TaxTMI 
TaxTMI 
2026 (6) TMI 198
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....fter called the 'BMA'). The relevant Assessment Years are 2016-17 to 2018-19. 2. Common issues are raised in these appeals. Hence, they were heard together and are being disposed of by this consolidated order. Identical grounds are raised except for variation in figures. The grounds raised for assessment year 2016-17 read as follows:- That Honourable Commissioner (Appeals) erred on facts and circumstances of the case and in law so far as the impugned Order passed by him under section 15 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (the Act) is prejudicial to the interest of the Appellant. 2. The Honourable Commissioner (Appeals) erred on facts and circumstances of the case i....
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....tion dated 10.01.2016. The additional ground No.7 reads as follows:- "The Honourable Commissioner (Appeals) erred on facts and circumstances of the case and in law in upholding the penalty levied by the learned AO who did not have the jurisdiction to levy the impugned penalty." 4. We shall first adjudicate BMA No.16/CHNY/2025 and our findings/conclusions in BMA No.16/CHNY/2025 will apply mutatis mutandis to BMA Nos.17 & 18/CHNY/2025. 5. The solitary issue for our adjudication is whether the penalty levied under Section 43 of the BMA for non-disclosure of foreign assets in Schedule FA of the return of income is sustainable in the facts and circumstances of the case. 6. Brief facts of the case are as follows: The assessee is....
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.... 'may' used in section 43 of BMA connotes a discretionary power and it is not mandatory for AO to impose penalty. 8. The Ld. DR, on the other hand, supported the orders of the Income-tax authorities and submitted that non-disclosure of foreign assets attracts penalty under Section 43 irrespective of taxability. 9. We have heard the rival submissions and perused the material available on record. It is an undisputed fact that the ESOPs were allotted to the assessee as part of employment compensation and the perquisite value thereof was subjected to TDS. It is also not in dispute that the capital gains arising on sale of such shares were duly offered to tax by the assessee in AY 2019-20. Thus, the entire transaction relating to the said ....
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....ther, the Hon'ble Supreme Court in the case of CIT v. Reliance Petroproducts Pvt. Ltd. reported in 322 ITR 158 has held that mere failure to substantiate a claim or an inadvertent/clerical error does not amount to furnishing inaccurate particulars so as to attract penalty. Accordingly, the impugned penalty is unsustainable. 13. We further find that under identical facts, the coordinate bench of the Tribunal in the case of Shri Vasanthan Jayaraman in BMA Nos.4 & 5/CHNY/2025 (order dated 08.09.2025) has deleted the penalty holding that such omission is a technical and venial breach, especially when the sale from such asset has already been subjected to tax. The relevant finding of the Tribunal reads as follows:- 18. We have duly c....
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.... 41. The Assessing Officer may direct that in a case where tax has been computed under section 10 in respect of undisclosed foreign income and asset, the assessee shall pay by way of penalty, in addition to tax, if any, payable by him, a sum equal to three times the tax computed under that section. 21. Section 43 of the BMA reads as follows: 43. Penalty for failure to furnish in return of income, an information or furnish inaccurate particulars about an asset (including financial interest in any entity) located outside India.- If any person, being a resident other than not ordinarily resident in India within the meaning of clause (6) of section 6 of the Income-tax Act, who has furnished the return of income for a....
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....he latter, the principle of reasonable cause would justify deletion of the penalty. 23. In the present case, the foreign asset, being ESOP shares, was already subject to the Indian tax net as perquisite income. The dividend income therefrom was received in the assessee's Indian bank account and subjected to withholding tax in the source country. Upon subsequent sale of the shares in A.Y. 2019-20, the capital gains were duly reported and taxed in the assessee's return of income dated 10.08.2019. During the proceedings under Section 10 of the BMA, the assessee voluntarily admitted the dividend income and sought permission to file a revised return. It is further relevant that for the year under consideration, the assessee filed return....