TaxTMI 
TaxTMI 
TaxTMI 
2023 (8) TMI 1512
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....nancial year 2014-15 through liberalized remittance scheme under the Foreign Exchange Management Act (FEMA). The said foreign asset is a general investment along with her husband in "Global Dynamic Opportunity Fund Ltd" where the assessee holds 40% of the share. 3. The Assessing Officer issued a show cause notice to the assessee requiring to show cause why penalty under section 43 of BMA Act should not be levied. The assessee, in the reply stated that it is an inadvertent error on the part of the assessee not to have disclosed the foreign asset in Schedule FA of the Income-tax return. The assessee further submitted that the amount invested in the fund was sourced out of assessee's account i.e. HSBC Bank at Jersey to which funds were transferred from her Indian account under the liberalized scheme permitted by Reserve Bank of India. The assessee also submitted that in the return filed for A.Y. 2019-20, the foreign assets have been duly disclosed. The assessee accordingly, prayed that the penalty proceedings may be dropped as the error committed by the assessee is not intentional. The Assessing Officer did not accept the submissions of the assessee and proceeded to levy penalty of R....
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....ation" is sufficient to include in its ambit non-disclosure of a foreign asset. In the present case, it was mandatory for the assessee to disclose the foreign assets in the return. The mandate to file such information was introduced in the Income Tax Act from AY 2012-13 onwards and it is noted that the appellant has failed to file the information in the return filed by her for the relevant assessment year. 6.9 The assessee has contended that once the foreign assets are already assessed under the provisions of the Income Tax Act, such assets shall be excluded from the purview of undisclosed foreign assets under BMA. It has already been clarified earlier that the penalty u/s 43 of the Act is not related to the quantum of assets determined as undisclosed under BMA. The default has to be determined with respect to the assessee's failure to disclose the assets / bank accounts outside India in the return filed under section 139(1) of the Income Tax Act 1961. 6.10 The penalty under section 43 of the Act is not with respect to ownership of such assets but with respect to non-disclosure of the account in which the assets were held. The lapse could have been treated as technical la....
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....that no penalty was levied in his case after examining the evidences submitted. Therefore the Ld.AR argued that for the assessee in the given case has filed the same set of evidences before the Assessing Officer and the Assessing Officer is not correct in taking a different stand in assessee's case with regard to the same foreign assets. The Ld.AR further placed reliance on the decision of the co-ordinate bench in the case of Leena Gandhi Tiwari vs ACIT (BMA 01/Mum/2022 dated 29/03/2022) where the Tribunal has deleted the penalty levied by the Assessing Officer. 7. The Ld.DR, on the other hand, submitted that the levy of penalty under section 43 of BMA is with respect to non disclosure of foreign assets held by the residents. The Ld.DR further submitted that the source being explained and the income arising out of the foreign asset being offered to tax does not discharge the onus of the assessee to disclose the asset in Schedule FA as per the provisions of section 43 of the BMA. Accordingly, the ld.DR submitted that the penalty has been rightly levied. 8. We heard the parties and perused the material on record. The assessee along with her husband has made a joint investment i....
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....tion.-The value equivalent in rupees shall be determined in the manner provided in the Explanation to section 42. 10. From the plain reading of the above it is clear that a person who is resident and ordinarily resident while filing the return of income under section 139(1), or 139(4) or 139(5) fails to furnish or files inaccurate particulars of investment outside India, then the person is liable for penalty under section 43. The disclosure of foreign investments / assets is to be made in return of income-Schedule FA. Thus, it is apparent from the language of section 43 that the disclosure requirement is not only for the undisclosed asset but any asset held by the assessee as a beneficial owner or otherwise. Given this the argument that the penalty under section can be levied only with respect to undisclosed asset is not tenable. Undisputedly, the assessee in the instant case has not disclosed the foreign asset in the return of income - Schedule FA, therefore, we are inclined to agree with the findings of the CIT(A) in this regard. 11. The alternate plea of the assessee is that the non-disclosure of the foreign asset in schedule FA of the return is an inadvertent bonafide error ....