9911796707
TMI Blog2025 (3) TMI 700X X X X Extracts X X X X X X X X Extracts X X X X ..... have failed to establish that the assessee was previously an Indian citizen or that the foreign investment was made using undisclosed income (black money) from India.
Furthermore, the authorities relied upon by the Ld. DR and the Ld. CIT(A) are factually distinguishable from the present case. Accordingly, the penalty of Rs. 10,00,000/- imposed under Section 43 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, is deleted. Appeal of the assessee is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by him over the course of his career and have not been earned while he was employed in India. Brief list of assets held by him, overseas: * 3 savings bank accounts & 1 current account with U.K. banks. * Joint investment with his wife in a house property located in the U.K.; * Investments in Foreign Assets managed by AFH Independent Financial Services Limited: 1) Canada life Offshore Bond (jointly held with my wife Mrs. Carolyn Brinkman); 2) Stocks and Shares ISA Scheme; 3) James Hay - Pension (FHJH1708); * Investment in Virgin Fixed Rate Cash ISA Issue 280. Days of stay in India: F.Y. 2018-19- 71 days (Non-resident) F.Y. 2019-20- 343 days (Resident but Not ordinarily Resident) F.Y. 2020-21- 365 days (Resident but Not ordinarily Resident) F.Y. 2021-22- 307 days (Resident) Thus, he has become a Tax resident in India during the Assessment Year 2022-23. Mr. Brinkman filed the Return of Income (ROI) by a wrong advice that his global income would only be taxable in India post the completion of 4+ years in India. Accordingly, the assessee e-filed his ROI for impugned assessment year in the United Kingdom on 06/04/2022 for the period from 06/04/2021 to 05/04/2022. Al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s declared in the revised return within the prescribed time frame, whether the assessee is liable for the imposition of a penalty. 5. Considering the submission of the Ld. DR, we find that the revenue authorities have referred the judgment related to the Hon'ble ITAT in the case of Nirmal Bhanwarlal Jain vs. CIT, BMA No.13/Mum/2023, date of order 31/07/2023, where it was held that even if a disclosure has been made about the foreign asset, but the assessee has filed inaccurate particulars about the foreign asset, the assessee was still liable for penalty under section 43 of the Black Money (UFIA) and Imposition of Tax Act, 2015 and the co-ordinate bench of ITAT rejected the appeal of the assessee. In argument, the Ld.DR relied on the order of Ld.CIT(A) and the relevant para-No.9.8 of the impugned appeal order is extracted as follows: - "9.8 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 und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose of reporting requirement of foreign assets/income in Schedule FA of the Income tax return is for tracking and monitoring the investments held abroad by the residents of India. Preamble to the Act describes its objective to deal with problem of black money, i.e., undisclosed foreign income and assets. The said Act must not be invoked for punishing a technical /venial /bonafide breach of any statutory obligation and therefore bonafide actions of the tax payers must be excluded from the application of provisions of this stringent legislation. In this regard, we draw our force from the decision of Hon'ble Supreme Court in the case of Hindustan Steel Ltd. (supra)." 7. The Ld. AR further contended that the assessee filed the revised return only after the issuance of a notice under Section 131(1A) of the Act by the revenue authorities. Consequently, the burden was on the assessee to establish whether the omission to declare the foreign asset in the original return was inadvertent. However, the revised return was filed within the prescribed time, and the assessee duly declared the foreign asset in the revised ROI. The revenue authorities did not reject the revised return nor express ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T, Mumbai, in the case of Rohit Krishna (supra). It is evident that the assessee disclosed the foreign asset in the revised return, which was filed within the prescribed time limit. Therefore, there is no basis for rejecting the return, nor have the revenue authorities identified any discrepancies in the declaration made by the assessee. The legislative intent behind the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, is to address the issue of undisclosed foreign income and assets. In the present case, the assessee is a British citizen, and the revenue authorities have failed to establish that the assessee was previously an Indian citizen or that the foreign investment was made using undisclosed income (black money) from India. Furthermore, the authorities relied upon by the Ld. DR and the Ld. CIT(A) are factually distinguishable from the present case. Accordingly, the penalty of Rs. 10,00,000/- imposed under Section 43 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, is deleted. The order passed by the Ld. CIT(A) is set aside, and consequently, the assessee's appeal is allowed. 8. In the result, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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