TMI Blog2023 (12) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... hedule para-A-BS in its return of income, hence we are in concurrence with the claim of the Assessee that the Assessee has directly or indirectly complied with the statutory provisions and therefore, the case of the Assessee does not fall under the rigorous provisions of section 43 of the B.M. Act. No doubt the Schedule FA and BMI Act, have been introduced and enacted for checking the economic offenders, tax evaders and for analyses of information qua foreign investment/income by using artificial intelligence and Schedule FA applicable specifically to the Assessee(s) whose accounts are not required to be audited or if audited but books of account not filed along with the return of income. However, in each and every case, the penalty as prescribed in section 43 of the Act, cannot be imposed. With regard to the contention raised by Ld. DR to the effect that the Assessee is a habitual defaulter. In our view as the Black Money Act was introduced and enacted in 2015 and therefore, that could be a reason for technical / venial breach starting from AY 2016-17 onwards which is under consideration before us, however, in the instant case, it is not the case of total defiance or malafi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the balance sheet, the company had accurately disclosed the name of the company in which it has invested, i.e. Halen Incorporated SA....The said details were appropriately reported under 'Non-current Investments' in schedule Part A-BS in the return of income for AY 2016-17 on page 5 of the ITR Form.. Along with the tax audit report, the company has also uploaded the balance sheet and profit and loss of the company on the portal... We would like to submit that the financial interest held by the company by way of investment in overseas entity has been duly disclosed and reported with RBI through authorized dealer bank. However, inadvertently missed reporting the same under the Schedule FA in the Income-tax Returns of the relevant assessment years. It becomes the case of partial disclosure made by the company, it will not come under purview of fully undisclosed. Thus we submit that we have been disclosing the said investment with various authorities complying with various statutory requirements. However, we erroneously have missed reporting the said investment in the Schedule FA of ITR but please note that the same was missed on account of typographical error/ bona-fide omi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r subsequent Assessment Years i.e. From AY 2016-17 to AY 2019-20. Further, as evident from the Income-tax Return, the assessee is a company having revenue receipts of more than Rs. 20 Cr and also tax audit u/s 44AB was carried out. Hence the assessee s argument of inadvertent/typographical mistake is not acceptable. In view of the above facts and circumstances of the case, I levy a sum of Rs.10,00,000/- (Rupees Ten lakhs Only) as penalty payable by the assessee under section 43 of the Black Money (Undisclosed Foreign Income and Asset) Imposition of Tax Act, 2015, Notice of demand is issued accordingly. 7. The Assessee being aggrieved challenged the levy of penalty before the Ld. Commissioner and reiterated its claim as raised before the AO. The Ld. Commissioner vide impugned order affirmed the imposition of penalty by concluding as under: 7.9 The penalty under section 43 of the Act is not with respect to ownership of such assets but with respect to non-disclosure of the account in which the assets were held. While the assessee has claimed that the investment in the foreign asset had been disclosed in the ITR in Schedule 'Part A - BS under 'Non-current Inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch person can be held liable to pay a sum of Rs. 10,00,000/- by way of penalty, but not otherwise. The Assessee also claimed that as per question and answer No.17 in Circular No. 13 of 2015 dated 06.07.2015 issued by CBDT, qua clarifications on tax compliance for undisclosed foreign income and assets, it is answered by the CBDT that mere reporting of a foreign asset in Schedule FA of the return, does not mean that the source of investment in the asset has been explained. Further, declaration should be made under Chapter-VI of the Act in respect to all those foreign assets which are unaccounted to/source of investment in such asset is not fully explainable, which is not the case here. From the answer to question No. 17, it clear that mere reporting of foreign asset in the Schedule FA of the return does not absolve the Assessee from explaining the source of investment in the asset, which goes to show that disclosing of foreign asset in Schedule FA of the return itself is not paramount until and unless the same is explained, therefore, inference can be drawn that disclosing or non-disclosing in Schedule FA do not have much impact. 9. On the contrary, the Ld. Departmental Represent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and cannot be so interpreted as to cause undue hardship to bonafide/ innocent breachers and therefore the said law must not be invoked for punishing a technical/venial/bonafide breach by a bonafide breacher of any statutory obligation and therefore, the bonafide actions of the taxpayers must be excluded from the application of provisions of stringent legislations like, BMA, 2015. 10.1 By reading bare provisions of section 43 of the Act, it clearly reflects that a person shall pay by way of penalty of sum of Rs. 10,00,000/- who fails to furnish any such information or furnishes inaccurate particulars qua any asset/located outside India / sourced from outside India in the return of income filed under sub-section (1) or (5) of section 139 of the Act. Further, the AO may direct that such person shall pay by way of penalty of Rs. 10,00,000/-. No doubt the AO is empowered to impose the penalty as discretion is vested with him by using word May in the provisions. The discretion is always at wisdom of an authority, however, discretion is required to be exercised judicially and under the Judicial canons of law and in reasonable and justified manner to impart the Justice, by conside ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
