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TMI Blog2025 (3) TMI 829X X X X Extracts X X X X X X X X Extracts X X X X ..... are not attributable to the assessee, we hereby condone the delay of 01 days and proceed to adjudicate the appeal on merits. 3. The grounds raised by the assessee read as under: "1. The order u/s. 17 of the Black Money (UFIA) and imposition of Tax Act dated 26/03/2022 passed by the Ld. CIT(A), Hyderabad confirming the order u/s. 43 is incorrect and wrong both in law and on facts. 2. The Ld. CIT(A) ought to have noted that the appellant has explained the sources for the investment fully and no undisclosed income was determined in the assessment u/s. 10 and hence no penalty u/s. 43 ought to have been levied taking a lenient view. 3. The Ld. CIT(A) ought to have noted that the omissions in the FA schedule are clerical in nature and committed due to inadvertence and were rectified in subsequent years voluntarily by the appellant and hence no penalty u/s. 43 ought to have been levied. 4. The Ld. CIT(A) failed to observe that the appellant is mere subject of insurance and had no legal or beneficial interest therein, and hence no disclosure in FA schedule of the insurance policies was required. 5. The appellant craves to add, amend, modify, rescind, supplement or alter any or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt mistake, the assessee failed to disclose the investments in the AY 2017-18. However, as the assessee continued to show these investments in the prior & subsequent Assessment Years, the impugned order is required to be set-aside. Further, it was submitted that the breach, if any, occurred in the AY 2017-18 and not in the AY 2019-20, therefore, the penalty, if any, u/s. 43 of the BMA Act, 2015 cannot be imposed in the AY under consideration. The Ld. AR further submitted that the Ld. AO, during the course of the assessment held that the assessee was able to furnish the details of the investments made and no assessment was made u/s. 10 of the BMA Act, 2015. The Ld.AR also drawn our attention to the order passed by the Mumbai Bench of the Tribunal in the case of M/s. Ocean Diving Centre Ltd vs. CIT, in BMA No.22/Mum/2023, dated 30/08/2023, wherein under the identical facts, the Tribunal had decided the issue as under: "10. We have heard the parties and perused the material available on record and also given thoughtful consideration to the orders passed by the authorities below and rival submissions of the parties. It is not in controversy that the Assessee has not disclosed the inf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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 considering all the relevant circumstances and in case the Assessee is able to discharge its burden for reasonable cause, then the discretion against the Assessee has to be used cautiously and consciously. The Hon'ble Apex Court in M/s Hindustan Steel Ltd. vs State of Orissa (1972) 83 ITR 26(SC) also reminded that an order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. Per contra, the Ld. DR relied upon the orders passed by the lower Authorities and she had drawn our attention to the various provisions of the BMA Act, 2015 and more particularly, our attention was drawn to section 43 of the BMA Act, 2015 which reads as under: "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. 43. 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 any previous year under sub-section (1) or sub-section (4) or sub-section (5) of section 139 of the said Act, fails to furnish any information or furnishes inaccurate particulars in such return relating to any asset (including financial interest in any entity) located outside India, held by him as a beneficial owner or otherwise, or in respect of which he was a beneficiary, or relating to any income from a source located outside India, at any time during such previous year, the Assessing Officer may direct that such person shall pay, by way of penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return relating to any asset (including financial interest in any entity) located outside India, held by him as a beneficial owner or otherwise, or in respect of which he was a beneficiary, or relating to any income from a source located outside India, at any time during such previous year, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of ten lakh rupees: Provided that this section shall not apply in respect of an asset, being one or more bank accounts having an aggregate balance which does not exceed a value equivalent to five hundred thousand rupees at any time during the previous year. Explanation.-The value equivalent in rupees shall be determined in the manner provided in the Explanation to section 42. 10. From the plain reading of the above it is clear that a person who is resident and ordinarily resident while filing the return of income under section 139(1), or 139(4) or 139(5) fails to furnish or files inaccurate particulars of investment outside India, then the person is liable for penalty under section 43. The disclosure of foreign investments / assets is to be made in return of income-Schedule FA. Thus, it is apparent from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... closure of foreign assets in the return of income filed by the assessee. Accordingly, appeals of the assessee for all assessment years i.e. 2016-17 to 2018-19 are dismissed. 12. In result the appeals of the assessee are dismissed." 11. The Ld. DR had submitted that the decision of the Bombay Tribunal in the case of Ocean Diving Centre (supra) was per incurium as the binding decision of the coordinate bench in the case of M/s. Shobha Harish Thawani had not been referred and distinguished by the Tribunal while granting the relief to the assessee. 12. We have heard the rival contentions and perused the material available on record. It is an undisputed fact that the assessee, in the return of income for the AY 2017-18, had failed to disclose the foreign assets held by him outside India, which were required to be disclosed in the return of income. The Ld. CIT(A), in para 6.8 of his order, have captured various investments which were required to be disclosed by the assessee and yet not disclosed in the return of income for the AY 2017-18 which are as under: "i. Investment in Best Skyline Inc., for AY 2017-18. ii. Insurance policies bearing no. 94428125 and 60158671 for 40 million ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enace of Black Money and the assets possessed outside India with the help of Black Money in foreign countries. But the question arises whether the imposition of penalty is automatic in case there was a venial or technical breach also. In our considered opinion, that cannot be the inference and conclusion. The law has contemplated to issue show cause notice to the assessee as per Section 46 of B.M.A Act and if the penalty is necessarily being required to be imposed then there was no purpose of issuing the show cause notice to the assessee. The Legislature has deliberately provided and mandated for issuance of the show cause notice so that the assessee can explain the reasonable cause for not disclosing the investment in Foreign countries in the return of income. In the present case, the Assessing Officer after examining the case of the assessee had not made any addition under Section 10 of the B.M.A Act as the Assessing Officer was satisfied that the assessee had explained the source of investment which was containing for the earlier years starting from A.Y. 2012-13 onwards. In the present assessment year, no fresh investment was made by the assessee and the previous investments mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and is the subject matter of an appeal can be no ground for not following the appellate order unless its operation has been suspended by a competent court. If this healthy rule is not followed, the result will only be undue harassment to the assessee and chaos in administration of the tax laws. 36. Following the above decision, Supreme Court again in Collector of Customs v. Krishna Sales (P.) Ltd. 1994 Supp. (3) SCC 73, reiterated the proposition that mere filing of an appeal does not operate as a stay or suspension of the order appealed against. It was pointed out that if the authorities were of the opinion that the goods ought not to be released pending the appeal, the straight-forward course for them is to obtain an order of stay or other appropriate direction from the Tribunal or the Supreme Court, as the case may be. Without obtaining such an order they cannot refuse to implement the order under appeal. 37. Following the above decisions of the Supreme Court, a Division Bench of the Bombay High Court in Ganesh Benzoplast Ltd. v. Union of India 2020 (374) ELT 552 held that non-compliance of orders of the appellate authority by the subordinate original authority is disturbing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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