2019 (6) TMI 406 - HC - Income Tax

Settlement Commission order u/s 245D(4) for undisclosed foreign income and assets under the Black Money Act - Jurisdiction in favour of the Settlement Commission to decide the issue pertaining to undisclosed foreign income and assets under the Black Money Act - HELD THAT - As submitted that as per the provisions of sub-section (3) of Section 4, the income included in the total undisclosed foreign income and assets under the Black Money Act, does not form part of the total income under the Income Tax Act. Thus, the Settlement Commission has no authority and jurisdiction to deal with the undisclosed foreign income and assets. Additional Solicitor General of India, further submitted that till the matter is heard by the learned Division Bench, atleast the observation be made that the order under challenge dated 30.1.2019 shall not confer jurisdiction in favour of the Settlement Commission to decide the issue pertaining to undisclosed foreign income and assets under the Black Money Act. Issue notice, returnable on 17.6.2019.

Summary

Issues involved:
Challenge to order of Income Tax Settlement Commission under Section 245D(4) of the Income Tax Act regarding undisclosed foreign income and assets under the Black Money Act.

Analysis:

1. The petitioner challenged the order dated 30.1.2019 of the Income Tax Settlement Commission, Additional Bench – II, Mumbai, under Section 245D(4) of the Income Tax Act. The Additional Solicitor General of India highlighted the preamble of the Black Money Act, emphasizing its provisions to address undisclosed foreign income and assets.

2. The Additional Solicitor General argued that the Settlement Commission should have distinguished between income earned and assets acquired outside India. Referring to sub-section (3) of Section 4 of the Black Money Act, it was contended that income included in undisclosed foreign income and assets does not constitute part of the total income under the Income Tax Act, thus the Settlement Commission lacks jurisdiction over such matters.

3. The petitioner's counsel requested that until the matter is heard by the Division Bench, it should be acknowledged that the order dated 30.1.2019 does not grant jurisdiction to the Settlement Commission to address undisclosed foreign income and assets under the Black Money Act. Consequently, notice was issued returnable on 17.6.2019, and it was clarified that the order should not be interpreted as conferring jurisdiction under the Black Money Act.

4. Direct service was permitted in the case, ensuring that the concerned parties are informed of the proceedings and the limitations on the Settlement Commission's authority regarding undisclosed foreign income and assets.