Ashok Shankar Vs ACIT (ITAT Delhi)
Summary: The Delhi ITAT dismissed both appeals filed by the assessee for assessment year 2020-21 under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. The case concerned an overseas bank account with Emirates NBD Bank, Dubai, in which AED 5,000 had been deposited, and an AED 3,000 investment in the share capital of Santech International FZE, UAE. The Revenue had received information from UAE authorities under the India-UAE DTAA Exchange of Information provisions and the assessee had not disclosed the foreign assets in his income-tax returns or Schedule FA. The assessee contended that the AED 5,000 had been transferred by a friend for starting a business and that he had not made the AED 3,000 investment in Santech. The Tribunal held that the explanations and sources were not satisfactorily established. It held that the undisclosed foreign assets came to the Assessing Officer’s notice in financial year 2019-20 and therefore were chargeable for assessment year 2020-21 under Sections 3, 4 and 5 of the 2015 Act. The quantum additions were upheld. The Tribunal also upheld the penalty of Rs. 1,86,810/- under Section 41, while leaving open the broader question whether penalty under Section 41 is mandatory or discretionary.
Cases Discussed
FULL TEXT OF THE ORDER OF ITAT DELHI
These two appeals in BMA Nos. 12 & 13/Del/2026 both for assessment year: 2020-21 are filed by the assessee , which have arisen from separate appellate order(s) passed by learned Commissioner of Income Tax (Appeals)-31, New Delhi, u/s 15 of The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (In Short “2015 Act”), firstly dated 23.12.2025 in Appeal No. 100005408486 ( appeal against quantum additionS) and secondly dated 23.01.2026 in Appeal No. 94/BM/2023-24(appeal arising against penalty levied u/s 41 of the 2015 Act).
2.1 The Grounds of Appeal raised by the assessee in Memo of Appeal in BMA No.12/DEL/2026 for assessment year 2020-21, reads as under:-
“1. The CIT(A) has erred on fact and in law in confirming the order of the AO under section 10(3) of the BM Act, 2015 without appreciating the facts and applying the legal provisions under the BM Act mechanically, without confronting any material. Thus, the order is wrong and bad in law and has to be quashed.
2. The CIT (A) has failed to appreciate that the AO in his order has noted that information with reference to foreign assets was available in 2016-17 during the search in the case of assessee on 27.4.2016 therefore if at all the relevant AY will be 2017-18 and not the impugned assessment year. Hence no addition should be made in this AY.
3. The CIT(A) has erred on facts and in law in confirming the addition that alleged undisclosed foreign asset
i. Bank Account No. 10140077057401 with Emirate NBD Dubai -AED 5,000
ii. Share capital in the company Santech International FZE, AED 3000
Without appreciating the fact that no asset existed in the previous year relevant to A.Y. 2020-21, thus no addition could be made as alleged undisclosed foreign asset and thus the order is wrong and bad in law.
4. The above grounds are independent and without prejudice to one another.
5. The appellant prayers to add, amend, forego any of the grounds at the time of hearing.
2.2 The Grounds of Appeal raised by the assessee in Memo of Appeal in BMA No.13/DEL/2026 for assessment year 2020-21, reads as under:-
“1. The Id. CIT(A) has erred on facts and in law in confirming the leavy of penalty u/s 41 of Rs. 1,86,810/-. The order levying of penalty is wrong and bad in law and should be deleted
2. The CIT(A) has failed to appreciate that there was no foreign asset or foreign income of the previous year relevant to A.Y. 2020-21 for levying penalty as undisclosed assets / income of the assessee.
3. The CIT(A) has failed to appreciate that penalty proceedings are independent of assessment proceedings and merely because the quantum addition is confirmed does not automatically lead to penalty.
4. The CIT(A) has failed to appreciate that section 41 uses the word ‘may’ and therefore the leavy is not mandatory in nature. Appellants explanation should have been accepted and penalty deleted.
5. The CIT(A) should have appreciated that there is no notice during the pendency of the proceeding under the BM Act for the relevant previous year in respect of penalty referred to in section 41 and hence in terms of provision of section 46(2) of the BM Act, no penalty could have been levied.
6. The appellant prays that he may be allowed to add, amend, alter forgo any of the grounds at the time of hearing
7. The above grounds are independent and without prejudice to one another.”
3. First, we shall take up the appeal of the assessee in BMA No. 12/Del/2026 for assessment year 2020-21, which is an appeal against quantum additions. The brief facts of the case are that the assessee is an individual being tax resident in India. A search and seizure operations under section 132 of the Income-tax Act, 1961 was carried on by Revenue in the case of Shri Sanjay Bhandari Group , on 27.04.2016. The assessee was also covered in the aforesaid search proceedings conducted by Revenue, in which certain evidences were found which unravelled that the assessee was in possession of some foreign income/assets. Information was also received from Competent Authority of UAE under provisions of ‘Exchange of Information’ Article of India-UAE Double Taxation Avoidance Agreement that the assessee has bank account bearing number 1014077057401 in his name and maintained with Emirates NBD Bank , Quasais Branch, P.O. Box 2923 , Dubai. As per information, aforesaid bank account was opened on 18.01.2010 , and the assessee is authorized signatory of the said bank account where in there are total cash deposits of AED 5025. The UAE authorities forwarded bank account statement, Customer information-Individuals form, KYC information and Account opening form duly signed by assessee. The name, date of birth and passport number of the assessee were duly reflected in the Customer Information as authorized representative. Information was also received that the assessee is one of the Directors of Santech International FZE(hereinafter called ‘Santech, UAE’) as well shareholder of the said entity. Santech ,UAE was incorporated on 21.02.2006 , the total Directors paid up share capital is AED 15000, while assessee’s paid up share capital was AED 3000. The assessee has not disclosed any foreign assets/income in his returns of income filed with Department, and no taxes have been paid .As per Revenue , the holding of aforesaid foreign assets and foreign income are undisclosed for the purposes of 2015 Act. The information was received by the AO from ld. ACIT , Central Circle-26, New Delhi vide letter dated 25.04.2019. Consequently notice u/s 10(1) of the 2015 Act was issued by the AO to the assessee on 30.07.2019 for determination of undisclosed foreign assets and income chargeable to tax under the 2015 Act for assessment year 2020-21, after assuming jurisdiction under 2015 Act.
The details of the manner in which concurrent jurisdiction under 2015 Act was assumed by the AO are described in the assessment order. The assessee was called upon by the AO to submit details of all overseas bank accounts maintained by him as well details of entities in which the assessee was Director or partner of firm since their opening along with sources of credits till date and narration of entries along with copy of account opening form along with details of authorised signatories. The AO asked assessee to explain the sources of cash deposits of AED 5025 in the said bank account. The assessee submitted that the credit of AED 5000 was received in the aforesaid bank account with Emirates NBD Bank , Dubai on 04.04.2010 , and not 18.01.2010. It was submitted that there was no cash deposits but the amount was deposited by his friend for the purposes of starting business in Dubai. It was submitted that nothing materialised and there were only debits of bank charges i.e. maintenance fee charged by the bank. It was submitted that credit of AED 25 was towards reversal of aforesaid maintenance fee, and the entry for which is appearing on December, 2012. It was submitted that account was closed on 06th April, 2017. It was submitted that proceeds are with the bank itself and the assessee has not received any remittance. It was submitted that the balance as on 06th April, 2017 was Nil. It was further contended that the assessee was not aware of this bank account till Enforcement Directorate made aware the assessee of its existence. Since, no details were furnished by the assesse, the AO asked for complete and specific details, and show cause the assessee as to why in the absence of evidence, same be not brought to tax under 2015 Act. The assessee reiterated its submissions. The AO rejected the contentions of the assessee, and brought to tax total taxable credit of AED 5000 being credits in the aforesaid bank account maintained by the assessee with Emirates NBD Bank , Dubai , under 2015 Act, leading to additions of Rs. 94,525/- being deposits of AED 5000 made by the assessee in bank account number 1014077057401 maintained with Emirates NBD Bank, Qusais Branch, Dubai , representing assessee’s undisclosed foreign asset for assessment year 2020-21.The AO observed that the assessee has never shown any income or information related to such foreign assets in schedule FA from assessment year 2010-11 to assessment year 2020-21 in his income tax return.
3.2. Further, with respect to investment of AED 3000 in Santech, UAE, the AO observed that the information was received from UAE authorities that the assessee is one of the Director as well Shareholder of Santech, UAE. Copy of the Memorandum and Articles of Association of Santech, UAE was received from the Competent Authorities in UAE. The assessee is one of the signatories of its Memorandum and Articles of Association. The assessee was called upon by the AO to submit all overseas bank accounts maintained by him as well details of entities in which the assessee was Director or partner of firm since their opening along with sources of credits till date and narration of entries along with copy of account opening form along details of authorised signatories. The assessee submitted that the assessee is not having bank account of Santech, UAE as it does not belong to him. It was submitted that this company was started around financial year : 2005-06 by Mr. Sanjay Bhandari , wherein he was allotted 10% shares. It was submitted that nothing was paid/contributed by him. It was submitted that primary objective was to explore opportunities in lucrative oil and gas industry. It was submitted that his name was put as Director and he facilitated in opening of the bank account. It was submitted that the assessee was not aware of any further development. The AO sought further details from the assessee as the assessee had made assertion that he did not contributed to share capital of Santech , UAE , albeit he held 10% of share capital which was AED 3000. The AO rejected the contentions of the assessee, and observed that the assessee paid share capital of AEZ 3000 in Santech, UAE in which he is one of the Director. The AO brought to tax AED 3000 paid share capital of the assessee in Santech, UAE in bank account no. 1014077057401 maintained with Emirates NBD Bank , Quasais Branch, Dubai, representing undisclosed foreign asset liable to be taxed in the hands of the assessee in view of Section 3,4 and 5 of the 2015 Act, leading to additions in the hands of the assessee to the tune of Rs. 56,175/- representing assessee’s undisclosed foreign asset for assessment year 2020-21.The AO observed that the assessee has never shown any income or information related to such foreign assets in schedule FA from assessment year 2010-11 to assessment year 2020-21 in his income tax return.
4. Aggrieved, the assessee filed first appeal with ld. CIT(A), who dismissed the appeal of the assessee.
5. Still aggrieved, the assessee has filed second appeal with ITAT. The ld. Counsel for the assessee drew our attention to the orders passed by authorities below. The ld. Counsel for the assessee submitted that the assessee is Tax-Resident in India. The assessee opened bank account in Dubai for starting business. It was opened on 04.04.2010 and closed on 06.04.2017. It was submitted that the said bank account was never reported to department.The ld. Counsel for the assessee drew our attention to bank statement which is placed in paper book at page 16-19. It was submitted that the amount of AED 5000 was transferred on 14.04.2010 by his friend from his bank account maintained with Emirates NBD Bank. It was submitted that the assessee never deposited any amount in the said bank account. With respect to the investment of AED 3000 in Share capital of Santech, UAE, it was submitted that the assessee is not shareholder . It was submitted that the assessee is Director. It was submitted that the assessee has filed return of income for assessment year 2010-11 declaring total income of Rs. 30,25,531/- .
5.2. The ld. CIT-DR submitted that there are credits in the bank account maintained by the assessee with Emirates NBD Bank, Dubai in the name of the assessee to the tune of AED 5000. The said amount was never disclosed to department and no taxes were paid. It was submitted that the assessee is signatory to Memorandum and Articles of Association of Santech,UAE. The assessee holds 10% shares of Santech, UAE. The paid share capital of the assessee is AED 3000 in Santech. The assessee never disclosed the said share capital to department either vide disclosure u/s 59 of 2015 Act and also no disclosure was made in FA schedule in ITR’s filed with the department. The said amount had never suffered taxation in India. The ld. CIT-DR relied on the orders of authorities below and the provisions of 2015 Act.
6. We have considered rival contentions and perused the material on record. Before proceeding further, it will be relevant to consider in brief the background, and objective of The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. Briefly stating, It is stated in the statement of objects and reasons to the 2015 Act that stashing away of black money abroad by some people with intent to evade taxes has been a matter of deep concern to the nation. ‘Black Money’ is a common expression used in reference to tax-evaded income. Evasion of tax robs the nation of critical resources necessary to undertake programs for social inclusion and economic development. It also puts a disproportionate burden on the honest taxpayers as they have to bear the brunt of higher taxes to make up for the revenue leakages caused by the evasion. The money stashed away abroad by evading tax could also be used in ways which could threaten the national security. It is also stated that the Central Government is strongly committed to the task of tracking down and bringing back undisclosed foreign assets and income which legitimately belong to the nation. Thus, this new legislation i.e. 2015 Act deals with undisclosed assets and income stashed away abroad.It also recognizes that Hon’ble Supreme Court of India has also expressed concern over this issue. The SIT constituted by the Central Government to implement the decision of the Supreme Court has also expressed the views that measures may be taken to curb the menace of black money . Internationally a new regime for automatic exchange of financial information is fast taking shape, and India is a leading force in this effort.
6.2 The 2015 Act has provided for stringent measures to enable taxation of undisclosed foreign income and assets, and to punish by way of stringent penalties as well prosecution of the persons indulging in illegitimate means of generating money causing loss to the revenue. It also recognizes that the 2015 Act will also prevent such illegitimate income and assets kept outside the country from being utilized in ways which are detrimental to India’s social , economic and strategic interests and its national security.
6.3 Thus, the 2015 Act is enacted to deal with the menace of stashing away of black money abroad in the form of undisclosed foreign income and assets which is causing wreck to economic fabric of the nation , and to bring to tax , penalties and prosecution w.r.t. undisclosed foreign income and assets. Reference is drawn to provisions of Section 2(11) which stipulates that “undisclosed asset located outside India” means an asset (including financial interest in any entity) located outside India, held by the assessee in his name or in respect of which he is a beneficial owner, and he has no explanation about the source of investment in which asset or the explanation given by him is in the opinion of the AO unsatisfactory. Similarly, “undisclosed foreign income and asset” means the total amount of undisclosed income of an assessee from a source located outside India and the value of an undisclosed asset located outside India, referred to in Section 4 of the 2015 Act, and computed in the manner laid down in Section 5 of the 2015 Act.Section 3 is a charging section which stipulates that there shall be charged on every assessee for every assessment year commencing on or after the 1st day of April, 2016, subject to the provisions of the 2015 Act , a tax in respect of his total undisclosed foreign income and asset of the previous year at the rate of thirty percent of such undisclosed income and asset. Provided that an undisclosed asset located outside India shall be charged to tax on its value in the previous year in which such asset comes to the notice of the Assessing Officer. Even undisclosed foreign bank account ( even if it is closed prior to enactment of 2015 Act) is an undisclosed asset within the four corner of the 2015 Act. Further, it stipulates that “value of an undisclosed asset” means the fair market value of an asset (including financial interest in any entity) determined in such manner as may be prescribed. Section 4 of the 2015 Act , provide for scope of total undisclosed foreign income and asset which stipulates that the subject to provisions of the 2015 Act, the total undisclosed foreign income and asset of any previous year of an assessee shall be the income from a source located outside India , which has not been disclosed in the return of income furnished within the time specified in Explanation 2 to subsection (1) or under sub-section (4) or sub-section (5) of Section 139 of the Income-tax Act ; the income from a source located outside India, in respect of which a return is required to be furnished u/s 139 of the 1961 Act but no return of income has been furnished within the time specified in Explanation 2 to subsection (1) or under sub-section (4) or sub-section (5) of Section 139 ; and the value of an undisclosed asset located outside India. There is no time barring period stipulated under 2015 Act for initiating assessment or reassessment proceedings to bring to tax undisclosed foreign income and assets. As per Section 10(1) of the 2015 Act, for the purpose of making assessment or reassessment under 2015 Act, the AO may, on receipt of an information from an income-tax authority under the 1961 Act or any other authority under any law for the time being in force or on coming of any information to his notice, serve on any person, a notice requiring him to on a date to be specified to produce or cause to be produced such accounts or documents or evidence as the AO may require for the purpose of the 2015 Act and may, from time to time , serve further notices requiring the production of such other accounts or documents or evidences as he may require. No order of assessment or reassessment shall be made u/s 10 after the expiry of 2 years from the end of the financial year in which notice u/s 10(1) was issued by the AO.
6.4 Coming back to the instant appeal , brief facts are that the assessee is an individual being tax resident in India under the provision of Section 6(1) of the Income-tax Act, 1961(hereinafter called ‘1961 Act’). We have already seen the purpose and purport of 2015 Act being a Special Act enacted to deal with the menace of black money stashed abroad, and to bring to tax undisclosed foreign assets and income. Stringent penalties and prosecution provisions are incorporated in the Act to deal with menace of black money stashed abroad. The 2015 Act is applicable to tax residents within the meaning of Section 6 of the Income-tax Act, 1961(hereinafter called 1961 Act) as well to Non-resident or not ordinarily residents in India within meaning of clause (6) of Section 6 of the 1961 Act in the previous year, who were resident in India either in the previous year to which the income referred to in section 4 of 2015 Act relates ; or in the previous year in which the undisclosed asset located outside was acquired : provided that the previous year, in case of acquisition of undisclosed asset outside India , shall be determined without giving effect to the provisions of clause(c) of section 72. Thus, the assessee is covered under the provisions of 2015 Act being tax resident of India. The assessee filed its return of income u/s 139 on 17.03.2012, declaring income of Rs. 30,25,531/-. Search and Seizure operations were carried on by Revenue u/s 132 of the 1961 Act on Sanjay Bhandari Group on 27.04.2016. The assessee was also covered under the aforesaid search and seizure operations. Certain incriminating evidences were found by Revenue during search operations which indicated that the assessee was in possession of some foreign income and assets. Information was received by Revenue from Competent Authorities of UAE under the provisions of Exchange of Information Article under India-UAE DTAA, which information revealed that the assessee is having a bank account bearing account number 1014077057401 maintained in his name with Emirates NBD Bank, Qusais Branch, P O Box 2923, Dubai , in which there were deposits of AED 5025. The amount of AED 5000 was deposited on 14.04.2010, while AED 25 was reversal of maintenance fee being bank charges reversed by the Bank. The dispute is confined to AED 5000. The assessee being signatory of the bank, and the UAE authorities forwarded bank statement, KYC Information, Customer Information-Individuals Form and account opening form duly signed by the assessee. In the Customer Information-Individual’s Form , name , date of birth and passport number of the assessee was reflected , as authorized representative. These facts have remained uncontroverted even as of now. The contention of the assessee is that the said amount of AED 5000 was deposited by way of bank transfer from his friend account. Similarly, information was also received by Revenue from UAE Authorities that the assessee is signatory to Memorandum and Articles of Santech, UAE, and is Director-Shareholder of Santech UAE, having invested AED 3000 in Santech, UAE’s share capital , wherein assessee holding is 10% shares. The aforesaid information was received by AO from ld. ACIT, Central Circle -26, vide letter No. F.No. ACIT/CC-26/2019-20/59 dated 25.04.2019. The concurrent jurisdiction to the AO to exercise powers under 2015 Act was granted vide orders u/s 120 dated 08.06.2017. Notice dated 30.07.2019 u/s 10(1) of the 2015 Act was issued by the AO to the assessee. Admittedly, the assessee has neither declared the said bank account nor declared investment in Santech , UAE in the returns of income filed with department since making the said investment in Santech, UAE or deposits in the bank account, nor had declared the aforesaid share investments made in Santech, UAE or deposits in bank account u/s 59 of the 2015 Act. The same is also not declared in FA schedule to ITR. The assessee was confronted by the AO. The assessee submitted that AED 5000 was deposited in his bank account maintained with Emirates NBD Bank, Dubai on 14.04.2010 by his friend by way of bank transfer from his bank account, to start business in Dubai. No further details of the friend or evidences to that effect were submitted to substantiate or rebut the chargeability of such undisclosed foreign bank deposits with in purview of 2015 Act. It was incumbent on the assessee to explain and submit complete details /sources of such bank deposits as to how the amount of AED 5000 stood credited in the bank account which was opened in Dubai in his name.Merely saying that his friend deposited AED 5000 in his bank account is not sufficient. Similarly, with respect to the investment of AED 3000 in share capital of Santech, UAE, it was submitted by the assessee that the assessee has not made any investment. The assessee is signatory to Memorandum and Articles of Association of Santech, UAE. The assessee has admitted before the authorities below that Mr. Sanjay Bhandari started the said company in UAE in 2005-06 wherein he was allotted 10% shares.It was also stated by the assessee before the authorities below that the said company was started to explore opportunities in lucrative oil and gas industry. Thus, the assessee is in full knowledge and was aware of the state of affairs of Santech, UAE. Admittedly, the assessee has neither declared the said bank account as well investment in Santech, UAE in the returns of income filed with department since making the said investment in Santech, UAE or deposits in the bank account nor had declared the aforesaid share investments made in Santech, UAE or deposits in bank account u/s 59 of the 2015 Act. As per deeming fiction created by clause (c) of Section 72 where any asset has been acquired or made prior to commencement of the 2015 Act, and no declaration in respect of the such asset is made under Chapter VI of 2015 Act, such asset shall 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 2015 Act shall apply accordingly. The 2015 Act has come into force on 01.07.2015. As per charging Section 3 of the 2015 Act, the undisclosed asset located outside India shall be charged to tax on its value in the previous year in which such asset comes to the notice of the AO. The information was forwarded by ld. ACIT, Central Circle-26, New Delhi to the AO on 25.04.2019. Thus, the AO came to know of the aforesaid information in financial year 2019-20 , and hence relevant assessment year is assessment year 2020-21. The assessee being tax resident through out and continues to be tax-resident even till impugned assessment year i.e. when aforesaid bank deposits were made on 14.04.2010 or when investment in Santech, UAE was made, has not made any declaration under Chapter VI of 2015 Act of the undisclosed foreign income and asset nor the same were declared in the income tax returns for the relevant assessment year and thereafter. The assessee has even not disclosed the aforesaid foreign asset in the Schedule FA filed in ITR , from year to year. Moreover, disclosure in Schedule FA itself is not sufficient , and the assessee being resident is required to substantiate that the foreign assets has not been acquired from the amount which are chargeable or assessable to income-tax in India at the relevant times , or if it is so chargeable or assessable to income-tax in India during the relevant time, the same has been duly offered to tax and due taxes paid in India. Thus, the assessee being tax-resident in India is required to substantiate that the asset has not been acquired from the amount which are chargeable or assessable to income-tax in India at the relevant times , or if it is so chargeable or assessable to income-tax in India during the relevant time, the same has been duly offered to tax and due taxes paid in India. The assessee has failed to explain the sources of acquisition of aforesaid undisclosed foreign assets viz. deposit in the bank account and investment in Santech, UAE. It is also observed by the authorities below that it is only after detection by the authorities as to aforesaid foreign assets and income, that the assessee came forward and offered its explanation, which is found to be not satisfactory . It is only after been confronted with by the authorities , the assessee came forward and gave his explanation, which is not satisfactory as to the sources of making such undisclosed bank deposits in foreign bank account in UAE as well to sources of making investment in Santech, UAE. The said undisclosed sources have not suffered taxation in India vis-à-vis clinching evidences produced by Revenue as above, leads to one and one irresistible conclusion that the assessee is liable to be charged to tax under the 2015 Act . Thus, The explanation offered by the assessee does not inspire confidence, and the assessee is not coming out with true and complete facts. These are facts which are especially within the knowledge of the assessee, and the same are withheld by the assessee, the presumption will be drawn against the assessee. Reference is drawn to provisions of Section 106 of the Indian Evidence Act,1872(Corresponding new Provision Section 109 of The Bhartiya Sakshya Adhiniyam, 2023). Thus, we have no hesitation in holding that the assessee is liable to be charged to tax under the charging section 3 read with Section 4 and 5 of the 2015 Act, and we uphold the assessment orders passed by ld. AO u/s 10(3) of the 2015 Act which was later confirmed by ld. CIT(A). The assessee fails in its appeal. We order accordingly.
7. In the result, appeal filed by the assessee in BMA No. 12/Del/2026 stands dismissed.
Appeal: BMA No. 13/Del/2026
8. This appeal arises from penalty of Rs. 1,86,810/- imposed by the ld AO u/s 41 of the 2015 Act which was later confirmed by ld. CIT(A) as the appeal of the assessee stood dismissed by ld. CIT(A), which is consequential to the aforesaid quantum additions made by the AO vide assessment order passed u/s 10(3) of the 2015 Act(appeal against quantum additions is adjudicated by us vide this common order in BMA No. 12/Del/2026 in the preceding para’s) . We have confirmed quantum additions as were made by the AO and as confirmed by ld. CIT(A) , vide our orders in Appeal in BMA No. 12/Del/2026 in the preceding para’s of this common order. The main bone of contention of the assessee is that the penalty imposable u/s 41 of the 2015 Act is not mandatory , and rather it is discretionary depending upon facts and circumstance of each case. The reliance is placed by ld. Counsel for the assessee on the order passed by the Special Bench of the Tribunal in the case of Vinil Venugopal v. DDIT(Inv.) (2025) 179 com 618(Mum-SB). The prayers are made to delete the penalty . The ld. CIT-DR relied upon the orders of the authorities below. We have observed that the said order was passed by Special Bench in context of Section 43 of the 2015 Act, while we are presently concerned with Section 41 of the 2015 Act. We have elaborately discussed facts of the instant case while adjudicating appeal against quantum additions , vide our order in BMA No. 12/Del/2026 as above, and upheld the additions as were made by the AO and later as confirmed by ld. CIT(A). Thus, we are of the considered view that keeping in view peculiar facts and circumstances of the instant case, the AO has rightly levied the penalty u/s 41 of the 2015 Act which was rightly upheld by ld. CIT(A). So far as reliance of the ld. Counsel for the assessee on the Special Bench decision that on the same parity, penalty leviable u/s 41 of the 2015 Act is also directory in nature and not mandatory, we are keeping the said question open to be adjudicated in an appropriate case, for the reasons that we are confirming the penalty levied in the instant case on the basis of peculiar facts and circumstances of the instant case. The facts are enumerated in details in the preceding para’s of this common order while adjudicating appeal against quantum additions, and are not repeated. The assessee also fails in this appeal. We order accordingly.
9. In the result, appeal filed by the assessee in BMA No. 13/Del/2026 also stands dismissed.
10. In the result, both the appeals filed by the assessee in BMA No. 12 & 13 / Del/2026 stands dismissed.
Orders are pronounced in the Open Court on 05.08. 2026.
