DAVENDER KUMAR MEHTA,JODHPUR V. DEPUTY DIRECTOR OF INCOME TAX, INVESTIGATIO,FAIU,JAIPUR, JAIPUR

BMA 1/JPR/2025

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Devendra Kumar Mehta, the appellant, was penalized by the Assessing Officer for not disclosing foreign income received from the Social Security Administration, USA, in his income tax return for the assessment year 2015-16. The penalty of Rs. 10,00,000 was sustained by the Learned CIT(A). However, the Tribunal found that the appellant had indeed disclosed the income and paid taxes on it in the USA, thus setting aside the penalty. The case revolved around the interpretation of Section 43 of the Black Money Act, 2015, and the obligations of the taxpayer under the India-US Double Taxation Avoidance Treaty.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712369 (ITAT-JAIPUR)
• Appeal Type: Black Money Appeal
• Pronouncement Date: 30-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2015-2016
• Laws Referred To: Black Money (Undisclosed Foreign Income & Assets) and Imposition of Tax Act, 2015, Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANITA RINES H; .
• Assessee Lawyers: AMIT KOTHARI; THROUGH V.C
• Keywords: Set aside; Residential status
• Section: 131

Judgement Text

" vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A-Bench” JAIPUR Jh xxu xks;y] ys[kk lnL; ,oa Jh ujsUnz dqekj] U;kf;d lnL; ds le{k BEFORE: SHRI GAGAN GOYAL, AM & SHRI NARINDER KUMAR, JM BMA No. 1/JPR/2025 fu/kZkj.k o\"kZ@Assessment Year : 2015-16 Devendra Kumar Mehta 440, 3rd, C Road, Sardarpura, Jodhpur. cuke Vs. DDIT, Investigation FAIU, Jaipur. LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.:ACCPM0475D vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assessee by : Shri Amit Kothari, C.A. (through V.C.) jktLo dh vksjls@Revenue by: Mrs. Anita Rinesh, JCIT-Sr.-DR lquokbZ dh rkjh[k@Date of Hearing : 28/07/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: 30/07/2025 vkns'k@ORDER Per: NARINDER KUMAR, JUDICIAL MEMBER . Appellant-assessee, an individual, declared his residential status at ‘Resident’ in the return of income tax for the assessment year 2015-16. He is before this Appellate Tribunal, feeling aggrieved by order dated 20.03.2025, passed by Learned CIT(A), jaipur-4, whereby penalty order dated 29.05.2024, passed by the Assessing Officer, imposing penalty of Printed from counselvise.com 2 BMA No. 1/JPR/2025 Devendra Kumar Mehta, Jodhpur. Rs. 10,00,000/- u/s 43 r.w.s. 46 of the Black Money (Undisclosed Foreign Income & Assets) and Imposition of Tax Act, 2015, has been sustained, and his appeal stands dismissed. 2. Arguments heard. File perused. 3. Penalty order dated 29.05.2024 was passed on the ground that the assessee-appellant, while furnishing return of income for the assessment year 2015-16 did not disclose in FA schedule, foreign income to the tune of Rs. 10,00,000/- received by him from social security administration (United States). 4. As per case of the department, in order to open an enquiry on the above aspect, permission was obtained on 19.09.2022 and then summons were issued to the assessee u/s 131 of the Act of Income Tax Act (in short “the Act”), whereupon he submitted his reply. 5. On completion of enquiry, the Assessing Officer found that the assessee had committed default within the meaning of Section 43 of Black money Act, 2015, in respect of the above said income, by not disclosing the same in schedule FA of return of income. 6. From para 7 of the penalty order, it transpires that in response to the show cause notice dated 17.04.2024, the assessee put forth the following version vide letter dated 23.04.2024,:- Printed from counselvise.com 3 BMA No. 1/JPR/2025 Devendra Kumar Mehta, Jodhpur. \"1. I had received Social Security amount of Rs. 8,22,783 during Financial Year 2014-15 (AY 2015-16) from Social Security Administration (United States) in my Indian bank saving account number 51006338397. In this regard, I would like to bring to your notice the \"India US Double Taxation Avoidance Treaty\" notification no. G.S.R.990(E) dated 20.12. 1990 relating to Convention between the Government of the United States of America and the Government of the Republic of India for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, As per article 20 of the aforesaid convention, Social Security benefits and other public pensions paid by the Contracting State to a resident of the other Contracting State or a citizen of the United States shall be taxable only in the first mentioned state, It means the Social Security amount will be taxed only in the paying state. The amount of Social Security received is in the nature of pension and it is received after deducting tax @ 30% (copy enclosed) from Social Security Administration, United States, hence, the amount so received is not taxable in India. 2. Further, I don't have any Financial Assets Outside India, therefore no information has been reported in Schedule FA of Income Tax Return for the AY 2015-16. you are hereby requested to drop the proceedings and oblige.\" 7. As is available from the observations made by the Assessing Officer in the penalty order, particularly in para 8, the assessee- Resident, did not disclose the above said foreign income in his return of income, especially in FA schedule. Main thrust of the Assessing Officer was on the aspect of non disclosure of the above said amount/foreign income in schedule FA. Printed from counselvise.com 4 BMA No. 1/JPR/2025 Devendra Kumar Mehta, Jodhpur. 8. While dismissing the appeal, Learned CIT(A) upheld the penalty order, while observing that the appellant had not said anything regarding non disclosure of the above said foreign income in schedule FA of the return of income. 9. Ld. AR for the appellant has referred to the provisions of section 43 of Black Money Act, 2015 and submitted that this is not a case where, the assessee can be said to have any asset outside India. Another submission by ld. AR for the appellant-assessee is that the amount was received from social security administration (United States). He has also submitted that in his return of income, the assessee disclosed the details of the amount received from social security administration, in his return of income, and that in the given situation, penalty order deserves to set aside. In support of submission, Ld. AR for the appellant has referred to page 15 and 16 of the paper book presented on 21.07.2025, wherein under column “details of exempted income”, while furnishing computation of the total income for the concerned assessment year 2015-16, he depicted payment of tax of Rs. 5,93,882/- on the above said amount received from United States. Printed from counselvise.com 5 BMA No. 1/JPR/2025 Devendra Kumar Mehta, Jodhpur. 10. Faced with the above said declaration regarding payment of tax at Rs. 5,93,882/-, on the aforesaid amount received from social security administration (USA), by way of pension, Ld. DR for the department has said not much except that the requisite information was made available by the appellant, in the computation of total income, this Appellate Tribunal may dispose of the appeal, taking into consideration this fact. 11. Even if under section 43 of the Black Money Act, requisite information is required to be furnished in FA schedule of return of income, having regard to the fact that the department has not opposed the claim of the appellant that the said amount was towards his pension, and that he had disclosed in the details of income, the factum of deposit of tax with the concerned department of United States, we find merit in the contention raised by Ld. AR for the appellant that in this situation, no penalty u/s 43 of the Black Money Act, was called for to be imposed. Consequently, impugned order passed by Learned CIT(A) and the penalty order passed by the Assessing Officer deserve to be set aside. Result 12. In view of the above discussion and findings, this appeal is allowed and the impugned order passed by Learned CIT(A) and the penalty order passed by the Assessing Officer, are hereby set aside. Printed from counselvise.com 6 BMA No. 1/JPR/2025 Devendra Kumar Mehta, Jodhpur. File be consigned to the record room after the needful is done by the office. Order pronounced in the open court on 30/07/2025. Sd/- Sd/- ¼xxu xks;y½ ¼ujsUnz dqekj½ (GAGAN GOYAL) (NARINDER KUMAR) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 30/07/2025 *Santosh vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Devendra Kumar Mehta, Jodhpur. 2. izR;FkhZ@ The Respondent- DDIT, Investigation FAIU, Jaipur. 3. vk;dj vk;qDr@ The ld CIT 4. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 5. xkMZ QkbZy@ Guard File BMA No.1/JPR/2025) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asstt. Registrar Printed from counselvise.com "