TaxTMI 
TaxTMI 
2026 (10) TMI 59
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....ing proceedings under the Black Money(Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 as highly arbitrary, illegally seriously affecting the right of the petitioner under Article 14 of the Constitution of India. c) Grant such other relief as circumstances and contingencies may permit, in the interest of justice and equity." 2. A perusal of the material on record would indicate that the petitioner is a citizen of Morocco and wife of one Mr. Mehmood Ayaz, who was, at the material time, residing in India. The petitioner acquired two immovable properties/assets situated in Morocco, under registered sale deeds dated 26.08.2015 and 28.02.2016 for valuable consideration. By Act No. 22 of 2015, the Central Government enacted the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (hereinafter referred to as "the said Act of 2015"), which was brought into force with effect from 01.04.2016, it is axiomatic and indeed beyond the pale of controversy that the petitioner acquired the aforesaid two foreign assets well prior to and anterior in point of time to the commencement of the said Act of 2015. 3. On 25.01.2017, the respo....
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....nly in respect of the subsequent AY 2018-19, corresponding to FY/PY 2017-18, were ex-facie illegal, arbitrary and without jurisdiction or authority of law, besides being contrary to the express provisions of the said Act of 2015. Accordingly, the impugned order and the proceedings initiated pursuant thereto are liable to be quashed. 6.1 Learned Senior counsel would further contend that since the respondents issued the first notice under Section 10 of the said Act of 2015 only on 04.12.2018, the appropriate Assessment Year, having regard to the statutory scheme and the applicable provisions would be AY 2019-20, corresponding to FY/PY 2018-19, in view of the mandate embodied in Section 72(c) of the said Act of 2015, especially since the subject assets had admittedly been acquired by the petitioner on 26.08.2015 and 28.02.2016, i.e., prior to the said Act of 2015 coming into force with effect from 01.04.2016. It was further submitted that the petitioner had neither made nor furnished any declaration in respect of the subject assets as contemplated under Section 59 of the said Act of 2015 and in the backdrop of these undisputed facts and the statutory prescription contained therein,....
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....f the aforesaid statutory provisions makes it abundantly clear that sub-section (b) of Section 72 contemplates a situation wherein a declaration has been made under Section 59, but the corresponding tax and penalty have not been discharged within the statutorily prescribed period under Sections 60 and 61. In such circumstances, the value of the asset is rendered chargeable to tax in the previous year, in which such declaration was made. 11. On the other hand, sub-section (c) of Section 72 contemplates a distinct and materially different eventuality, namely, where an asset was acquired or made prior to the commencement of the said Act and no declaration in respect of such asset was made under Chapter VI, i.e., under Section 59. In such a case, the asset is deemed by a statutory fiction, to have been acquired or made in the year in which a notice under Section 10 is issued by the Assessing Officer. 12. The aforesaid provisions, therefore, unequivocally delineate two distinct statutory contingencies; under Section 72(b), where a person has made a declaration in respect of an asset but has failed to discharge the tax and penalty within the stipulated period, the value of such ass....
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....revious year" and "assessment year". The previous year, as defined under Section 2(9) of the said Act of 2015, denotes the period immediately preceding the assessment year, whereas the assessment year, as defined under Section 2(4), signifies the period of twelve months commencing on the first day of April, during which the income pertaining to the previous year is brought to charge. The statutory scheme thus proceeds upon a sequential and chronologically structured framework, whereby income is earned or an asset is acquired during one year and the same is subjected to assessment in the succeeding year. Consequently, the year in which the notice under Section 10 is issued, being the year in which the asset is deemed to have been acquired by virtue of Section 72(c), necessarily assumes the character of the previous year, and the corresponding assessment can only be undertaken in the assessment year immediately succeeding such previous year. 17. The statutory fiction, therefore, necessarily situates the deemed acquisition of the asset in the previous year and relegates its assessment to the ensuing assessment year. By virtue of Section 72(c), the asset is required to be treated fo....
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.... facts are examined, quantified and brought to charge in accordance with law. To permit an assessment of the asset in the very year in which the acquisition takes place would, in substance, amount to subjecting a factual occurrence to assessment before the statutory period contemplated for such assessment has run its course. Such an interpretation would impermissibly collapse the two distinct temporal compartments of the previous year and the assessment year which the Legislature has consciously and meticulously maintained. It would further render the provision and intent nugatory and substantially obliterate the temporal distinction constituting the foundational architecture of the assessment mechanism. It follows, therefore, that the assessment year must necessarily be the year immediately succeeding the previous year or financial year in which the asset is actually acquired or, where the deeming fiction embodied in Section 72(c) is attracted, the year in which such asset is statutorily deemed to have been acquired. 21. In the instant case, the undisputed material available on record unequivocally establishes that no declaration under Section 59 was ever made by the petitioner....