso to the Explanation extends the remaining period to sixty days where, after the exclusion, less than sixty days are left. On the machinery itself: s.10(1) empowers the Assessing Officer, on receipt of information from an income-tax authority or any other authority or on information coming to his notice, to serve a notice requiring production of accounts, documents or evidence on a date to be specified, and to serve further notices; s.10(2) allows him to make such enquiry as he considers necessary; s.10(3) requires him, after considering what he has obtained under s.10(1), what he has gathered under s.10(2) and any other evidence produced by the assessee, to assess or reassess by an order in writing and determine the sum payable; and s.10(4) provides that on a failure to comply with all the terms of the s.10(1) notice he shall, after taking into account all relevant material gathered and after giving the assessee an opportunity of being heard, make the assessment or reassessment to the best of his judgment and determine the sum payable.

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.