Section 153A disclosure of foreign assets defeats Black Money penalty where omission from the original return was bona fide.

Penalty under section 43 of the Black Money Act was found unsustainable where foreign assets, though omitted from the original return under section 139(1), were disclosed in the return filed under section 153A after search and accepted in the assessment. The Tribunal applied the principle that a section 153A return substitutes the original return and that disclosure in that return cannot be ignored for penalty purposes. As no addition was made in the section 153A assessment and the record did not show deliberate tax evasion, the omission was treated as a bona fide technical lapse. Penalty was therefore not leviable on the facts.

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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 could be sustained where the assessee did not disclose foreign assets in the original return under section 139(1) of the Income-tax Act, 1961 but disclosed them in the return filed under section 153A after search.

Analysis: The assessee had omitted the foreign assets in the original return, but the assets were disclosed in the return filed under section 153A pursuant to search under section 132 and the disclosure was accepted by the Revenue. No addition was made in the assessment framed under section 153A read with section 143(3). Relying on the principle that a return filed under section 153A substitutes the original return under section 139 and on the view that disclosure in the section 153A return cannot be ignored for penalty purposes, the Tribunal held that the absence of disclosure in the original return, by itself, did not justify penalty. The record also did not show any deliberate attempt to evade tax, and the omission was treated as a bona fide technical lapse.

Conclusion: Penalty under section 43 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 was not leviable on the facts of the case.

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