SC: No tax assessment under Black Money Act for an AY prior to AY16-17

The Hon’ble Supreme Court, on 15th October 2019, in the matter of Union Of India and Ors. v. Gautam Khaitan pronounced that under Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, the Assessing Officer can charge taxes only from the assessment year commencing on or after 01.04.2016. However, the value of the said asset has to be as per its valuation in the previous year.

The Hon’ble Supreme Court observed that:

A bare reading of the provisions of Section 3 read with Section 2(9)(d) of the Black Money Act would unambiguously show, that the legislative intent insofar as the charging tax on undisclosed asset located outside India is concerned, is to charge the tax on its value in the previous year in which such asset comes to the notice of the Assessing Officer. The previous year in the present case would be a period of twelve months commencing on the 1st day of April of the relevant year and which immediately precedes the assessment year. (Para 11)

Where no declaration in respect of the asset covered under the Black Money Act is made, such asset would be deemed to have been acquired or made in the year in which a notice under Section 10 is issued by the Assessing Officer and the provisions of the Act shall apply accordingly. (Para 15)

A conjoint reading of the various provisions would reveal, that the Assessing Officer can charge the taxes only from the assessment year commencing on or after 01.04.2016. However, the value of the said asset has to be as per its valuation in the previous year. (Para 20)

Copy of judgement: Judgement_15-Oct-2019

-Adv. Tushar Kaushik 

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