Petitioner challenges Income Tax Settlement Commission order on undisclosed foreign income under Black Money Act

The petitioner challenged the Income Tax Settlement Commission's order under Section 245D(4) of the Income Tax Act regarding undisclosed foreign income and assets under the Black Money Act. The Additional Solicitor General argued that the Settlement Commission lacks jurisdiction over such matters as they do not constitute part of the total income under the Income Tax Act. The Division Bench issued a notice clarifying that the order does not grant jurisdiction to the Settlement Commission under the Black Money Act, allowing direct service to inform parties of the limitations on the Commission's authority in such cases.

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Issues involved:
Challenge to order of Income Tax Settlement Commission under Section 245D(4) of the Income Tax Act regarding undisclosed foreign income and assets under the Black Money Act.

Analysis:

1. The petitioner challenged the order dated 30.1.2019 of the Income Tax Settlement Commission, Additional Bench – II, Mumbai, under Section 245D(4) of the Income Tax Act. The Additional Solicitor General of India highlighted the preamble of the Black Money Act, emphasizing its provisions to address undisclosed foreign income and assets.

2. The Additional Solicitor General argued that the Settlement Commission should have distinguished between income earned and assets acquired outside India. Referring to sub-section (3) of Section 4 of the Black Money Act, it was contended that income included in undisclosed foreign income and assets does not constitute part of the total income under the Income Tax Act, thus the Settlement Commission lacks jurisdiction over such matters.

3. The petitioner's counsel requested that until the matter is heard by the Division Bench, it should be acknowledged that the order dated 30.1.2019 does not grant jurisdiction to the Settlement Commission to address undisclosed foreign income and assets under the Black Money Act. Consequently, notice was issued returnable on 17.6.2019, and it was clarified that the order should not be interpreted as conferring jurisdiction under the Black Money Act.

4. Direct service was permitted in the case, ensuring that the concerned parties are informed of the proceedings and the limitations on the Settlement Commission's authority regarding undisclosed foreign income and assets.

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