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TMI Blog2023 (7) TMI 1561X X X X Extracts X X X X X X X X Extracts X X X X ..... t, have filed the appeals in form 3 before the CIT(A)-51 instead of Hon'ble ITAT. The assessee on becoming aware of the said oversight, filed the appeal in Form 3 before the ITAT on 12/05/2023 resulting in a delay of 16 days. The assessee accordingly has prayed that the delay in filing the appeal is due to genuine inadvertent mistake caused through oversight and had no intention to jeopardize the interest of the Revenue by delaying the filing of appeal. Accordingly, assessee prayed for condoning the delay and admission of the appeals. The Ld. DR opposed to the admission of the appeals by condoning the delay. 4. We heard the parties and perused the materials on record. Along with the affidavit for condonation of delay, the assessee has filed Form 3 which was inadvertently filed before the CIT(A) on 15/3/0223- which substantiates that the assessee has mistakenly filed the appeal before the CIT(A) instead of the Tribunal through oversight with no malafide intention. We are therefore of the view that there is a reasonable and sufficient cause for the delay in filing the appeal before the Tribunal and following the Hon'ble Supreme Court decision in the case of Collector, Land Acquisiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancial interest / investment in an off-shore entity thereby violated provisions of section 43 of BMA. The Assessing Officer levied a penalty of Rs.10 lakhs for each of the assessment years under consideration. Aggrieved, the assessee preferred an appeal before the CIT(A). 8. The CIT(A) confirmed the levy of penalty by holding that - "6.8 In my view, for the purpose of section 43 of the BMA, there is no onus on the AO to demonstrate that the funds or assets in these accounts were owned by the assessee or beneficially owned by him. Section 43 of the Act has two limbs with respect to non-disclosure - the first being failure to furnish any information sought in the return filed under section 139(1) and second being furnishing of inaccurate particulars in such return relating to any asset located outside India, held by him as a beneficial owner or otherwise or in respect of which he was a beneficiary, or in relation to any income from a source located outside India. The term "fails to furnish any information" is sufficient to include in its ambit non-disclosure of a foreign asset. In the present case, it was mandatory for the assessee to disclose the foreign assets in the return. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so the disclosure obligation was very much applicable to him. Further, the facts in the case of the assessee are different from those in the case of Leena Gandhi Tewari (supra) and so the case law cannot be applied to the case of the assessee. 6.12 In light of the above discussion, I am convinced that the AO is correct in proceeding to levy the penalty under section 43 of the BMA. The action of the AO is upheld. Ground nos. 1 to 4 raised by the assessee are decided against her and stand dismissed." 9. The Ld.AR submitted that the assessee is only named in the investment holdings for the investments made by her husband for administrative convenience. It is submitted that the husband, Mr. R Venkataraman has declared the said investments in Schedule FA in his return of income (page 15 of the paper book filed for A.Y. 201617). The Ld.AR submitted that the assessee being the secondary holder of the investments , did not file the details in Schedule FA while filing the return of income. The Ld.AR drew our attention to the ledger copies to substantiate that the investments were actually made by the husband of the assessee. Being a house-wife the assessee does not have any source to m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of ten lakh rupees: Provided that this section shall not apply in respect of an asset, being one or more bank accounts having an aggregate balance which does not exceed a value equivalent to five hundred thousand rupees at any time during the previous year. Explanation.-The value equivalent in rupees shall be determined in the manner provided in the Explanation to section 42. 12. From the plain reading of the above it is clear that the assessee is required to furnish the details of any asset outside India in the return of income i.e. it is not only the undisclosed asset but any asset held by the assessee as a beneficial owner or otherwise. It is also to be noted that the section uses the words " the Assessing Officer may direct" which would mean that the power of the Assessing Officer to levy penalty for noncompliance is discretionary and not mandatory. 13. The plea of the assessee is that the impugned assets primarily belonged to the husband of the assessee who has disclosed the same in the return of income in Schedule FA and therefore it can not be said that the details of the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17) and the bank statement of R Venkat Raman with the outflow of funds towards the investment in Global Dynamic Opportunities Fund Ltd.(page 26 of paper book of AY 2016-17). Similar details are available in paper book submitted for other assessment years under consideration also. Therefore the ld AR contended that the asset is actually owned by the husband of the assessee and the assessee's name is included only for administrative convenience. Accordingly the nondisclosure is an inadvertent error on the part of the assessee with no intention to evade any tax. From the perusal of the records, it is noticed that the impugned assets are disclosed in the return of income of assessee's husband and that the source for acquisition of the said assets has flown from the husband's sources. This substantiates the submission that the assessee is not a joint owner of the impugned asset but only a secondary owner. So there is merit in the contention that the owner of the asset (i.e.assessee's husband) has disclosed the assets and the assessee being the secondary owner did not disclose under the bonafide belief that she is not required disclose. 15. The alternate contention is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd devoid of any ulterior motives. Accordingly the Assessing Officer is not justified in exercising the discretionary power just because it would be lawful to do so. The discretionary power would have to be exercised having regard to the facts of each case in a fair, objective and judicious manner and the intention of the relevant legislation. Further in the present case there are sufficient prima facie evidences well demonstrated by the assessee not to doubt bona fide intentions and therefore it is not just and fair for the assessee to face stringent penal consequences under BMA. Accordingly the penalty levied for AY 2016-17 under section 43 of BMA is hereby deleted.
17. The facts and grounds for AY 2017-18 to 2019-20 are identical to AY 2016-17. Therefore the findings based on facts elaborated in the preceding paragraphs are mutatis mutandis applicable to AY 2017-18 to 2019-20 considering the parity of facts. We therefore hold that the penalty levied for AY 2017-18 to 2019-20 under section 43 of BMA are also to be deleted.
18. In result all these appeals are allowed in favour of the assessee.
Order pronounced in the open court on 10/07/2023. X X X X Extracts X X X X X X X X Extracts X X X X
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