TaxTMI 
TaxTMI 
2025 (7) TMI 123
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....e assessee filed the return in individual capacity by declaring as 'resident individual'. The Ld.AO had received information that the assessee was maintaining foreign assets in the form of investments in the financial entities registered in, Barclays Bank PLC, Branch Isle of Man. On verification of the returns filed by the assesse under section 139 of the Act it was found that from A.Ys 2009-10 to 2022-23, the assessee had not declared the foreign assets in the column provided in the return of income. The Ld.AO observed that in the Foreign Assets Schedule (FA Schedule) was introduced in the return of income since A.Y. 2012-13, in Finance Bill, 2012, in order to keep a track of foreign assets and income generated shown in foreign jurisdictions of Indian Residents. A new provision for penalty under section 43 of the Act was introduced for non-disclosure of such foreign assets. So considering this, on verification of ITR for A.Y. 2018-19, it was found that the assessee had not declared the foreign assets in FA Schedule an as a result, the assesse violated the provisions of section 43 of Act in respect of the investment in Barclays Bank PLC, Branch Isle of Man. The assesse during penal....
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....e of opening Barclays wealth Reserve GBP 50534773 GBP Closed 02/08/2012 Barclays wealth Reserve GBP 85990533 USD Closed 02/08/2012 Barclays Saving GBP 6312269 GBP Active 04/06/2019 Barclays Saving USD 47305600 USD Active 04/06/2019 3. As I am not the first holder of the above Accounts, the first holder i.e. my husband Ajay Shankarlal Mittal has duly reported the Foreign Bank Account(s) in his Income Return ITR (ITR). (copy of ITR of Shri Ajay Shankartal for A.Y. 2015-2016 2021-2022 is attached herewith Annexure B). Also there is very less interest income from the above account which are duly considered for taxation in the hands of Ajay Mittal. 4. Further the assessee has filed the Updated Income Tax Ret for FY 2021-2022 and duly disclosed the both the account in Schedule FA of ITR form. (Copy of the vide Annexure C). 5. I made certain transfer of funds outside India under Liberalised Remittance Scheme (LRS) to Ajay Mittal Details of which are as follows: Date Bank from Bank to GBP INR Beneficiary Source of Funds 04.08.2017 Axis Bank Barclays GBP A/c 50534773 1,00,....
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.... 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 under section 139(1) and second being furnishing of inaccurate particulars in such return relating to any asset located outside India, held by her as a beneficial owner or otherwise or in respect of which she was a beneficiary, or in relation to any income from a source located outside India. The term "fails to furnish any information" is sufficient to include in its ambit non-disclosure of a foreign asset. Also, even if the disclosure is made, furnishing of inaccurate particulars about a foreign asset also would make the assessee liable for penalty u/s 43 of BMA. In the present case, it was mandatory for the assessee to disclose the foreign assets accurately 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 particulars of the foreign asset in the return filed by her f....
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....o play only when the aggregate value of these assets exceeds Rs. 5 Lacs. Therefore, even statutorily, it is not a simple cause and effect relationship between non-disclosure of an undisclosed foreign asset in the income tax return and penalty under BMA. The unambiguous intent of the legislature thus was to exclude trivial cases of lapses which could be attributed to a reasonable cause. It could also be noted that Sec.43 provide that the Assessing Officer "may" impose the penalty, and the use of the expression "may" signifies penalty is not to be imposed in all cases of lapses and that there is no cause and relationship simplicitor between the lapse and the penalty. As to what should be the considerations for the exercise of this inherent discretion by the Assessing Officer, some guidance could be taken from Hon'ble Supreme Court's judgment in the case of Hindustan 1. v. State of Orissa [1972] 83 ITR 26 (SC), which, inter alia, observes that "..............penalty will not ordinarily be imposed unless the party obliged, either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or conscious disregard of its obligation. The penal....
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.... the lender would not automatically become owner of those assets. The buyer would continue to remain owner of those assets, until it is recovered from him by the lender in accordance with law, in the event of failure of the borrower to adhere to the terms and conditions of loan. Further, the said loan transactions taken place in India and it has been duly recorded in the books of both the lender and borrower. Hence the visions of BMA will not extend to the loan transaction entered between the parties in India." 8. The Ld. DR vehemently argued the case and placed complete reliance on the orders passed by the revenue authorities. However, the Ld. DR was unable to rebut the contentions advanced by the Ld. AR by citing any contrary judicial precedents. 9. We have heard the rival submissions, perused the material available on record, and carefully considered the decisions relied upon by the Ld. AR. The brief facts of the case, as discussed, revolve around the imposition of penalty under section 43 of the Act for alleged non-disclosure of foreign bank accounts maintained with Barclays Bank PLC, Isle of Man Branch. It is noted from the record that the assessee has consistently maint....