AJAY KUMAR PATEL,KOLKATA V. ADDL.CIT, RANGE 34, KOLKATA

CO 71/KOL/2025

AI Insights

The case involves an appeal by the Assistant Commissioner of Income Tax (ACIT), Range-34, Kolkata against Ajay Kumar Patel concerning the assessment year 2019-20. The dispute centered on the applicability of the BMA to certain foreign bank accounts and income which the assessee claimed were inherited and thus not undisclosed foreign assets or income chargeable to tax in India. The tribunal examined the validity of the jurisdiction assumed by the Assessing Officer under the BMA, the applicability of the Act to pre-existing foreign bank accounts, and the legal grounds on which the assessee contested the additions made to his income for the assessment year 2019-20.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 831514 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 11 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 20-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 09-10-2025
• Other Referred Cases: Rashesh Manhar Bhansali Vs Addl. CIT, K. Mohammed Haris v. Income-tax Department, PCIT (Central) v. Income Tax Settlement Commission & Anr., Kurbanhussein Ibrahimji Mithiborw Vs. CIT, Nyalchand Malukchand Dagli v. CIT, CIT v. Norton Motors, SSS Projects Ltd. V. DCIT, PCIT V. Tata Sons Ltd.
• Laws Referred To: Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: . DECISION
• Keywords: Revised return; Invalid notice; Retrospective amendment; Cost of acquisition; Capital receipt; Gift; Capital Gains; Competent authority; Validity of assessment
• Section: 147; 148; 139; 10; 139(5)

Judgement Text

"आयकर अपीलȣय अͬधकरण, कोलकाता पीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH KOLKATA Before Shri Rajesh Kumar, Accountant Member and Shri Pradip Kumar Choubey, Judicial Member BMA No.4/Kol/2025 Assessment Year: 2019-20 ACIT, Range-34, Kolkata………..……..………………….……….……….……Appellant vs. Ajay Kumar Patel…………. …………………………..……......……...…..…..Respondent 2, 3rd Floor, Brabourne Road, Kol-1. [PAN: AFYPP9398B] C.O No.71/Kol/2025 (A/o BMA No.4/Kol/2025) Assessment Year: 2019-20 Ajay Kumar Patel…………. …………………………..…….....……...…..…..Cross-objector 2, 3rd Floor, Brabourne Road, Kol-1. [PAN: AFYPP9398B] vs. ACIT, Range-34, Kolkata………..……..………………….…………………..…Respondent Appearances by: Shri S. K. Tulsiyan, Advocate & Abha Agarwal, FCA appeared on behalf of the assessee. Shri P. N. Barnwal, CIT-DR, appeared on behalf of the Revenue. Date of concluding the hearing : November 10, 2025 Date of pronouncing the order : January 20, 2026 ORDER Per Pradip Kumar Choubey, Judicial Member: The appeal filed by the revenue and a cross-objection filed by the assessee are directed against the order dated 22.04.2025 of the CIT(A)- 20, Kolkata (hereinafter referred to as the “CIT(A)”) which is arising out of an order of Assessing Officer passed u/s 10(3) of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (hereinafter referred to as “BMA”) for the assessment year 2019–20. Printed from counselvise.com BMA No.4/Kol/2025 & C.O No.71/Kol/2025 Ajay Kumar Patel 2 2. The revenue’s appeal has been filed with a delay of 21 days and the revenue has filed a petition for condonation of the delay in this regard. After considering the said petition, we condone the delay in filing the appeal and proceed to dispose of the appeal on merits. 3. The Revenue has preferred appeal being BMA No.04/Kol/2025 and the assessee has filed cross-objection bearing no. C.O 71/Kol/2025 taking the legal ground. Since, the assessee has filed cross-objection by taking legal ground regarding the validity of assumption of jurisdiction of the Assessing Officer to issue notice u/s 10(1) of BMA Act, therefore, we decide to take the cross-objection first for which the department has not raised any objection. C.O No.71/Kol/2025 4. The assessee in its cross-objection has taken the following grounds: “1. That the Ld. CIT(A) erred in upholding the assumption of jurisdiction u/s 10 of the Black Money (Undisclosed Forzign Income and Assets) and Imposition of Tas Act, 2015 (BMA), which is bad in law inasmuch as the investment in the impugned foreign bank accounts represented capital inherited by the Assessee from his late father and was therefore not 'undisclosed foreign income or asset chargeable to tax in India under the Income-tax Act, 1961 (the ITA’) 2. That the Ld. CIT(A) erred in upholding the applicability of the BMA, which came to force w.e.f. I July 2015, to the impugned foreign bank accounts acquired prior to that date out of income not chargeable to tax in India, the finding that the BMA applies to such pre-existing and explained capital is contrary to the charging mechanism in section 3(1) read with the transitional provision in section 59 of the BMA, notwithstanding that the addition relating to inherited deposits was deleted on merits. 3. That the Ld. CTT(A) further failed to appreciate that section 59 of the BMA applies only where (1) there exists an undisclosed asset located outside India and (it) such asset was acquired from income chargeable to tax in India for any year prior to AY 2016-17. Since the deposits in the impugned foreign bank accounts represented inherited capital not chargeable under the ITA, no declaration was required u's 59 and consequently section 72(c) had no application, moreover, the historic interest Income of earlier years lay outside the ambit of the UMA and, if at all, was taxable only under the ITA Printed from counselvise.com BMA No.4/Kol/2025 & C.O No.71/Kol/2025 Ajay Kumar Patel 3 4. That the Ld. CIT(A) erred in upholding the initiation of proceedings under the BMA even though the statutory condition of the foreign maet or income being 'undisclosed\" sections 2(11) and 4(1)(c)] was not satisfied, the AO himself having recorded in his letter dated 31-05-2018 that the Assessee had already disclosed the impugned foreign bank accounts and the related income in the revised returns for AY 2015-16 and AY 2016-17 and paid due tax thereon 5. That the Ld. CIT(A) erred in upholding the validity of the notice dated 13-04-2018 issued u/s 10(1) of the BMA, which in void ab initio as it failed to specify the relevant financial year for which the assessment was proposed as required by the scheme of sections 3 and 4 of the BMA and was issued well after the close of F.V. 2016-17 when the Department had already become aware of the impugned foreign bank accounts; such a defective and belated notice vitiates the assumption of jurisdiction under the BMA 6. That, without prejudice to the foregoing grounds and without disturbing the relief already granted by the Ld. CIT(A) in respect of inherited deposits, the Ld. CIT(A) erred in upholding the assessment of the impugned foreign bank accounts in A.Y. 2019-20 under the proviso to section 3(1) of the BMA even though the asset had already come to the notice of the Department during F.Y. 2016-17 through investigation-stage summons, statements, voluntary disclosure letters and its reporting in the revised returns dated 04.12.2016 for A.Ys 2015-16 and 2016-17, all of which occurred in FY 2016-17; the subsequent administrative authorisation of the ADIT as A.O, in March 2018 could not defer the year of chargeability fixed by the proviso, which, if at all, was A.V. 2017-18 (FY 2016-17) and not A.Y 2019-20 7. That, in continuation of the preceding ground and without prejudice to it, the L. CIT(A) further med in law in sustaining the assessment of the value of the impugned foreign bank accounts in AY 2019-20 by relying on section 72(c) of the BMA, whereas the proviso to section 3(1)-being part of the charging section fixes the year of chargeability as the previous year in which the asset first came to the notice of the Department, namely FY 2016-17 (AY 2017-18); the deeming fiction la section 72(c) cannot override the charging provision to shift the charge to the year of issue of notice (FY 2018-19). 8. That further and without prejudice, even on the Department's own contention that the impugned foreign bank accounts came to the notice of the A.O only upon his authorisation on 25-03-2018 (Le. during FY 2017- 18), the chargeability under the proviso to section 3(1) could at best arise for AY 2018-19 (FY 2017-18) and not for AY 2019-20 as done in the impugned assessment. 9. That the Ld. CIT(A) erred in sustaining the addition of Rs. 52,77,108/- (Rs. 26,38,554/- in the Assessee's share) representing historic interest for FY 2009-10 to 2013-14 on inherited deposits, even though such sums Printed from counselvise.com BMA No.4/Kol/2025 & C.O No.71/Kol/2025 Ajay Kumar Patel 4 were not an \"undisclosed foreign asset but constituted income of earlier years outside the charging ambit of the BMA. 10. That the Ld. CIT(A) failed to appreciate that any historic income accruing in years prior to the coming into force of the BMA on 01-07-2015- such as the interest on inherited funds-was assessable, if at all, only under the then-existing provisions of the ITA (e.g. sections 147 to 149) and could not be brought to tax under the BMA. 11. The Respondent-Assessee craves leave to amend, alter, modify, substitute or add to the above grounds of cross-objection at the time of hearing or as may be permitted by the Hon'ble Tribunal in the interest of justice.” 5. Brief facts of the case are that the assessee is an individual resident in India and filed return of income u/s 139(1) of the Act within prescribed time limit. On credible information about the foreign assets/income, DDIT(Investigation), Vadodara issued summons u/s 131(1A) of the Income Tax Act (hereinafter referred to the ‘Act’) to Ajay K Patel and in response to same, Ajay K Patel denied that he and/or his wife Mita Ajay Patel is holding any foreign assets/investment till date but he accepted that he was having foreign bank account being part of inheritance fund. The assessee after realising his mistake regarding the disclosing the existence of such foreign assets, filed revised return of income u/s 139(5) for assessment years 2015-16 and 2016-17 wherein he disclosed the foreign bank accounts and offered the corresponding foreign income to tax and paid due taxes. The assessee had filed a letter before the jurisdictional Assessing Officer in which he referred to the revised return for assessment years 2015-16 and 2016-17 and further made voluntary disclosure of additional incomes relating to assessment years 2009-10 to 2014-15 arising from the said foreign bank accounts. Since the statutory time limit for revising returns u/s 139(5) had already expired for those earlier years, the assessee requested the Assessing Officer to regularise such disclosure by issuing notices u/s 148 of the Act thereby enabling him to pay due taxes in accordance with law. The Assessing Officer rejected the submission filed by the assessee vide order Printed from counselvise.com BMA No.4/Kol/2025 & C.O No.71/Kol/2025 Ajay Kumar Patel 5 dated 05.03.2021 u/s 10(3) of the BMA for A.Y. 2019-20 by treating the entire deposits in the impugned bank accounts jointly held by the assessee with his wife comprising the inherited deposits as well as accrued interest and capital gains as \"undisclosed assets located outside India\" and calculated total credits at Rs.30,75,85,044/- and apportioned 50% in the hands of the assessee (15,37,92,522/-) which was added by the Assessing Officer in the hands of the assessee in the order passed u/s 10(3) of BMA dated 05.03.2021 and 50% in the hands of his wife in the manner as follows: 6. Aggrieved by the said order, the assessee preferred appeal before the ld. CIT(A) wherein the assessee challenged the very jurisdiction assumed by the Assessing Officer, validity of proceedings initiated on the basis of defective notice issued u/s 10(1) and also the additions on merits. The ld. CIT(A) vide its impugned order dated 22.04.2025 granted substantial relief to the assessee and deleted the addition of Rs.29,72,32,975/- as undisclosed foreign assets/income. The ld. CIT(A) further partly deleted Rs.12.81 lakhs as already offered in assessment years 2015-16 and A.Y 2016-17 but confirmed the addition of Rs.52.77 lakhs. The ld. CIT(A) further deleted the addition of Rs.25.50 lakhs as was disclosed already in the revised return of income in A.Y 2016-17 and Printed from counselvise.com BMA No.4/Kol/2025 & C.O No.71/Kol/2025 Ajay Kumar Patel 6 further deleted the addition of Rs.12.44 lakhs. Thus the ld. CIT(A) partly allowed the appeal of the assessee by discussing and holding as under: “4.5 DECISION: 4.5.(i) I have perused the fact of the case and the submission of the appellant on the issue of validity of proceeding conducted u/s 10(3) of the BM Act, 2015. The appellant in his submission has challenged the validity of both the issuance of notice u/s 10(1) of the Act and the completion of assessment u/s 10(3) of the Act. while challenging the validity of issuance of notice u/s 10(1) of the Act, the appellant has taken the plea that the information regarding the foreign asset/income was already available with the DDIT(Inv) Vadodara in the F.Y. 2016-17. So as per the CBDT instruction, DDIT(Inv) Vadodara was vested with the power of AO and was statutorily required to issue the impugned notice with in the period of 30 days from the end of F.Y. 2016-17 and i.e by 30th Apr 2017. The appellant has further stated that the concerned jurisdiction AO was also informed about the foreign asset vide letter dated16.01.2017. But both the authorities did not issue the notice u/s 10(1) of the Act within the stipulated time. Therefore, the notice issued u/s 10(1) of the Act on 13.04.2018 is barred by limitation. However, on perusal of the assessment order, I found that the AO has duly addressed the concern of the appellant regarding the time limitation for issuance of notice u/s 10(1) of the Act. The AO in para 2 of the assessment order has categorically stated that since the PAN-AFYPP9398B was assessed at Kolkata. Hence as per the provision of the BM Act, 2015 the proper jurisdiction for the investigation and assessment of the case was with the DGIT(Inv), WB, Sikkim & NER. Hence, with the approval of competent authority the jurisdiction of the assessee was assigned for investigation and assessment of the case to the DGIT(Inv), WB, Sikkim & NER. The AO has further stated in Para 4 of the assessment order that the Assistant/Deputy Director of Investigation, Unit 3(4), Kolkata was authorized to exercise the concurrent power and perform the function of Assessing officer in the case of Shri Ajay Kumar Patel by the PDIT(Inv), Kolkata vide order No. 125/2017-18 dated 28.03.2018. Therefore, the AO i.e ADIT(Inv), Unit 3(4), Kolkata issued the notice u/s 10(1) of the Act on 13.04.2018 for the assessment of the case under the provision of the BM Act, 2015. As it is clear that the AO in this case has issued the notice within the period of 30 days from the date on which, he was assigned the role of AO in this case. Hence, I do not find merit in the grounds taken by the appellant that the notice issued on 13.04.2018 is an invalid notice. By issuing the notice u/s 10(1) of the Act, the AO has not violated any instruction or direction issued by CBDT u/s 119 of the I.T. Act, 1961. Accordingly, the ground No. 1, 2 & 3 challenging the validity of the notice issued u/s 10(1) of the Act by the AO is rejected. 4.5.(ii) The appellant has also challenged the validity of assessment order passed u/s 10(3) of the Act on 05.03.2021 stating that the impugned assessment was completed on the basis of a defective/invalid notice u/s 10(1) of the Act. The appellant has stated the determination of income and assessment of amount chargeable to tax under the BM Act, 2015 is required to be done as per assessment year wise and not on a block basis. Accordingly, assumption of jurisdiction u/s 10 for making an assessment under the BM Act, 2015 also required to be done for each assessment year separately. The appellant has submitted that it is impermissible to issue a general notice for making assessment or doing the enquiry. Printed from counselvise.com BMA No.4/Kol/2025 & C.O No.71/Kol/2025 Ajay Kumar Patel 7 However, I do not find merit in the grounds taken by the appellant on this issue. Because the proviso to section 3(i) Of the BM Act, 2015 clearly stipulates that undisclosed assets located outside India shall be charged to tax on its value in the previous year in which such assets come to the notice of the Assessing officer. Further, it is also important to mention that Hon’ble Mumbai Tribunal in the case of Rashesh Manhar Bhansali Vs Addl. CIT [2021] 132 taxmann.com 20/[2022] 193 ITD 141 (Mum. Trib.) has held that undisclosed foreign bank account per se is an asset u/s 2(11) of the BM Act, 2015. The relevant para of the said judgement is reproduced here as under: “The assessee’s suggestion that section 2(11) refers to only such assets which have a cost of acquisition as section 2(11) defines the undisclosed assets located outside India as an assets (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 such assets or the explanation given by him is in the opinion of the Assessing officer unsatisfactory, is not appealing for the simple reason that an amount receivable from the bank in respect of a bank account is certainly an asset of the person holding that account, for all practical and legal purposes. While such a bank account is an asset, the cost of this asset is the deposit made in the account by the account holder or receipts diverted to such an account by the account holder. If the owner of a bank account has say Rs.10 Crore in a bank account, he has to explain the source of investment in this bank account. If, for example, he can substantiate that out of this Rs.10 Crore, he has transferred Rs.5 Crores from his other bank account, which is duly disclosed to the tax authority, to that extent, the investment is explained. The requirements of section 2(11) can thus be clearly satisfied even in respect of a bank account. One has to understand that a bank account, in whatever way it is described, is an asset in the sense that it gives you ownership of the credit balance in the books of the bank, in that account. Of course, when it is debit balance, reflecting borrowings, that reflects a liability, but one is not really concerned about that fact situation. [para 91]” “Therefore, it is held that an undisclosed foreign bank account per se can indeed be treated as an asset under section 2(11) of the BMA [Para 92]” It is important to mention that the issue involved in the instant case relates to the assessment of amount lying in the undisclosed foreign bank accounts and as it is clear from the above judgement of the Hon’ble ITAT, Mumbai [Supra] that undisclosed foreign bank account per se can be treated as undisclosed assets u/s 2(11) of the BM Act, 2015. Further, the assessee in his submission himself has admitted that in case of undisclosed foreign assets, it is provide that the same shall be charged to tax under the BM Act during the previous year in which it come to the notice of the AO. Hence, in view of the above, I do not find any infirmity/defect in the notice issued u/s 10(1) of the Act and hence the assessment order passed in pursuance of a valid notice cannot be held as invalid/illegal assessment order. Accordingly, the grounds taken by the appellant regarding the validity of the assessment order passed u/s 10(3) of the Act is found without merit and hence rejected. 4.8.2(c) DECISION: Printed from counselvise.com BMA No.4/Kol/2025 & C.O No.71/Kol/2025 Ajay Kumar Patel 8 I have perused the submission of the appellant on the issue of Interest income earned on the deposit in the HSBC Bank account and the STCG earned. Although the appellant has disputed the addition of interest income of GBP 71,704.72 in the total undisclosed foreign income by the AO on various grounds. But as far as the fact of the case is concerned, it can be seen that he himself has included the interest income of GBP 6,398.31 and GBP 7,605.54 in its total income in the ITRs filed for the A.Y. 2015-16 & 2016-17 respectively. Further, the appellant has written a letter to the AO on 09.01.2017 by making disclosure of additional income (Interest income) in the A.Y 2009-10 to A.Y. 2013-14 stating that remedial measure may be initiated to assesses the interest income earned in the said years. So, it is clear from the fact that the assessee has neither disclosed the said interest income of GBP57700.87 equivalent to Rs.52,77,108/- in the ITRs filed for the relevant of A.Ys 2009-100 to 2013-14 nor the same was disclosed in the window period given for disclosure of undisclosed Foreign Assets and income u/s 59 of the BM Act, 2015 in the period 01.07.2015 to 30.09.2015. Hence, I find it appropriate to tax the amount of GBP 57700.87 equivalent to Rs.52,77,108/- in the BM Act, 2015. Further, I also find that since the appellant has already included the interest income earned on the deposits in the HSBC bank account of GBP6,398.31 and GBP 7,605.54 pertaining to F.Y. 2014-15 & 2015-16 in the ITRs filed for the A.Y. 2015-16 and A.Y 2016-17. So, there was no occasion for the AO to include the amount of GBP6,398.31 and GBP 7,605.54 pertaining to F.Y. 2014-15 & 2015-16 in the amount assessed as the undisclosed foreign income of the appellant. Hence, in view of the above, I am inclined to confirm the addition on account of undisclosed foreign interest income up to GBP57700.87 equivalent to Rs.52,77,108/- and delete the addition of (GBP 6,398.31 and GBP 7,605.54) equivalent to Rs.12,80,740/- pertaining to F.Y. 2014-15 & 2015-16. As such the addition of Rs.52,77,108/- is confirmed and the addition of Rs.12,80,740/- is deleted out of the total addition of Rs. 65,57,848. II. Furthermore, it is also important to mention that the appellant assessee in its submission has stated that in the F.Y. 2015-16 relevant for A.Y. 2016-17, he has earned STCG of GBP 27,884 and the same has been duly disclosed in ITR filed for A.Y. 2016-17 and he has paid taxes over the same. The submission of the appellant was verified from the revised ITR filed by him with the department and the computation of income submitted. Since, the appellant has already disclosed the STCG earned on the transaction recorded in the foreign bank account in its ITR filed for A.Y. 2016-17 and he has paid the due taxes on them. Therefore, I do not find merit in the decision of the AO in taking the amount of GBP27,884 equivalent to Rs.25,50,167/- as undisclosed foreign income of the appellant. Hence the addition of Rs.25,50,167/- is deleted. 4.8.3(c) DECISION: I have perused the fact of the case and the submission of the appellant on the issue of credit entries in the bank account maintained with Bank of America. From the perusal of the said bank account, it was found that most of the deposits are in petty amount and are in nature of either bank charges/other debit reversed or amount received back from ADA Global etc. Further, there is merit in the submission of the appellant that in the assessment proceeding, the AO had provided him the copies of bank statement prior to the year 2010. So, he was not in a position to explain the deposit entries/contra entries made in the said account after the year 2010. Therefore, in view of the above explanation of the appellant and the reconciliation statement filed with the submission, the Printed from counselvise.com BMA No.4/Kol/2025 & C.O No.71/Kol/2025 Ajay Kumar Patel 9 addition made of USD 19312 equivalent to Rs.12,44,053/- is not to be sustainable. Hence, it is deleted.” 7. The ld. AR challenges the very assumption of jurisdiction and determination of correct year of chargeability under BMA as well as residual addition of historic interest income pertaining to A.Ys 2010-11 to 2014-15. The ld. AR submits that the assessee’s case rests on the jurisdictional invalidity of the proceedings and the non-taxability of inherited capital and pre-2016 income under the BMA. The ld. AR also submits that the very authority of the A.O to initiate proceedings u/s 10(1) of the BMA on the footing that the impugned foreign bank deposits do not constitute “undisclosed foreign income or assets” within the meaning of the BMA. His submission is that the Ld. CIT(A) erred in upholding the assumption of jurisdiction u/s 10 of the BMA as the investment in the impugned foreign bank accounts represented capital inherited by the assessee from his late father and was therefore not ‘undisclosed foreign income or asset’ chargeable to tax in India under the Income-tax Act, 1961. The ld. AR brought our attention to the legislative object and scheme of charge embodied in the BMA, the charging provision of section 3, definitional clauses of sections 2(11) and 2(12) and the scope of provisions of section 4 which together define the ambit of the expression “black money.” The ld. AR further submits that the charging provision under section 3(1) applies prospectively from A.Y. 2016-17 onwards and the BMA cannot be invoked to tax the foreign income earned prior to its commencement or assets whose source is explained and not chargeable to tax under the IT Act. The ld. AR further submits that although section 4(1)(a)/(b) of the BMA does not itself specify a date of commencement, its operation is necessarily controlled by the charging words of section 3(1) of the BMA (“for every assessment year commencing on or after 1 April 2016”) and clauses (a) and (b) merely describe the nature of income that may be treated as “undisclosed”; they do not, by themselves, create a charge or extend it to Printed from counselvise.com BMA No.4/Kol/2025 & C.O No.71/Kol/2025 Ajay Kumar Patel 10 periods preceding the Act and the statutory power to tax such income arises only u/s 3(1) of the BMA, which confines the charge to assessment years beginning on or after A.Y. 2016-17. The ld. AR also submits that since the deposits in the impugned foreign bank accounts represented inherited capital not chargeable under the IT Act, no declaration was required u/s 59 and consequently section 72(c) had no application. Moreover, the historic interest Income of earlier years lay outside the ambit of the BMA and, if at all, was taxable only under the IT Act. Further submission in respect of the addition of Undisclosed Interest Income of STCG is that the applicability of the BMA which came to force w.e.f. 1st July 2015, to the impugned foreign bank accounts acquired prior to that date out of income is not chargeable to tax in India and the BMA applies to such pre-existing and explained capital is contrary to the charging mechanism in section 3(1) read with the transitional provision in section 59 of the BMA. The ld. AR also submits that the assessee included the interest income in its total income in the ITRs filed for the A.Y. 2015-16 & 2016-17 respectively and also the assessee had written a letter to the Assessing Officer by making disclosure of additional income (Interest income) in the A.Y 2009-10 to A.Y. 2013-14 stating that remedial measure may be initiated to assesses the interest income earned in the said years. 7.1 The ld. AR submits that it is clear from the above fact that the assessee has neither disclosed the said interest income in the ITRs filed for the relevant of A.Ys 2009-10 to 2013-14 nor the same was disclosed in the window period given for disclosure of undisclosed Foreign Assets and income u/s 59 of the BM Act, 2015 in the period 01.07.2015 to 30.09.2015. However the AR vehemently submitted the assessee voluntarily disclosed the said interest income vide letter dated 24.01.2017 & 07.03.2017 before the AO i.e. ITO ,Ward-34(2) Kolkata Printed from counselvise.com BMA No.4/Kol/2025 & C.O No.71/Kol/2025 Ajay Kumar Patel 11 requesting that earlier assessment years may be re-opened u/s 147 of the IT Act. 7.2 The ld. AR further submits that the initiation of proceedings under the BMA even though the statutory condition of the foreign assets or income being 'undisclosed\" sections 2(11) and 4(1)(c)] were not satisfied. The ld. AR submits that the Assessing Officer himself having recorded in his letter dated 31-05-2018 that the Assessee had already disclosed the impugned foreign bank accounts and the related income in the revised returns for AY 2015-16 and AY 2016-17 and paid due tax thereon. The ld. AR thus submits that once the Department had full knowledge of the asset and its source, and accepted the disclosure through processing u/s 143(1) of the IT Act, the condition of “undisclosed assets and income” u/s 2(11) of the BMA was no longer satisfied, so the invocation of section 10 and continuation of proceedings under the BMA was contrary to the statutory pre-conditions. 7.3 The ld. AR further challenges the validity of notice issued u/s 10(1) of the Act thereby submitting that since the issuance of the said notice fails to specify the relevant financial year for which the assessment was proposed as required by the scheme of sections 3 and 4 of the BMA and was issued well after the close of F.Y. 2016-17 when the Department had already becomes aware of the impugned foreign bank accounts. Therefore, the said notice is a defective one and also a belated notice which vitiates the very assumption of jurisdiction under the BMA. His submission is that the omission to mention the relevant financial year, coupled with the delay in initiation, goes to the root of jurisdiction and such type of defect is not curable under section 81 of the BMA, which, being pari materia with section 292B of the IT Act to protect only clerical or technical mistakes and not jurisdictional infirmities. His further submission is that the Ld. CIT(A) wrongly upheld the assessment of the Printed from counselvise.com BMA No.4/Kol/2025 & C.O No.71/Kol/2025 Ajay Kumar Patel 12 impugned foreign bank accounts in A.Y. 2019-20 under the proviso to section 3(1) of the BMA even though the asset had already come to the notice of the Department during F.Y. 2016-17 through investigation, summons, statements, voluntary disclosure letters and its reporting in the revised returns dated 04.12.2016 for A.Ys 2015-16 and 2016-17, all of which occurred in FY 2016-17. The subsequent administrative authorisation of the ADIT as A.O, in March 2018 could not defer the year of chargeability fixed by the proviso, which, if at all, was A.Y. 2017-18 (FY 2016-17) and not A.Y 2019-20. In support of his submission, the ld. AR relied on the following decisions: 8. Contrary to that, the ld. DR supports the impugned order. 9. Upon hearing the rival submissions and perusing the materials on record, we note that the assessee has challenged the appellate order on jurisdictional ground, year of chargeability under BMA and secondly on merits of the addition sustained by the ld. CIT(A) with respect to historic interest income. The ld. AR in the course of argument drew our attention Printed from counselvise.com BMA No.4/Kol/2025 & C.O No.71/Kol/2025 Ajay Kumar Patel 13 to the charging provision of section 3, definitional clauses of sections 2(11) and 2(12) and the scope of provision of section 4 which together define the ambit of the expression “black money, which reads as under: “Section 3(1) is the charging section of the BMA and provides that: “There shall be charged for every assessment year commencing on or after the 1st day of April, 2016, subject to the provisions of this Act, a tax in respect of the total undisclosed foreign income and asset of the previous year at the rate of thirty per cent of such undisclosed income and asset.” The proviso to section 3(1) states: “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.” Thus, the substantive charging provision under section 3(1) applies prospectively from A.Y. 2016-17 onwards, while the proviso merely determines the year of chargeability in cases of undisclosed foreign assets— it does not create any new or independent charge. The proviso introduces a limited retrospective mechanism only for valuation purposes by deeming that an undisclosed foreign asset (and not income) shall be taxed on its value in the previous year in which such asset first comes to the notice of the Assessing Officer. This enables pre-existing assets—if truly undisclosed within the meaning of section 2(11) of the BMA—to be taxed once upon discovery. However, the proviso does not extend the charge itself to undisclosed income, which remains taxable, if at all, only prospectively under the main provision. Accordingly, while the BMA levies tax prospectively, the proviso to section 3(1) serves only as a retrospective valuation trigger for assets that are both undisclosed and unexplained. It follows that the BMA cannot be invoked to tax foreign income earned prior to its commencement or assets whose source is explained and not chargeable to tax under the ITA. The legislative intent, therefore, is unmistakable:  Undisclosed foreign income is chargeable to tax only prospectively, i.e., from A.Y. 2016–17 onwards, in line with the commencement of the BMA.  Undisclosed foreign assets may be brought to tax retrospectively only for valuation purposes, and that too in the year in which such asset first comes to the notice of the Assessing Officer, provided it was acquired from income chargeable to tax under the ITA, as reinforced by section 59 of the BMA. Section 2(11) defines “undisclosed asset located outside India” as: “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 such asset or the explanation offered by him is not satisfactory in the opinion of the Assessing Officer.” Printed from counselvise.com BMA No.4/Kol/2025 & C.O No.71/Kol/2025 Ajay Kumar Patel 14 Section 2(12) defines “undisclosed foreign income and asset” as: “Undisclosed foreign income and asset means the total of the undisclosed income and the value of an undisclosed asset located outside India, referred to in section 4, and computed in the manner laid down in section 5.” These definitions establish the fundamental condition that the asset or income must be undisclosed, i.e.: (1) the assessee offers no explanation about the source, or (2) the explanation is unsatisfactory. Where, as in the present case, the source is fully explained and not chargeable to tax under the ITA, such asset cannot be treated as an “undisclosed asset” and therefore falls outside the BMA’s scope. Section 4(1) – scope of total undisclosed foreign income and asset Section 4(1) of the BMA defines the constituents of the “total undisclosed foreign income and asset” of a previous year. It includes three mutually exclusive categories: (a) The income from a source located outside India, which has not been disclosed in a return furnished within the time specified u/s 139(1) (Expl.2), 139(4) or 139(5) of the ITA; (b) income from a source located outside India where a return is required to be furnished under the ITA but not furnished within the time specified u/s 139(1) (Expl.2), 139(4) or 139(5) of the ITA; and (c) the value of an undisclosed asset located outside India. A plain reading reveals a deliberate legislative separation between foreign income—covered by clauses (a) and (b)—and foreign assets, governed by clause (c). This distinction becomes decisive when read with section 3(1) and its proviso: while the main charging provision applies prospectively from A.Y. 2016-17 onwards, the proviso allows a limited retrospective look-back only for the valuation of undisclosed assets. There is no parallel retrospective authority for income. Although section 4(1)(a)/(b) of the BMA does not itself specify a date of commencement, its operation is necessarily controlled by the charging words of section 3(1) of the BMA (“for every assessment year commencing on or after 1 April 2016”). Clauses (a) and (b) merely describe the nature of income that may be treated as “undisclosed”; they do not, by themselves, create a charge or extend it to periods preceding the Act. The statutory power to tax such income arises only u/s 3(1) of the BMA, which confines the charge to assessment years beginning on or after A.Y. 2016-17. Further, both clauses (a) and (b) of section 4(1) of the BMA expressly reference the return-filing provisions of section 139(1)/(4)/(5) of the ITA. The “default” contemplated under these clauses materialises only after the expiry of the prescribed time-limit for filing a return or for disclosing such income in a valid return. Hence, before that time expires, no default exists; and where the relevant return periods had already lapsed prior to 1 July 2015, no operative filing obligation survived to which the BMA could attach. Any Printed from counselvise.com BMA No.4/Kol/2025 & C.O No.71/Kol/2025 Ajay Kumar Patel 15 omission or non-disclosure for those earlier years stood concluded under the ITA and could be addressed only through its own machinery provisions (such as sections 147–149). Accordingly:  Prospective scope for income: The charge on undisclosed foreign income u/s 4(1)(a)/(b) operates only prospectively—from A.Y. 2016-17 onwards—because the charging section 3(1) itself commences from that year and because the triggering default (non-filing or non-disclosure within section 139 time-limits) can arise only after the BMA’s commencement. • No retrospective income charge: For A.Ys. 2015-16 and earlier, the statutory time for filing returns u/s 139 had already expired before the BMA came into force; such past omissions, if any, are governed exclusively by the ITA and cannot be retro-taxed under the BMA. • Limited retrospective scope for assets: The BMA’s retrospective reach is confined to assets—and only where they meet the definition of “undisclosed asset located outside India” in section 2(11) of the BMA— with taxation restricted to their value in the year they first come to the notice of the Assessing Officer under the proviso to section 3(1) of the BMA. • Harmonious interpretation: Read together, sections 3 and 4 of the BMA establish a clear temporal demarcation: the BMA’s income-side charge is wholly prospective, while its retrospective application is limited to the asset-side component for valuation purposes only. 9.1 Going over the present facts of the case, we find that in the present case, first category is the initiation of corpus as HSBC initial deposits GBP 32.5 lakh (₹ 29.72 cr) which was inherited in 2008 & 2011 from father through uncle. We note that the asset disclosed in revised returns filed for AY 2015-16 & 2016-17 on 04.12.2016 before initiation of proceedings u/s 10(1) of BMA on 13.04.2018 and the returns were processed u/s 143(1) of IT Act. Further we find that there is interest (F.Ys 2009-10 to 2013-14) for US$ 19,312 ≈ ₹ 52.77 lakh for A.Y. 2010- 11 to 2014-15 which was voluntarily disclosed to jurisdictional ITO vide letter dated 24.01.2017 seeking regularisation u/s 147 of IT Act. We note that the assessee voluntarily disclosed the same to his jurisdictional ITO (Ward 34(2), Kolkata) before issuance of notice u/s 10(1) of BMA with a request that the same be regularized through issue of notice u/s 148 of the IT Act. It is pertinent to mention here that interest & Capital Gains for later years (F.Ys 2014-15 to 2015-16) which were disclosed in revised Printed from counselvise.com BMA No.4/Kol/2025 & C.O No.71/Kol/2025 Ajay Kumar Patel 16 returns u/s 139(5) for A.Ys 2015-16 & 2016-17 on 04.12.2016 – returns were processed u/s 143(1) of ITA. We also find that credits in Bank of America (other than transfers from HSBC Bank) of US$ 19,312 ≈ ₹ 12.44 lakh and the deposits are in the nature of gifts from relatives, reversal of bank charges/other debits, repayment of loan by ADA Global and also the same are out of earlier withdrawals and the same are not in the nature of income. Going over the sections as discussed above, the legal position is hereby summarised as under: i. The object and scope of the BMA are confined exclusively to “black money” — that is, undisclosed foreign income and assets not declared under the ITA. ii. The charging provision in section 3(1) of the BMA operates prospectively from A.Y. 2016–17 onwards and the proviso confers a limited retrospective effect only in respect of undisclosed assets, not income. iii. The impugned deposits represent explained and inherited capital, being a capital receipt not chargeable to tax under the ITA. iv. The related foreign income was already disclosed in the revised returns filed u/s 139(5) of the ITA and through voluntary intimation to the jurisdictional Assessing Officer seeking regularization u/s 147 of the ITA. v. Consequently, there existed no “undisclosed foreign income or asset” within the meaning of sections 2(11), 2(12), and 4(1) of the BMA. vi. In the absence of such chargeable undisclosed income or asset, the machinery provision in section 10 of the BMA could not validly be invoked. 9.2 We further note that section 59 which came into force w.e.f. 1 July 2015, to the impugned foreign bank accounts acquired prior to that date out of income chargeable to tax in India. The finding that the BMA applies to such pre-existing and explained capital is contrary to the charging mechanism in section 3(1) read with the transitional provision in section 59 of the BMA. We further find that the BMA was enacted as a self-contained code to tax undisclosed foreign income and assets Printed from counselvise.com BMA No.4/Kol/2025 & C.O No.71/Kol/2025 Ajay Kumar Patel 17 prospectively from 1 July 2015. In this context, it would be relevant to reproduce the section 59 of the BMA as under: Section 59 states: “Any person may make … a declaration in respect of any undisclosed asset located outside India and acquired from income chargeable to tax under the Income-tax Act for any assessment year prior to the assessment year beginning on the 1st day of April, 2016.” 9.3 We find from the reading of the language of section 59 that the section is deliberate and restrictive and the section deals exclusively with undisclosed assets located outside India, not with foreign income; and it applies only where such asset has been acquired from income chargeable to tax in India prior to AY 2016-17. We further note that in the assessee’s case, the HSBC deposit was inherited capital, not chargeable under the IT Act and the Bank of America deposits were either transfers from HSBC or other non-taxable capital receipts and the income for AYs 2015-16 & 2016-17 had been duly disclosed and taxed in revised returns under IT Act and the income for AYs 2010-11 to 2014-15 pertained to a period prior to the enforcement of the BMA and could, if at all, be assessed only under the IT Act. Hence, there existed no “undisclosed asset” within the meaning of section 2(11), and the transitional declaration u/s 59 of the BMA was never required. 9.4 We further find that the Ld. CIT(A) upheld the initiation of proceedings under the BMA even though the statutory condition of the foreign assets or income being 'undisclosed\" as contained in sections 2(11) and 4(1)(c)] were not satisfied. The Assessing Officer himself having recorded in his letter dated 31-05-2018 that the Assessee had already disclosed the impugned foreign bank accounts and the related income in the revised returns for AY 2015-16 and AY 2016-17 and paid due tax thereon. We find the impugned foreign bank accounts were (i) inherited capital or capital receipts not chargeable under the ITA, and (ii) already Printed from counselvise.com BMA No.4/Kol/2025 & C.O No.71/Kol/2025 Ajay Kumar Patel 18 disclosed in the revised returns furnished u/s 139(5) of the IT Act and therefore follows that the assets and income in question cannot, by definition, be treated as “undisclosed” under the BMA. We further note that the assessee had declared the impugned foreign assets in Schedule FA of his revised returns for A.Ys. 2015-16 and 2016-17 (pages 538-568 of the PB) and offered the corresponding foreign income to tax and also voluntarily reported income for prior years through his letter dated 24- 01-2017 available at pages 501-509 to the jurisdictional ITO. We find support from the cited decision of Karnataka High Court in K. Mohammed Haris v. Income-tax Department ([2023] 147 taxmann.com 370 / 448 ITR 707), wherein it was held as under: “where an assessee discloses his foreign assets in a revised return filed within the permissible time u/s 139(5), the provisions of sections 4 and 50 of the BMA are not attracted. The High Court reasoned that the expression “undisclosed” in section 4(1)(a)/(b) of the BMA presupposes a failure to disclose even in the revised return, and that a valid disclosure u/s 139(5) of the ITA completely removes the asset from the purview of the BMA. In the words of the Court: “Once the assessee declares the foreign assets within the time allowed under section 139(5) by paying due tax, it cannot be considered that he has wilfully not declared or failed to declare his assets. To attract the provisions of sections 4 and 50, even in the revised return under section 139(5) the assessee must have failed to disclose the assets. Otherwise, proceedings under the BMA are unsustainable.” This principle is fortified by the Supreme Court’s ratio in K.P. Varghese v. ITO (131 ITR 597 (SC) – CLC pg. 93-104, where it was held that “undisclosed” or “concealed” income necessarily implies deliberate concealment; a voluntary, bona fide disclosure cannot be brought to tax under a deeming fiction meant to curb evasion.” 9.5 We further find that the assessee challenged the very validity of the notice dated 13-04-2018 issued u/s 10(1) of the BMA as it failed to specify the relevant financial year for which the assessment was proposed as required by the scheme of sections 3 and 4 of the BMA and Printed from counselvise.com BMA No.4/Kol/2025 & C.O No.71/Kol/2025 Ajay Kumar Patel 19 was issued well after the close of F.Y. 2016-17 when the Department had already becomes aware of the impugned foreign bank accounts and such a defective and belated notice vitiates the assumption of jurisdiction under the BMA. We note that the impugned Notice u/s 10(1) dated 13.04.2018 does not mention the relevant financial year or assessment year and merely refers to prior statements recorded u/s 131(1A) of the IT Act and disclosure of beneficial ownership in the impugned bank accounts, without linking such information to any chargeable year and the same was issued long after FY 2016-17, when the Department had already becomes aware of all relevant facts through statements, voluntary letters, and revised returns filed by the Assessee. We find that the summons u/s 131(1A) of the ITA dated 20.10.2016, statements were recorded, the assessee made voluntary disclosures and filed revised returns dated 04.12.2016. We also note that the notice u/s 10(1) of the BMA was issued much later on 13.04.2018, i.e., after more than one year from the close of FY 2016-17 and this inordinate delay not only demonstrates absence of contemporaneous satisfaction but also breaks the statutory nexus between the discovery of the asset and initiation of proceedings envisaged u/s 3 to 5 of the BMA. We find that there was omission to mention the relevant financial year along with the delay in initiation of proceedings which goes to the root of jurisdiction and such a defect is not curable under section 81 of the BMA, which, being pari materia with section 292B of the IT Act which protects only clerical or technical mistakes and not jurisdictional infirmities. We find support from the following case laws: i. CIT v. Kurban Hussain Ibrahimji Mithiborwala (82 ITR 821, SC) – (CLC pgs. 90-92): Held that the validity of the assessment depends on the validity of the notice; if the notice is invalid, the entire proceeding is void. ii. Kurbanhussein Ibrahimji Mithiborw Vs. CIT [1968] 68 ITR 407 (Guj) affirmed in [1971] 82 ITR 82 (SC): It was held that where a notice u/s 34 mentioned an incorrect or inconsistent assessment year, such defect rendered the notice invalid and without jurisdiction, and this invalidity Printed from counselvise.com BMA No.4/Kol/2025 & C.O No.71/Kol/2025 Ajay Kumar Patel 20 could not be waived or cured even if the assessee subsequently filed a return in response to the defective notice iii. Nyalchand Malukchand Dagli v. CIT [1996] 62 ITR 102 (Guj): Held that a notice issued u/s 34(1) of the 1922 Act must clearly and specifically mention the assessment year sought to be reopened; failure to specify the particular year renders the notice invalid and without jurisdiction. iv. CIT v. Norton Motors (2005) 146 Taxman 701 (P&H): Held that section 292B can be invoked only to cure technical defects or omissions in a notice or proceeding; however, where such notice or proceeding suffers from an inherent lacuna affecting jurisdiction, the same cannot be validated by resort to section 292B. v. SSS Projects Ltd. V. DCIT [2021] 129 taxmann.com 378 (Karnataka): Held that where Assessing Officer taking into account fact that assessee made default in payment of tax in respect of assessment year 2007-08, held assessee to be in default and levied penalty under section 221, in respect of assessment year 2008-09 in which assessee had paid tax, such mistake could not be covered under section 292B. vi. PCIT V. Tata Sons Ltd. (2019) 110 taxmann.com 115 (Bom): Held that where Assessing Officer issued notice under section 148 without recording reasons for same, it was not a mere case of clerical error, but substantial condition for valid issue of reopening notice had not been fulfilled and, such a defect could not be cured by invoking provisions of section 292B. 9.6 Going over the discussion made above as well as considering the facts, the following facts have been emerged with date which is essential to reproduce hereinbelow: Event Date / Period Summons u/s 131(1A) issued by DDIT(Inv.), Vadodara 20.10.2016 Statements recorded under oath 24.10.2016, 05.12.2016, 14.02.2017 Revised returns filed (A.Ys. 2015–16, 2016–17) 04.12.2016 Written replies filed in response to various summons u/s 131(1A) issued by the DDIT(Inv), Vadodara 13.01.2017, 25.01.2017 and 16.02.2017 Voluntary disclosure before ITO, Ward 34(2), Kolkata 24.01.2017 End of F.Y. 2016–17 31.03.2017 Printed from counselvise.com BMA No.4/Kol/2025 & C.O No.71/Kol/2025 Ajay Kumar Patel 21 Event Date / Period Authorisation of ADIT(Inv.), Unit-3(4), Kolkata 28.03.2018 Notice u/s 10(1) issued under BMA 13.04.2018 9.7 We find that the assessee challenged the erroneous mention of the year of chargeability as A.Y. 2019-20, contrary to the express language and intent of the proviso to section 3(1) of the BMA. We note that the impugned foreign bank accounts did not constitute “undisclosed assets,” as assets had already come to the notice of the Department during F.Y. 2016–17, and therefore, A.Y. 2017–18 would be the only possible year of chargeability and the ld. CIT(A) wrongly upheld the assessment of the impugned foreign bank accounts in A.Y. 2019-20 under the proviso to section 3(1) of the BMA even though the asset had already come to the notice of the Department during F.Y. 2016-17 during investigation-stage when summons were issued and assessee filed statements, voluntary disclosure letters and its reporting in the revised returns dated 04.12.2016 for A.Ys 2015-16 and 2016-17, all of which occurred in FY 2016-17. The subsequent administrative authorisation of the ADIT as A.O, in March 2018 could not defer the year of chargeability fixed by the proviso, which, if at all, was A.Y. 2017-18 (FY 2016-17) and not A.Y 2019-20. 9.8 We further find that the Ld. CIT(A) sustained the addition of Rs. 52,77,108/- (Rs. 26,38,554/- in the Assessee’s share) representing historic interest for FY 2009-10 to 2013-14 on inherited deposits, even though such sums were not an ‘undisclosed foreign asset’ but constituted income of earlier years outside the charging ambit of the BMA and the Ld. CIT(A) did not consider the fact that any historic income accruing in years prior to coming into force of the BMA on 01-07- 2015, such as the interest on inherited funds was assessable, only under Printed from counselvise.com BMA No.4/Kol/2025 & C.O No.71/Kol/2025 Ajay Kumar Patel 22 the then-existing provisions of the IT Act (e.g. sections 147 to 149) and could not be brought to tax under the BMA. We note that the impugned addition of ₹ 52.77 lakhs represents interest income earned between F.Ys. 2009-10 and 2013-14 on inherited capital held in the HSBC (Jersey) account and the initial corpus was derived from inheritance and was therefore non-taxable under the IT Act. We find that the assessee voluntarily disclosed this foreign interest in his letters dated 24.01.2017 & 07.03.2017 to the jurisdictional ITO, Ward 34(2), Kolkata, specifically requesting that the relevant earlier years be reopened u/s 147 of the ITA so that the income could be taxed in the correct manner but the Department, however, did not act upon that disclosure but instead sought to tax the same amount under the BMA for A.Y. 2019-20 which is contrary to the legislative intent of the Act. The Hon’ble Gujarat High Court in PCIT (Central) v. Income Tax Settlement Commission & Anr. ([2019] 111 taxmann.com 176/[2020] 420 ITR 149) has comprehensively examined the temporal and jurisdictional interface between the BMA and the ITA, and has drawn a clear and authoritative distinction between the BMA’s treatment of undisclosed foreign income and undisclosed foreign assets, wherein it was held as under: (i) At paragraph 14, the Hon’ble Court drew a clear distinction between undisclosed foreign income and undisclosed foreign asset, holding as under: “While in case of undisclosed foreign income of an assessee, the same would be subject to tax under the provisions of the Black Money Act only for every assessment year commencing on or after 1-4-2016, namely assessment year 2016-17 onwards, insofar as undisclosed foreign asset located outside India is concerned, the previous year in which such asset is acquired is not relevant. In other words, an undisclosed foreign asset would be subject to tax under the Black Money Act notwithstanding the date of its acquisition, which may even be a previous year prior to the assessment year commencing on 1-4- 2016; and shall be charged to tax under this provision on the value of such asset in the previous year in which such asset comes to the notice of the Assessing Officer.” (para 14) (ii) Further, at paragraph 17, the Court reaffirmed that while undisclosed foreign income becomes chargeable only prospectively from A.Y. 2016- Printed from counselvise.com BMA No.4/Kol/2025 & C.O No.71/Kol/2025 Ajay Kumar Patel 23 17, undisclosed foreign assets may relate to prior periods, subject to being brought to tax on discovery: “On a conjoint reading of section 3 and section 2(9) of the Black Money Act, one thing is clear namely that undisclosed foreign income or asset become chargeable to tax from assessment year 2016-17. However, insofar as undisclosed foreign asset is concerned, while it becomes chargeable to tax from assessment year 2016-17 onwards, the date of acquisition of such asset may relate to any assessment year prior to assessment year 2016-17. Therefore, even after the coming into force of the Black Money Act, insofar as assessment years prior to assessment year 2016-17 are concerned, the undisclosed foreign income would be chargeable to tax under the relevant provisions of the Income-tax Act.” (para 17) (iii) The Hon’ble Court also clarified that section 59 of the BMA is merely enabling and that failure to file a declaration within the one-time window does not create a default under the Act, but only forfeits the benefit of voluntary disclosure: “Section 59 of the Black Money Act enables a person to disclose assets covered by the said Act. If a person fails to take the benefit of section 59, the penal provisions of the Black Money Act would come into play. However, by not disclosing his undisclosed foreign asset which is covered by the Black Money Act, the person does not commit any default under section 59 of that Act, but merely does not avail of the benefit given thereunder.” (para 27) (iv) The Gujarat High Court then underscored that the ITA already contains machinery provisions to deal with undisclosed foreign income, including reopening beyond four years for such cases u/s 147 and 149(1)(c): “There are several provisions under the Income-tax Act, 1961, which cover assessment of undisclosed foreign income.” (para 35) “The second proviso to section 147 of the Income-tax Act, 1961, provides that nothing contained in the first proviso shall apply in a case where any income in relation to any asset (including financial interest in any entity) located outside India has escaped assessment for any assessment year... Thus, the second proviso does away with the limitation of four years in case of undisclosed foreign income.” ( para 36) “Section 149(1)(c) of the Income-tax Act provides that no notice under section 148 shall be issued after sixteen years where income in relation to any asset located outside India has escaped assessment... Clearly, therefore, the scheme of the Income-tax Act, 1961, is not meant to tax only disclosed foreign income but also undisclosed foreign income.” (para 37)” Printed from counselvise.com BMA No.4/Kol/2025 & C.O No.71/Kol/2025 Ajay Kumar Patel 24 9.9 Going over the discussion made above, and considering the judicial precedents, we find that the impugned interest income of ₹52.77 lakh (₹26.38 lakh in the Assessee’s share) for F.Ys. 2009–10 to 2013–14 falls squarely within the pre-2016 period to which the BMA’s income- charge does not apply and the same is not part of any “undisclosed asset” u/s 2(11), the corpus being inherited and fully explained and could have been dealt with under the reopening framework of the ITA including section 149(1)(c), which specifically covers foreign income and foreign assets up to sixteen years. Therefore, we after considering the aforementioned decision of the Gujarat High Court find that the BMA cannot be invoked to retrospectively tax historic income of earlier years that was voluntarily disclosed and is separately assessable under the IT Act. We note that the inherited corpus in the HSBC (Jersey) account is an explained, non-taxable capital receipt and the interest income for A.Ys. 2009-10 to 2014-15 arose from that explained source and was voluntarily disclosed for assessment under the IT Act. Section 3(1) limits the BMA’s income-charge to A.Y. 2016-17 onwards and there is no retrospective hook for income of earlier years and section 4(1)(a)/(b) of the BMA address only post-2015 income non-disclosure. Section 4(1)(c) and section 72(c) apply solely to assets of unexplained origin. We consequently hold the addition of ₹ 52.77 lakhs (₹26.38 lakh in the Assessee’s share) under the BMA is without authority of law and liable to be deleted. 10 In view of the discussion made above and considering the various judicial precedents, we allow the cross-objection of the assessee. 11. Since, we have allowed the cross-objection of the assessee on legal grounds, therefore, the appeal of the revenue becomes infructuous and is dismissed. Printed from counselvise.com BMA No.4/Kol/2025 & C.O No.71/Kol/2025 Ajay Kumar Patel 25 12. In the result, the appeal of the revenue is dismissed and the C.O. of the assessee is allowed. Kolkata, the 20th January, 2026. Sd/- Sd/- [Rajesh Kumar] [Pradip Kumar Choubey] Accountant Member Judicial Member Dated: 20.01.2026. RS Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3. CIT(A)- 4. CIT- , 5. CIT(DR), //True copy// By order Assistant Registrar, Kolkata Benches Printed from counselvise.com "