2023 (4) TMI 201 - HC - Income Tax

Black Money (Undisclosed Foreign Income and Assets) - Proceedings triggered pursuant to the notice issued under Section 10(1) of the 2015 Act - information with regard to the fact that the petitioner was, perhaps, holding undisclosed assets in the British Virgin Islands came to light sometime in 2013 on account of an investigation carried out by the International Consortium of Investigative Journalists - Whether once the petitioner s declaration under Section 59 of the 2015 Act was considered ineligible, then proceedings under the 2015 Act cannot be triggered - when did the respondents/revenue acquire tangible information with regard to the fact that the petitioner had held undisclosed assets? - HELD THAT - The date on which the respondents/revenue acquired knowledge would then trigger the guidelines that the CBDT framed on 23.01.2018, which required it to issue notice under Section 10(1) of the 2015 Act within thirty (30) days of the end of the FY when it acquired such knowledge. Whether provisions of the 2015 Act would apply to those undisclosed assets which had been acquired prior to 01.07.2015? - Petioner at this stage, says that there are several other issues/grounds that the petitioner would want to put forth for consideration of this court. Mr Vohra says that the additional grounds find place in the writ petition. Matter requires further examination. List the matter on 27.04.2023.

Summary

Issues involved:
The petitioner challenged a notice issued under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, along with the rejection of an application and a show cause notice for assessment.

Challenge to Notice dated 08.04.2022:
The petitioner challenged a notice issued under Section 10(1) of the 2015 Act, along with the rejection of an application and a show cause notice for assessment. The petitioner declared undisclosed assets in 2015, which were rejected by the revenue. The revenue claimed prior knowledge of the assets, leading to the notice being issued. The petitioner argued that proceedings cannot be triggered after rejection of the declaration.

Rejection of Application and Show Cause Notice:
The rejection of the petitioner's application was based on various grounds, including the timing of the declaration, failure to disclose assets earlier, and the ineligibility under the 2015 Act. Subsequently, a show cause notice was issued under Section 10(3) of the 2015 Act, leading to further legal arguments regarding the validity of the notice.

Legal Arguments and Submissions:
The petitioner's counsel argued based on the CBDT circular, timeline for issuing notices, and retroactive application of the 2015 Act. The revenue's counsel countered, claiming lack of bona fide in the declaration and prior knowledge of the undisclosed assets. The court acknowledged the need for further examination of when the revenue acquired information and the applicability of the Act to assets acquired before 01.07.2015.

Court Decision and Next Steps:
The court issued notice to the parties for further submissions, with a timeline for filing affidavits and set the next hearing date. No coercive measures were to be taken against the petitioner until the next hearing. The parties were instructed to act based on the digitally signed copy of the order.