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2021 (10) TMI 158 - AT - Income TaxBlack money - Liability of the appellant to be assessed under the provisions of BMIT Act 2015 - denial of liability in the jurisdiction of the Assessing Officer to issue notice under black money - scope of Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (in short ‘BMIT Act’) - HELD THAT:- As in light of the limited scope of an appeal under section 15(l)(b), the Grounds no. 1, 2 and 3 of assessee's appeal which are connected with disposal of objections by the AO in conformity with the rules of natural justice are found to be beyond the scope of an appeal filed under section 15(l)(b) of the BMIT Act and hence, cannot be adjudicated. Consequently, ground no. 1, 2, and 3 of the appeal raised by the assessee are found to be unconnected with determination of assessee's liability, beyond the scope of section 15(l)(b) of the Act and are dismissed. Liability of the assessee to be assessed under the BMIT Act, 2015 - HELD THAT:- The ownership of these assets cannot be thrust upon the assessee. Hence, the denial of liability by the assessee at the jurisdictional stage also succeeds on this count too. BM Act provides u/s. 4(2) an exclusion for the assets which have been created out of the income assessed in India - As the settlement commission had rejected the assessee’s plea and these matters & proceedings are already separately going on.Hence by no stretch of imagination can lead to a conclusion that incomes are not been assessed as the Revenue has not dropped its plea/withdrawn its plea, that these incomes are not exigible to income tax. Once it is so held, these assets cannot again be the subject matter of black money proceedings at this stage, as it will amount to double prejudice to the assessee which is not sustainable in law. Various materials which have been referred by learned CIT(A) in his order rejecting the jurisdictional challenge have not been confronted to the assessee at the time of learned CIT(A)’s order dismissing the jurisdictional challenge. We note that this is a very germane point as the principle of natural justice in this regard have been ignored by learned CIT(A). It is evident that the catena of documents which learned CIT(A) has referred are in fact lifted by him from the final order of the Assessing Officer to support his order. These were never confronted to the assessee. In this view of the matter order of CIT(A) suffers from jurisdictional infirmity in as much as it is contrary to the rules of natural justice. Moreover we note that assessee has duly raised a ground before ld CIT-A that there is violation of natural justice inasmuch as assessee’s request for a personal hearing in this regard has been rejected by the AO. CIT(A) rejected this by holding that there is no such scope in section 15(1)b.We do not see the basis of such reasoning by Ld CIT(A),when assessee has duly submitted that the documents relied upon have not been confronted to the assessee.Ld CIT(A) in this regard has noted that these documents were not in appeal folder before him and he has simply accepted the AOs report that these documents are referred in AOs final order and the documents have been confronted to the assessee.This is palpable violation of natural justice and ld CIT(A) has fatally erred in rejecting the claim without himself examining the records.This proposition is duly supoerted by Honbe Supreme court decision in the case of Andaman Timber Industries [2015 (10) TMI 442 - SUPREME COURT] Assessing Officer has referred to the names of certain bank accounts and Form-A obtained from banks for establishment of beneficial owners identity - As already been noted that in the aid of Swiss AML Act, the Swiss bankers Association has issued a Code of Conduct for Swiss Banks with regard to the exercise of due diligence (CDB Guidelines), wherein model Form A is prescribed for the declaration of identity of the beneficial owners. However, as clarified by the Swiss Federal Tax Administration, vide its letter dated 30.6.2015 it does not have application for matters of taxation. Hence, mention of assessee’s name in this Form-A cannot be taken as any proof of assessee’s ownership of this asset for tax purpose. These assets were already part of income tax proceedings up to preceding assessment year and that for present Assessment Year the assessee has still time to file income tax return. Hence, it is the claim of the assessee issue of notice is premature. This plea of the assessee has been rejected by the authorities below by holding that there is no such bar in the black money act. Definition of undisclosed asset in the back money act clearly provides that assets created out of income assessed in income tax already shall be excluded. Hence, when the revenue has already assessed these assets under income tax proceedings upto previous Assessment Year and for current assessment year time for filing the return has not expired, assessee’s plea that the issue of notice is premature is tenable and accordingly we accept the same. The bar in the ACT is inbuilt inasmuch as it has been provided that assets out of income assessed to income tax shall be excluded from the purview of undisclosed asset in Black Money Act. Hence, it is abundantly clear that as per the scheme of the act, there cannot be a simultaneously proceedings on the same asset/income under Income Tax Act, 1961 as well as Black Money Act. The doctorine of double prejudice does come into play here. Above discussion amply prove that the assessee’s challenge before the ld CITA to denial of liability in the jurisdiction of the Assessing Officer to issue notice under black money act deserves to succeed.
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