TMI Blog2022 (4) TMI 1199X X X X Extracts X X X X X X X X Extracts X X X X ..... it has also been contended that petitioner was not benefitted by any benefit and has not received even a single penny. Reference was also made to the provisos to Section 139 along with explanation 4 and 5 of the Income Tax Act. It is contended that the petitioner, on being nominated as beneficiary, an expectancy or anticipation of hope of distribution in his favor, existed and nothing more and Revenue authorities are yet to quantify the assets and/or income received from such assets under assessment proceedings Under Section 10 of BMI Act. The contentions raised by counsel for petitioner appear to be forceful and carry merit subject to the reply to be filed on behalf of respondent. Considering the aforesaid aspects and in the totality of the facts and circumstances, it is directed that the proceedings before the learned trial court shall be subject to the final orders passed in the present petition. However we not inclined to stay the proceedings before the learned ACMM, at this stage and an opportunity is granted to the respondent to file a reply on merits as well as on the point of grant of sanction under Section 55 of BMI Act. Reply be filed on behalf of the respondent within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ridge, Massachusetts, United States of America (USA). It is also prayed by the counsel that in case this Court is not inclined to stay the proceedings, petitioner may be granted exemption from appearance since he is continuing his studies in USA. 3. The application for stay of proceedings pending before the learned ACMM has been vehemently opposed on behalf of respondent and time has been sought to file reply. 4. In brief, a complaint under Section 50 of the BMI Act was filed for assessment year 2016-17 against the petitioner/accused, alleging that he has not disclosed about his financial interest in the bank accounts held by him with the Investec Bank (Channel Island) Limited in its Jersey Branch for the ITR filed by him for the assessment year 2016-17. 5. Learned ACMM observed that a prima facie case is made out for the offence under Section 50 of the BMI Act and accordingly, after taking the cognizance, issued summons to the petitioner vide order dated 05.08.2021. 6. The case of the petitioner is that a search and seizure operation was conducted by the Income Tax Department at the residential premises of the petitioner and his family members and at the time of sea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from such assets as the petitioner has not received any income or any benefit therefrom. 12. The proceedings before the learned ACMM is stated to be premature and an abuse of process of law. It is further contended that even the assessment proceedings completed by respondent under the Income Tax Act, 1961 did not find any adverse findings against the petitioner. Further, it is the requirement that before initiating any prosecution proceedings, one needs to satisfy that there are undisclosed assets located outside India as per the definition of Section 2(11) of the Income Tax Act. It is further pointed out that the mandate granted under Section 2 (11) was substituted by Act 13 of 2018 w.e.f. 01.04.2018 and as per sub-clause (2) of the Section, sanction can be passed only to the authorities mentioned in the sub-clause (1) and not to any other authority, while sanction in the present case was passed to respondent herein, which is not the authority mentioned in sub-clause (1) of the Act. 13. It is further submitted that respondent-authorities, in sanction order relied upon a notification 39 of 2017 while passing sanction under Section 55 of the BMI Act which is fundamentally inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but vests in the trustees a discretionary power to pay him, or apply for his benefit, such part of the income as they think fit. The trustees must exercise their discretion as and when the income becomes available, but if they fail to distribute in due time, the power is not extinguished so that they can distribute later. They have no power to bind themselves for the future. The beneficiary thus has no more than a hope that the discretion will be exercised in his favour. 16. It is also contended that the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 has introduced a tax compliance provision under Chapter VI of the Act and the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Rules, 2015 have been notified. Further, in regard to the scheme, queries have been received from the public about the scope of the scheme and the procedure to be followed and the Board has considered the same and decided to clarify the points raised by issue of a circular in the form of questions and answers, in which question No. 31 regarding the eligibility of a beneficiary for declaration under Section 59 of the Act, reads as follows : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will be allowed a time upto 31st December, 2015 for payment of tax and penalty in respect of the declared asset. There may be a case where person makes declaration in respect of 5 assets whereas the Government has information about only 1 asset. In such situation the person will be eligible to declare the balance 4 assets under Chapter VI of the Act. In such case the declarant, on receipt of intimation by the Principal Commissioner/Commissioner, shall revise the declaration made within 15 days of such receipt of intimation to exclude the asset which is not eligible for declaration. Tax and penalty on the eligible assets under the Act shall be payable in respect of the revised declaration by 31st of December, 2015. In respect of the ineligible assets provisions of the Income-tax Act shall apply. 18. On the other hand, contentions raised by learned counsel for the petitioner have been vehemently opposed by learned counsel on behalf of the Income Tax Department, who appears on advance notice. Learned counsel, apart from seeking time to file reply, has drawn attention of this court to the returns filed for the relevant year and vehemently contended that the proceedings have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during such previous year. 21. The contention of learned counsel for the petitioner is that the petitioner was a minor at the time of investment i.e. only about two-three years and the petitioner s grandfather made investment in the said company/trust. Further even assuming the allegations of the complainant to be true, the petitioner was required to disclose the said details in the ITR, as the account was opened in the year 2015 on 25.05.2015 (Financial Year 2014-15) i.e. assessment year 2015-16. Further as per definition of Previous Year under Section 2 (9) of the BMI Act, there was no requirement, at that stage to disclose the same. Further, it has also been contended that petitioner was not benefitted by any benefit and has not received even a single penny. Reference was also made to the provisos to Section 139 along with explanation 4 and 5 of the Income Tax Act. It is contended that the petitioner, on being nominated as beneficiary, an expectancy or anticipation of hope of distribution in his favor, existed and nothing more and Revenue authorities are yet to quantify the assets and/or income received from such assets under assessment proceedings Under Section 10 of BMI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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