What the courts have decided on section BMA s.17, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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Satish Gopal Rao v DDIT / ADIT (Inv.)
ITATHelps taxpayerNo later treatment found
The officer has used s.72(c) to bring my foreign bank interest and dividends into a later year. Does the deeming provision reach income as well as the asset?
No. The Mumbai Bench held that s.72(c) is a deeming provision applicable only to assets and cannot be extended to income components such as bank interest, dividends, redemption gains or consultancy receipts, because a deeming fiction cannot be expanded beyond the purpose for which it was enacted. On the facts it also accepted the assessee's explanations of two credits, supported by affidavits and documents, and deleted additions of Rs 3,17,53,800.
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Timothy John Brinkman v DDIT (Inv.)
ITATHelps taxpayerNo later treatment found
I am a foreign national who became resident in India and missed Schedule FA in my first return, but I put it right in a revised return. Is the Rs 10 lakh penalty still due?
Not on these facts. The Mumbai Bench deleted a penalty under s.43 where a British citizen, resident in India for a fixed five-year assignment, omitted his United Kingdom assets from Schedule FA in the original return and disclosed them in a revised return filed within the time allowed by s.139(5). The Tribunal held that the Revenue had not established that he had ever been an Indian citizen or that the foreign investments came out of undisclosed Indian income, and that the Act is aimed at undisclosed foreign income and assets, not at a bona fide omission.
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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.
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Sections 15 to 19 of the Black Money Act - the appeal machinery
CBDT Circulars & InstructionsCuts both waysNo later treatment found
What are the time limits, forms and fees for an appeal under the Black Money Act, and where do they differ from the Income-tax Act?
An appeal to the Commissioner (Appeals) lies under s.15(1) against the amount of tax on undisclosed foreign income or assets, against liability to be assessed under the Act, against a penalty, and against a rectification order or a refusal to rectify. It is filed in Form 2 with a fee of Rs 10,000 within thirty days, and Rule 6(4) bars admission unless the tax with penalty and interest on the liability not objected to has been paid. An appeal to the Tribunal lies within sixty days in Form 3 with a fee of Rs 25,000, with cross-objections in Form 4 within thirty days. An appeal to the High Court on a substantial question of law lies within 120 days. The critical departure from the Income-tax Act is that the power to condone delay is capped: one year before the Commissioner (Appeals) under s.15(4) and one year before the Tribunal under s.18(5), where ss.249(3) and 253(5) of the Income-tax Act contain no such ceiling.
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.
