TaxTMI 
TaxTMI 
2025 (9) TMI 1807
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....assessee received shares of M/s. Vedanta Resources PLC, UK under the Employee Stock Ownership Plan (ESOPs) from the financial years 2011-12 to 2015-16. The said shares which were received from the employer under ESOPs scheme were treated as perquisites u/s.17 of the Income Tax Act for the assessment year 2012-13 to 2016-17, as part of taxable salary and tax was duly deducted at source by the employer, which is duly reflected in Form 16. The shares obtained under ESOPs were subsequently sold in the assessment year 2019-20 and sale proceeds of Rs. 79,53,312/- and Rs. 31,61,444/- received on 03.10.2018 and 19.10.2018 respectively were credited in the savings bank account of the assessee with ICICI Bank. The assessee for the assessment year 2019-20 had filed his return of income on 10.08.2019 by paying the capital gains tax thereon. 4. The proceedings under the BMA were initiated based on the information received on 03.04.2019 and notice u/s. 10(1) of BMA was issued on 11.11.2019. Thereafter the said proceedings were completed on 28.03.2022 u/s. 10(3) of the said Act for assessment year 2016-17 after considering the response's filed by the assessee. In the said order, the AO brought....
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....d hence not acceptable." 8. The CIT(A) while sustaining the penalty u/s. 43 of the BMA, held at para 5.9.2 as follows:- 5.9.2 The provisions of Section 43 of the BMA mandates penalties for the failure to furnish accurate particulars about assets, including financial interests in entities, located outside India. The section specifically targets residents who do not disclose foreign investments or assets in the ITR's Schedule FA. It is clarified that Section 43 applies not only to undisclosed assets but to any asset held by the assessee as a beneficial owner or otherwise. The section does not provide any leeway to waive penalties, even if the foreign asset is disclosed in the books. The penalties are specifically linked to the nondisclosure of foreign assets in Schedule FA in the return of income 5.9.3 The issue of consequence of assets not declared in returns of income has been explained in Circular No. 12 of 2015 dated 2nd of July, 2015. The circular at Q. 18 clearly states that the appellant is liable for penalty if foreign assets are not declared in the return of income even though their acquisition is fully explained by proper sources. Question No. ....
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....n was on account of the bona fide belief that such income was not taxable in India, as the said dividend had already suffered withholding tax in the United Kingdom (refer Page 82 of the Paperbook). It was stated that the assessee bonafide understanding of the complex provisions governing cross-border taxation led to this inadvertent error, which should not attract penal consequences. 12. It was further contended that penalty under Section 41 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 ("BMA") is not automatic or mandatory. It was stated that the use of the expression "may" under the provision and the statutory right of appeal underscore the discretionary nature of the penalty and the bonafide omission, coupled with the fact that BMA was introduced only with effect from Assessment Year 2016-17, establishes sufficient cause for deletion of the penalty. Further, it was contented that the assessee has subsequently paid tax on the dividend income and sought permission to file a revised return, thereby evidencing good faith. 13. It was submitted that the penalty levied under Section 43 of the BMA for non-reporting of the foreign asset ....
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....o recapitulate the factual matrix of the present case. The assessee, an Electrical Engineer employed with Hindustan Zinc Ltd., was allotted shares under the Employee Stock Ownership Plan (ESOP) by his employer during the financial years 2011-12 to 2015-16. The details of the perquisite value, as reflected in Form No. 16, are set out hereinbelow: S. No. Financial year Perquise amount as per Form No.16 Rs. 1 2011-12 9,07,157 2 2012-13 7,76,302 3 2014-15 32,86,815 4 2015-16 2,59,104 19. The said ESOP shares were treated as taxable perquisites under Section 17 of the Income-tax Act, 1961, in the assessment years (2012-13 to 2016-17). Tax was duly deducted at source by the employer and the same is evidenced by Form No. 16, copies of which are available at pages 67 to 81 of the paper book filed by the assessee. Subsequently, the shares were sold during the assessment year 2019-20, and the sale consideration was credited to the assessee's ICICI Bank account. The sale proceeds were duly disclosed in the return of income for A.Y. 2019-20 and capital gains tax was paid thereon. 20. The relevant sections under which penalties has been imposed....