BMA s.40

BMA s.40 — the law in short

What the courts have decided on section BMA s.40, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• 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.
• 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.

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.