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TMI Blog2023 (8) TMI 1624X X X X Extracts X X X X X X X X Extracts X X X X ..... with the return furnished under section 139 of the Act .
Case in hand is not the case of deliberate or malafide or dishonest action or non-action or breach or defiance or disregard of statutory provisions of law, but infact, as the Assessee had shown the foreign investment in Schedule 'FA' initially in the AY 2012-13 itself when such investment was made and thereafter occasionally in Schedule 'Holding Status' but continuously in its books of account, therefore there is no justification for imposition of penalty - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... e had narrated about the investment made by it in the BVI entity named M/s Shrem Global Limited which is a 100% wholly owned subsidiary company of the assessee i.e. M/s Shrem Alloys Private Limited. In the Para 7 & 8, the assessee stated that an oversight by mistake by the executive of the company occurred due to which no details were filled in Part B of the Schedule FA in the return filed u/s 139(1) of the Act." 6. The Assessing Officer, though considered the above explanation of the Assessee, but not found acceptable and, therefore, imposed a penalty of Rs.10,00,000/- under section 43 of the BMI Act by concluding as under:- "5. Thus, it is clearly evident that the assessee failed to furnish any information or has furnished inaccurate particulars in such return relating to any asset (including financial interest in BVI entity named M/s Shrem Global Limited) located outside India, held as a beneficial owner of otherwise, during the previous year, in the return of income filed under sub section (1) or (4) of section 139 of the Income Tax Act, 1961 for which penalty provisions are clearly attractable against the assessee under section 43 of the Black Money (Undisclosed Foreign In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith section 153A of the Act. 9.1 The Assessee declared its foreign asset in the return filed under section 153A of the Act. Therefore, subsequently, on the information vide letter dated 06/08/2019 received for not disclosing the investment in foreign asset or financial interest in Schedule FA in the specified part of the return of income for A.Y. 2014-15, the notices under section 43 of the BMI Act were issued, by which the Assessee was show caused, in response to which, the Assessee filed its reply and mainly claimed that the Assessee due to oversight or mistake by the executive of the company failed to file requisite details in part B of the Schedule FA in the return filed under section 139(1) of the Act. The said explanation was not found acceptable by the Assessing Officer, who by holding that the Assessee has failed to prove that there existed a reasonable cause for contravening the said provisions of the BMI Act and, therefore, the Assessee was in default of failure to comply with the provisions of BMI Act in respect of foreign asset/ foreign investment or financial interest in Sechdule FA of the return of income; consequently, imposed a penalty of Rs.10,00,000/- under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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." 9.5 From the provisions of the BMI Act, it is clear that discretion has been given to the Assessing Officer for imposition of penalty by using word "may" which goes to show that levy of penalty is discretionary but not mandatory. No doubt, the Authority vested with discretionary powers is empowered to exercise the discretion as per his own wisdom, however, the discretion has to be exercised judicially and in reasonable and justified manner and by considering the relevant circumstances and in case the Assessee is able to discharge its burden for reasonable cause, then the discretion against the Assessee has to be used cautiously and consciously. 9.6 The Hon'ble Apex Court in M/s Hindustan Steel Ltd. vs State of Orissa (1972) 83 ITR 26(SC) also reminded that an order imposing p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as in Schedule 'Holding Status'. Subsequently, in the A.Ys 2014-15, 2015-16, 2017-18, the Assessee has not disclosed the said investment in Schedule FA but shown in Schedule 'Holding Status' except in the A.Y. 2017-18. From the chart it appears that there was slight confusions in the mind of the Assessee qua disclosure of investment of Rs.46,17,046/- as sometime disclosed in Schedule FA and sometime disclosed in Schedule 'holding status' only; but it is undisputed fact that the Assessee has duly disclosed the investment in its books of account continuously. Further, the Assessee may be belatedly, but infact shown / disclosed the said investment in Schedule FA as well as in Schedule 'Holding Status' while filing its return of income under section 153A of the Act. From the provisions of section 153A(1)(a), it is clear that for processing the return filed in response to the notice under section 153A of the Act, the same provisions of the Act shall be applicable as applicable to the return filed u/s 139 of the Act, therefore return furnished u/s 153A of the Act can be treated at par with the return furnished under section 139 of the Act . 9.10 From the aforesaid considerations ..... X X X X Extracts X X X X X X X X Extracts X X X X
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