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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether penalty under section 43 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 was leviable where the foreign investment was disclosed in the audited balance sheet and in Part A-BS of the return but not in Schedule FA.
Analysis: Section 43 is attracted when a resident fails to furnish in the return of income information relating to a foreign asset. The undisputed position was that the investment in the foreign entity stood recorded in the books, reflected in the audited financial statements, and disclosed in the return in Part A-BS. The controversy was confined to non-furnishing of the same particulars in Schedule FA. On the statutory language, the relevant inquiry is whether information relating to the asset was furnished in the return as a whole, not whether it appeared in a particular schedule. The omission to populate Schedule FA, in the presence of disclosure elsewhere in the return architecture, was therefore treated as a reporting lapse and not as complete non-disclosure in the return. The reasoning also rejected a mechanical application of the administrative circular where the statute itself did not support treating such a format error as the jurisdictional trigger for penalty.
Conclusion: Penalty under section 43 was not sustainable on these facts, and the deletion of the penalty was upheld in favour of the assessee.
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