2016 (7) TMI 402 - HC - Income Tax

Settlement Application - undisclosed foreign income and assets - applicability of Black Money (Undisclosed Foreign Income Tax and Assets) and Imposition of Tax Act, 2015 - Held that - In the light of the stand taken which is based on the Explanatory note dated 02.07.2015 issued in Circular No.12 of 2015, as the Black Money (Undisclosed Foreign Income Tax and Assets) and Imposition of Tax Act, 2015 comes into effect from 01.07.2015 and the petitioners had filed their Return of Income on 21.05.2015 and notice was issued under Section 148 of the Income Tax Act by the Assessing Officer on 29.05.2015 which is before coming into effect of the provisions of the Black Money Act, 2015, the applications submitted by the petitioners before the Commission are maintainable. Accordingly, the Writ Petitions are allowed and the impugned orders are set aside and the petitioners are directed to file an application before the Income Tax Settlement Commission, which shall be considered by the Commission in accordance with the provisions of the Act.

Summary

Issues:
Challenging orders passed by the Income Tax Settlement Commission on jurisdiction to entertain applications offering undisclosed foreign income and assets.

Analysis:
The petitioners filed writ petitions challenging orders by the Income Tax Settlement Commission dated 30.06.2015 and 15.07.2015, rejecting their applications for undisclosed foreign income and assets. The Commission stated it lacked jurisdiction to entertain such applications under the Income Tax Act. The petitioners re-submitted applications, but they were also rejected based on jurisdictional grounds. The respondents argued that the Black Money Act, 2015 came into effect on 01.07.2015, after the petitioners filed their returns and received notice under Section 148. The respondents contended that the applications were maintainable under the new Act.

The Court considered the stand taken by the respondents based on the Black Money Act, 2015 coming into effect on 01.07.2015. Since the petitioners had filed their returns and received notice before this date, the Court held that the applications submitted by the petitioners before the Commission were maintainable. Consequently, the Court allowed the writ petitions, set aside the impugned orders, and directed the petitioners to file applications before the Income Tax Settlement Commission for consideration under the provisions of the new Act. No costs were awarded, and connected Miscellaneous Petitions were closed.