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ITAT quashes black money tax demand over Singapore fund
A Gurgaon resident, Mr Bhowmick, has won relief from the Income Tax Appellate Tribunal (ITAT) Delhi in a black money case. The tribunal quashed a tax demand of Rs 2.04 crore and…
A Gurgaon resident, Mr Bhowmick, has won relief from the Income Tax Appellate Tribunal (ITAT) Delhi in a black money case. The tribunal quashed a tax demand of Rs 2.04 crore and a penalty of Rs 1.84 crore imposed under the Black Money Act for assessment year (AY) 2019-20.
The dispute arose from Mr Bhowmick's investment of about USD 3 lakh in a Bermuda-focused global fund while he was employed in Singapore. He argued that the funds came entirely from his Singapore salary and were not Indian money, and relied on the India-Singapore Double Tax Avoidance Agreement. The tax officer, however, treated the investment as unexplained and levied tax and penalty.
The ITAT Delhi accepted Mr Bhowmick's argument that the notice under Section 10(1) of the Black Money Act, issued on November 1, 2018, mentioned only AY 2016-17 and AY 2017-18, not AY 2019-20. The tribunal held that without a valid notice for that year, the tax officer lacked jurisdiction to make the assessment.
Indian Opinion Analysis
The ruling turns on a procedural point: a notice under Section 10(1) of the Black Money Act is the mandatory starting point for any assessment. Without it, the assessing officer has no jurisdiction, regardless of the merits of the case. The ITAT has previously held in cases like ITO vs. Shailesh J. Mehta that jurisdictional defects cannot be cured by a taxpayer's participation in proceedings. This decision reinforces that strict compliance with notice requirements is non-negotiable, even when undisclosed foreign assets are involved. The next step for the income tax department is to decide whether to appeal to the High Court, which would test whether the omission was indeed a jurisdictional failure or a curable procedural error.
Source: economictimes.indiatimes.com
This brief was synthesised by AI from the source linked above.
