What the courts have decided on section BMA s.12, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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Pascal Postel v DDIT (Inv.)
ITATHelps taxpayerNo later treatment found
The officer has charged interest under s.40 of the Black Money Act on top of the tax. Is there any machinery for it, and can I still fight the quantum in the appeal against the rectification order?
Interest under s.40(2) was held unworkable, because the advance-tax machinery on which ss.234B and 234C of the Income-tax Act operate is absent from the Black Money Act, so there is no statutory liability to pay advance tax on which the interest can bite. Interest under s.40(1) was held not to arise where the foreign source itself was disclosed, the expression 'not disclosed' meaning complete suppression of the source and not a difference in the quantum assessed. On the procedural point, where an assessment order under s.10 is altered by a rectification order under s.12, the two are read together as one composite order, so the appeal against the rectified order carries the underlying quantum with it.
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Statutory position — s.15 of the Black Money Act and rule 6(4) of the Black Money Rules, 2015: what may be appealed to the Commissioner (Appeals), the thirty-day period and the one-year limit on condonation, and the rule that bars admission of the appeal unless the tax with penalty and interest on the undisputed liability has been paid
CBDT Circulars & InstructionsCuts both waysValidity unconfirmed
I want to appeal a Black Money Act assessment to the Commissioner (Appeals). Is there a pre-deposit, and if so on what amount — the whole demand or only the part I am not disputing?
On the part not objected to. Rule 6(4) of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Rules, 2015, notified by G.S.R. 529(E) dated 2 July 2015, reads: "No appeal under sub-section (1) of section 15 shall be admitted unless at the time of filing of the appeal the assessee has paid the tax alongwith penalty and interest thereon on the amount of liability which has not been objected to by the assessee." The condition is on admission, it bites at the time of filing, and it is measured by the liability not objected to — not by the whole demand. The same rule provides that the appeal is made in Form 2 (rule 6(1)), that the form, grounds and verification are signed and verified by the person authorised to sign the return of income under s.140 of the Income-tax Act (rule 6(2)), and that the appeal is accompanied by a fee of ten thousand rupees (rule 6(3)). Section 15(1) gives the right of appeal to any person objecting to the amount of tax on undisclosed foreign income and asset for which he is assessed, denying his liability to be assessed under the Act, objecting to any penalty imposed by the Assessing Officer, objecting to an order of rectification having the effect of enhancing the assessment or reducing the refund, or objecting to an order refusing to allow a claim for rectification under s.12. Section 15(3) requires the appeal to be presented within thirty days from the date of service of the notice of demand relating to the assessment or penalty, or from the date on which intimation of the order appealed against is served in any other case. Section 15(4) allows the Commissioner (Appeals) to admit a late appeal where he is satisfied that the appellant had sufficient cause for not presenting it in time and the delay does not exceed one year. Section 15(5) requires him to hear and determine the appeal and pass such orders as he thinks fit, with a proviso that an order enhancing the assessment or penalty shall not be made unless the assessee has been given a reasonable opportunity.
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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.
