ACIT Vs Rohit Krishna (ITAT Mumbai)
Income Tax Appellate Tribunal (ITAT), Mumbai, addressed five appeals filed by the Revenue in the case of ACIT vs. Rohit Krishna. These appeals pertained to penalties imposed under Section 43 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. The penalties were levied for the non-reporting of a foreign asset, specifically an investment account with Equatex UK Ltd., in Schedule FA (Foreign Assets) of the income tax returns filed by the assessee for the relevant assessment years. The Assessing Officer contended that such non-reporting warranted a penalty of ₹10 lakhs for each year. However, the assessee argued that the asset was adequately disclosed under Schedule AL (Assets and Liabilities) of the tax return and fully taxed as income from Employee Stock Options (ESOPs).
After reviewing the case, the ITAT highlighted the purpose of the Black Money Act, emphasizing that it addresses undisclosed foreign income and assets rather than technical or bona fide reporting errors. The tribunal found no malafide intent on the part of the assessee and noted that the foreign asset in question had not been concealed entirely. Citing legislative intent and judicial precedents, including the principle that penalties should not be imposed for minor or inadvertent breaches, the ITAT ruled in favor of the assessee. The tribunal consequently deleted the penalties and dismissed the Revenue’s appeals, reinforcing the discretionary and balanced application of stringent tax provisions.
