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TMI Blog2024 (6) TMI 1438X X X X Extracts X X X X X X X X Extracts X X X X ..... has erred in deleting the penalty imposed of Rs.10 lakhs u/s. 43 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, in the case of the assessee, ignoring the fact that disclosure of investment in foreign asset in Schedule FA in the return filed u/s.153A of the Act does not satisfy the requirement of law when section 43 of BMA clearly specifies the disclosure in return filed u/s. 139 of the Act. iii. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the penalty imposed of Rs.10 lakhs u/s. 43 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, in the case of the assessee, without appreciating that the term "fails to furnish any information" is sufficient to include in its ambit non-disclosure of a foreign asset. iv. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the penalty imposed of Rs.10 lakhs u/s. 43 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, ignoring the answer to Question No.18 of CBDT's Circular No.13 of 2015 dated 06.07.2015, which is squarely applicabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 016-17, the assessee filed the submissions on 30/03/2021, the details of which are given as under: "The assessee submitted that it is not the case of the Department that the said asset is an undisclosed foreign asset and the only fault is that the advance given by him has not been specifically noted as a separate disclosure in the ITR filed for A.Y.2016-17 though it has been duly disclosed in ITRs of earlier and subsequent years. The facts of the case do not warrant imposition of penalty u/s. 43 of the Act on the following reasons:- 1. Adequate and sufficient disclosure has been made by the assessee in the return of the earlier and subsequent years. 2. The status of the foreign asset held by the assessee has undergone no change since the year of purchase. 3. No penalty can be imposed in absence of any basis for attracting chargeability under section 3 of the Act. 4. No penalty is leviable even as per answer to Question No. 18 of FAQs issued on 6th July, 2015. 5. The asset, being a debt, is located in India, and hence there is no failure on his part. 6. Penalty cannot be levied as reasonable causes existed for nondisclosure of the advance in the ITR of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the builder outside India and failed to disclose in his return of income for A.Y 2016-17 as mandated by the provisions of the Black Money Act. * The assessee did not submit anything about the reasonable cause which existed for non-disclosure of the advance in the ITR of the assessee at any time during the proceedings before Intelligence and Criminal Investigation in various responses to notice u/s 133(6) dated 09.07.2018 and also during the penalty proceedings u/s 43 of the Act vide notice dated 23.12.2019. * The cases laws relied upon by the assessee are distinguishable on facts and hence not applicable to the assessee's case. 2. At this juncture, it is pertinent to refer to the provisions of section 43 of the Black Money Act, 2015, which states as under:- "If any person, being a resident other than not ordinarily resident in India within the meaning of clause (6) of section 6 of the Income-tax Act, who has furnished the return of income for any previous year under sub-section (1) or sub-section (4) or sub-section (5) of section 139 of the said Act, fails to furnish any information or furnishes inaccurate particulars in such return relating to any asset (includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estment made in immovable property in Dubal. While the assessee had claimed that the foreign asset was duly disclosed in the ITRs of the preceding and the subsequent years and that there was no change in the in the status of the foreign asset since its purchase, the AO held that each assessment year is distinct and separate. According to the AO, the disclosure made in the preceding and succeeding assessment years would be of no help as far as the levy of penalty u/s 43 of BMA is concerned as each year was distinct and separate. Since the disclosure was not made in Schedule FA of the ITR for AY 2016-17, the AO levied the penalty of Rs 10,00,000/- u/s 43 of BMA for AY 2016-17. 9.4. The appellant on the other hand has vehemently argued that no penalty should have been levied as the foreign asset being investment in property in Dubai was duly disclosed in the Schedule FA of the ITRs for the preceding and succeeding assessment years and the omission to disclose the foreign asset in AY 2016-17 was just a bonafide inadvertent clerical mistake. According to the appellant, the nature and amount paid for the property continued to remain same to the present date. The appellant relied on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Hon'ble jurisdictional ITAT is clearly applicable to the facts of the present case where the assessee had duly disclosed the foreign asset initially in the ITR for AY 2013-14 and thereafter also for all years except the year under consideration i.e AY 201617. As held by the Hon'ble Mumbai ITAT in the case of Shrem Alloys Pvt. Ltd. (supra), this omission can at best be categorized as a bonafide inadvertent omission and cannot be held as a deliberate or malafide or dishonest action or breach or defiance of the law. Thus, it is held that it is not a fit case for levy of penalty u/s 43 of BMA. Therefore, the penalty of Rs. 10,00,000/- levied by the AO u/s. 43 of BMA in this case is accordingly deleted and these grounds of appeal are allowed." 8. Aggrieved by the above order of the Ld. CIT (A), this appeal has been filed before us. During the course of appellate proceedings the D.R. relied on the order of the Ld. assessing officer and reiterated that since the investments made in the Dubai property has not been disclosed in schedule FA of the return of income for the assessment year 2016-17, the penalty has rightly been imposed u/s. 43 of the BMA 2015. The assessee, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e non-disclosure of a foreign asset in the income tax return by itself is not a valid reason for penalty under the Black Money Act.
* The unambiguous intent of the legislature is to exclude trivial cases of lapses which can be attributed to a reasonable cause.
* Section 43 of the Black Money Act provides that the Assessing Officer "may" impose the penalty, and the use of the expression "may" signifies that the penalty is not to be imposed in all cases of lapses and that there is no cause-and-effect relationship simpliciter between the lapse and the penalty.
* Once there is a clear finding of bona fides in conduct, irrespective of whether such conduct is lawful or not, the penalty is not imposable unless the penalty is statutorily simply an automatic consequence, in cause and effect relationship."
11. Thus, considering the facts stated as above and the legal position in this regard, we, respectfully following the order of the coordinate Bench, Mumbai, hold that this is not a fit case where penalty u/s. 43 of BMA is imposable. Thus, the appeal of the revenue is dismissed.
12. In the result, the appeal is dismissed.
Order pronounced in the open court on 26.06.2024. X X X X Extracts X X X X X X X X Extracts X X X X
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