MR. SADANAND B. SULE,MUMBAI V. DDIT (INV.) 6(1), MUMBAI

BMA 4/MUM/2023

AI Insights

The case involves four appeals by the assessee, Mr. Sadanand Bhalchandra Sule, against the penalties imposed for non-disclosure of foreign assets under the Black Money Act for the assessment years 2016-17 to 2019-20. The penalties were initially upheld by the Commissioner of Income Tax (Appeals). The primary legal contention was whether the Dy. Director of Income Tax (Inv.), Unit-6(1), Mumbai had the jurisdiction to impose these penalties, given the specific guidelines and the Act's provisions which seemed to restrict such powers to the regular Assessing Officer, especially when the penalty amount exceeded Rs. 5 lakhs.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 786032 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s)
• Appeal Type: Black Money Appeal
• Pronouncement Date: 29-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2016-2017
• Appeal Filed On: 29-03-2023
• Other Referred Cases: National Thermal Power Corporation vs. CIT [229 ITR 383] (SC), Jute Corporation of India Ltd. vs. CIT [187 ITR 688] (SC), Ahmedabad Electricity Co. Ltd. vs. CIT [199 ITR 351 (Bom) (FB)], CIT vs. Smt. Nayana P. Dedhia [2004] 14 TAXMAN 603 (AP), UCO Bank vs. CIT [1988] 237 ITR 889, ACIT vs. M/s. Serajuddin & Co. (in ITA Nos. 39-45 of 2022 dt. 15-03-2023)
• Laws Referred To: Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APPELLANT; SUSHMA NAGARAJ; SPL. COUNSEL
• Assessee Lawyers: VIJAY MEHTA
• Keywords: Set aside; Opportunity of being heard; Competent authority; Double taxation relief; Right to appeal
• Section: 10

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “E” BENCH : MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI RAJ KUMAR CHAUHAN, JUDICIAL MEMBER B.M.A. No. A.Y. Appellant Respondent 4/Mum/2023 2016-17 Mr. Sadanand Bhalchandra Sule, Bunglow No.2, 1st Floor, Silver Oak Estate, Bhulabhai Desai Road, Breach Candy, Mumbai-400026. PAN: AAQPS3639B Dy. Director of Income Tax (Inv.)-6(1), Scindia House, Ballard Estate, Mumbai-400038. 5/Mum/2023 2017-18 6/Mum/2023 2018-19 7/Mum/2023 2019-20 Assessee by : Shri Vijay Mehta, Revenue by : Ms. Sushma Nagaraj, Spl. Counsel Ms. Shreya Singhi Date of Hearing : 01-08-2025 Date of Pronouncement : 29-10-2025 O R D E R PER BENCH : These are four appeals filed by the assessee against the respective orders of the Learned Commissioner of Income Tax (Appeals)-51, Mumbai [„Ld.CIT(A)‟], dated 03-02-2023, pertaining the assessment years (AYs) 2016-17, 2017-18, 2018-19 and 2019-20, wherein the assessee has taken the following grounds of appeal: Printed from counselvise.com 2 BMA Nos. 4, 5, 6 & 7/Mum/2023 BMA No. 4/Mum/2023; AY.2016-17 “1. The learned CIT (A) erred in upholding the penalty order passed by Ld. DDIT (Inv.) u/s 43 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 ('BMA') levying penalty of Rs. 10,00,000/- 2. The learned CIT(A) has erred in not deleting penalty of Rs. 10,00,000/- levied by the Ld. DDIT (Inv.). 3. The appellant craves leave to add, alter, amend, substitute and/or modify, withdraw all or any of the foregoing grounds of appeal.” BMA No. 5/Mum/2023; AY.2017-18 “1. The learned CIT (A) erred in upholding the penalty order passed by Ld. DDIT (Inv.) u/s 43 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (BMA) levying penalty of Rs. 10,00,000/- 2. The learned CIT (A) ought to have held that the penalty order passed by the Ld. DDIT (Inv.) in contravention of the provisions of the BMA Act and CBDT Circular/Instructions is invalid and bad in law. 3. The learned CIT(A) has erred in not deleting penalty of Rs. 10,00,000/- levied by the Ld. DDIT (Inv.). 4 The appellant craves leave to add, alter, amend, substitute and/or modify, withdraw all or any of the foregoing grounds of appeal.” BMA No. 6/Mum/2023; AY.2018-19 “1. The learned CIT (A) erred in upholding the penalty order passed by Ld. DDIT (Inv.) u/s 43 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 ('BMA') levying penalty of Rs. 10,00,000/- 2. The learned CIT (A) ought to have held that the penalty order passed by the Ld. DDIT (Inv.) in contravention of the provisions of the BMA Act and CBDT Circular/Instructions is invalid and bad in law. 3. The learned CIT(A) has erred in not deleting penalty of Rs. 10,00,000/- levied by the Ld. DDIT (Inv.). 4. The appellant craves leave to add, alter, amend, substitute and/or modify, withdraw all or any of the foregoing grounds of appeal.” BMA No. 7/Mum/2023; AY.2019-20 “1. The learned CIT (A) erred in upholding the penalty order passed by Ld. DDIT (Inv.) u/s 43 of the Black Money (Undisclosed Foreign Income and Assets) and imposition of Tax Act, 2015 ('BMA') levying penalty of Rs. 10,00,000/-. 2. The learned CIT (A) ought to have held that the penalty order passed by the Ld. DDIT (Inv.) in contravention of the provisions of the BMA Act and CBDT Circular/Instructions is invalid and bad in law. Printed from counselvise.com 3 BMA Nos. 4, 5, 6 & 7/Mum/2023 3. The learned CIT(A) has erred in not deleting penalty of Rs. 10,00,000/- levied by the Ld. DDIT (Inv.). 4 The appellant craves leave to add, alter, amend, substitute and/or modify, withdraw all or any of the foregoing grounds of appeal.” 2. In addition to the aforesaid grounds of appeal, the assessee has also moved a separate prayer for admission of an additional ground of appeal in each of the four assessment years under consideration. The additional ground so sought to be raised is common in all these appeals and the same reads as under: “The Ld. CIT(A) has erred in upholding the penalty order u/s 43 of the Black Money Act, 2015 without appreciating that the penalty order passed by the DDIT (Inv.), Unit 6(1), Mumbai is illegal and bad in law as the DDIT (Inv.), Unit 6(1) had not acquired the jurisdiction as per law. The appellant craves leave to add, alter and/or modify or withdraw the foregoing ground of appeal.” 3. It was submitted by the Learned counsel for the assessee that the additional ground of appeal so sought to be raised is purely legal in nature and does not require any new facts to be brought on record and it was submitted that the same may be admitted for necessary adjudication and in support, reliance was placed on the following decisions: i. National Thermal Power Corporation vs. CIT [229 ITR 383] (SC); ii. Jute Corporation of India Ltd. vs. CIT [187 ITR 688] (SC); iii. Ahmedabad Electricity Co. Ltd. vs. CIT [199 ITR 351 (Bom) (FB)] 4. In this regard, our reference was drawn to the penalty order passed by the DDIT(Inv.)-6(1), Mumbai, dt. 04-12-2021, pertaining to AY. 2016-17. It was submitted that consequent to the order passed by the Pr.DIT(Inv.)-(2), Mumbai, vide order dt. 16-09-2020, granting concurrent jurisdiction to DDIT(Inv.)-6(1), Mumbai under the Black Money (Undisclosed Foreign Income & Assets) and Imposition of Tax Act, 2015 (hereinafter referred to as “Black Money Act”), the DDIT(Inv.)-6(1), Mumbai assumes jurisdiction Printed from counselvise.com 4 BMA Nos. 4, 5, 6 & 7/Mum/2023 and thereafter, issued notices u/s. 8(1) of the Black Money Act, which was responded to by the assessee vide letters dt. 30-09-2020 and 09-10-2020 and thereafter, a show cause was issued to the assessee as to why penalty of Rs. 10 lakhs should not be levied in his case in accordance with Section 43 of the Black Money (Undisclosed Foreign Income & Assets) and Imposition of Tax Act, 2015 for the AY. 2016-17 for not disclosing his beneficial ownership of the foreign asset i.e., shareholding in Manquist Holdings Pte. Ltd. (Singapore Entity) and M/s. Aavishkar International Ltd. (Singapore Entity) in Schedule FA of his return of income filed for the AY. 2016-17. In response to the show cause, the assessee filed his submissions dt. 25-02-2021. However, not finding the submissions acceptable, the DDIT(Inv.)-6(1), Mumbai passed the penalty order, stating that it is a fit case for levy of penalty of Rs. 10 lakhs for non-disclosure of foreign assets in Schedule FA of return of income for the AY. 2016-17 and the said order was passed after obtaining prior approval of the Addl. Director(Inv. Unit)-6, Mumbai, dt. 03-12-2021 and a copy of the said order was marked to the jurisdictional AO i.e., ACIT/DCIT, Circle-19(3), Mumbai for information that the proceedings u/s. 43 of the Black Money Act have been completed and for further necessary and follow-up action. 5. It was submitted that on appeal, the penalty has been confirmed by the Ld.CIT(A) and against the said order, the assessee is in appeal before us. 6. In this regard, it was submitted that there is no dispute that the concurrent jurisdictional order has been passed by the Pr.DIT(Inv.)-2, vide order dt. 16-09-2020, granting concurrent jurisdiction to the DDIT(Inv.)- 6(1), Mumbai. At the same time, it was submitted that prior to issuance of the said order, the Central Board of Direct Taxes (CBDT) has come out Printed from counselvise.com 5 BMA Nos. 4, 5, 6 & 7/Mum/2023 with guidelines for handling of cases under the Black Money (Undisclosed Foreign Income & Assets) and Imposition of Tax Act, 2015 vide F.No. 414/134/2015-IT(Inv.I) (Pt.), dt.23-01-2018, wherein it has been provided that the guidelines are effective from 1st February, 2018 and the same may be brought to the notice of all officers immediately for necessary action and compliance and the said guidelines were issued with the approval of Member, Investigation, CBDT. It was submitted that the said guidelines refers to the earlier Notification No. 39/2017, dt. 16-05-2017 issued by the CBDT authorizing DDIT(Inv.)/Pr.DIT(Inv.) to assign concurrent jurisdiction of the AO to DDIT(Inv.)/ADIT(Inv.) concerned for exercising the powers and functions of the AO under the Black Money Act. It was submitted that as stated in the guidelines, in order to achieve the intended objectives and to have streamline action under the Black Money Act, the CBDT had come out with the guidelines with reference to the processes and timelines effective from 01-02-2018 and our reference was drawn to the said guidelines and the relevant part thereof reads as under: “3.Concurrent jurisdiction only for the purposes of the BM Act: The aforesaid Notification in respect of concurrent jurisdiction of DDIT (Inv.)/ADIT(Inv.) to exercise the powers and functions of AO is only for the purposes of the BM Act ie. only to the extent of issues pertaining to undisclosed foreign asset/income of a person and it does not cover issues under the Income-tax Act, 1961. The issues under the Income-tax Act shall continue to be dealt-with as per the existing provisions and the guidelines. 4.Concurrent jurisdiction only to DDIT (Inv.)/ADIT(Inv.) investigating an undisclosed foreign asset/income case: In pursuance of the aforesaid Notification of the CBDT, concurrent jurisdiction of AO is to be assigned only to that particular DDIT(Inv.)/ADIT(Inv.) who is investigating issues pertaining to undisclosed foreign asset/income of a person. Therefore, the competent authority [DGIT(Inv.)/ Pr.DIT(Inv.)] is required to pass the order assigning concurrent jurisdiction of AO to specific DDIT(Inv.)/ADIT(Inv.) in the specific case. No general order is intended to be passed. The stage at which the order assigning concurrent jurisdiction may be issued has been indicated in subsequent paragraphs. 5.The above Notification to apply prospectively: Concurrent jurisdiction of AO is to be assigned to DDIT(Inv.)/ADIT(Inv.) concerned in only those cases of Printed from counselvise.com 6 BMA Nos. 4, 5, 6 & 7/Mum/2023 undisclosed foreign asset/income where investigation report on undisclosed foreign income/asset has not been sent by the Investigation Directorate to the regular AO on the date from which these Guidelines are applicable, It is also clarified that where the investigation report (whether interim or final) in a case has been sent to the regular AO OR the regular AO has already initiated the assessment proceedings under the BM Act in a case, the regular AO would continue to proceed and complete assessment and other proceedings in that case under the BM Act, and DDIT(Inv.)/ADIT(Inv.) concerned is not to be assigned concurrent jurisdiction of AO in such cases. 6.When a proceeding under section 10 of the BM Act could be initiated: A combined reading of the provisions of section 3 (Charge of tax) and section 10 (Assessment) of the BM Act suggests that AO could initiate the proceedings under section 10 of the BM Act on receipt of information of prima facie undisclosed foreign income/asset. 7.Stage of assigning concurrent jurisdiction of AO to DDIT(Inv.)/ADIT (Inv.) concerned by DGTT(Inv.)/Pr.DIT(Inv.): Where the conditions of para 6 above are satisfied and elther notice under section 10(1) is to be issued or inquiry under section 8 of the BM Act is to be Initiated, DGIT(Inv.)/Pr.DIT(Inv.) concerned is required to assign concurrent jurisdiction of AO to DDIT(Inv.)/ADIT(Inv.) concerned in accordance with these guidelines, before issuance of the notice or initiation of the inquiry, as the case may be, Further, pursuant to assignment of concurrent Jurisdiction of AO to DDIT(Inv.)/ADIT(Inv.) concerned, AO and DDIT(Inv.)/ADIT(Inv.) would be the same officer and therefore, for the purposes of section 10 of the BM Act, date of assigning concurrent jurisdiction of AO to DDIT(Inv.)/ADIT(Inv.) concerned by the respective DGIT(Inv.)/Pr.DIT(Inv.) would be the date of receipt of the information by AO or date of coming of the information to AO's notice. This date is relevant for operation of several provisions of the BM Act. 8.Time limit for issuance of notice under section 10(1) of the BM Act: Though no statutory time limit for issuance of notice under section 10(1) is specified under the BM Act, wherever the conditions of para 6(a) to 6(c) above in respect of issuance of notice under section 10(1) are satisfied, AO is required to issue the notice preferably within 30 days from the end of the previous year in which such information was received by him/ came to his notice. However, if the notice is not issued within the period of 30 days, reason thereof is to be recorded in writing by AO concerned, to be duly approved by Pr.DIT/Pr.CIT concerned. It is important to note that as per section 11(1) of the BM Act, the assessment under the BM Act is to be passed within 2 years from the end of the financial year in which notice under section 10(1) was issued by the AO. 9.Stage of sharing information with ED (Enforcement Directorate) for action under PMLA: Section 88 of the BM Act has included the offence of willful attempt to evade any tax, penalty or interest referred to in section 51 of the BM Act as a Scheduled Offence for the purposes of PMLA which may lead to separate action under PMLA in appropriate cases, besides action under the Printed from counselvise.com 7 BMA Nos. 4, 5, 6 & 7/Mum/2023 BM Act, Section 55 requires that prosecution complaint under the BM Act would be filed only with prior sanction of Pr.CIT/CIT [which includes Pr.DIT(Inv.)/DIT(Inv.) as per section 2(15) of the BM Act r.w.s. 2(16) of the Income-tax Act]. In this context, where, pursuant to the information in his possession leading to issuance of notice under section 10(1) of the BM Act, the AO is of the opinion that the ingredients of section 51 are prima facie satisfied, he is to submit a note to Pr.DIT/Pr.CIT concerned, through proper channel, clearly bringing out relevant facts and evidence for such prima facie satisfaction w.r.t. all the ingredients of section 51 of the BM Act. Thereafter, taking into consideration relevant aspects and available evidence, if Pr.DIT/Pr.CIT concerned is also of the opinion, to be recorded in writing, that all the ingredients of section 51 of the BM Act are prima facie satisfied in the case, Pr.DIT/Pr.CIT concerned would share relevant facts and evidence, to the extent permissible under law which include relevant provisions of DTAA/TIEA/Other Legal Instruments, with ED to enable them take appropriate action under PMLA at the earliest possible. It may, however, be noted that there is difference between the 'opinion of prima facie satisfaction w.r.t. ingredients of section 51' and 'sanction under section 55 for prosecution' and the latter requires higher degree of satisfaction. Further, Pr.DIT/Pr.CIT concerned, inter alia, through monthly review of such cases should ensure that such facts and evidence are brought to his/her notice at the earliest possible so that relevant information could be shared with ED at the earliest possible. 15.Stage of sending the case records to regular AO for further action: DDIT(Inv.)/ADIT(Inv.) handling the case of an undisclosed foreign asset/income in the capacity of AO would sent the case to its regular AO after completion of assessment and filing of prosecution complaint for the offences under the BM Act, more particularly of willful attempt to evade tax, etc. under section 51(1) of the BM Act OR after recording a clear finding in the file with approval of Pr.DIT (Inv.) concerned that it was not found to be a fit case for filing prosecution complaint for the offences under the BM Act. Further proceedings including pertaining to penalties under the BM Act, follow up of the prosecutions filed, recovery, appeals and other actions under the BM Act would be expeditiously handled by the regular AO, and DDIT(Inv.)/ADIT(Inv.) concerned would not exercise the powers and functions of AO in respect of such further proceedings. It is also clarified that where DDIT(Inv.)/ADIT(Inv.) is investigating a case involving undisclosed foreign income/asset, the regular AO would not exercise the powers and functions of AO w.r.t. assessment and prosecution for the offences under the BM Act. The DDIT(Inv.)/ADIT(Inv.) concerned would send the case to regular AO along with relevant case records within 30 days of completion of the last envisaged action. While sending, important issues to be followed up should be clearly indicated. Further actions in respect of that case under the BM Act would be taken by the regular AO. 16.Penalty under the BM Act: The ADIT(Inv)/DDIT(Inv) in the capacity of AO may initiate and pass necessary penalty order wherever approval of JCIT is not required. After passing the penalty order the same should be sent to the regular AO for the purposes of demand notice etc, entering the particulars in Printed from counselvise.com 8 BMA Nos. 4, 5, 6 & 7/Mum/2023 relevant registers, recovery and other follow up actions. Wherever required, the regular AO should initiate penalty proceedings under the BM Act (particularly under section 41 of the BM Act) immediately on receipt of the assessment order and relevant records and pass necessary orders, at the earliest possible, without waiting for disposal of appeals, etc.” 7. It was submitted that though the concurrent jurisdiction has been provided to the DDIT(Inv.)-6(1), Mumbai, however, as far as the levy of penalty under the Black Money Act is concerned, as per paragraph Nos. 15 and 16 of the said guidelines, the DDIT(Inv.)-6(1), Mumbai has to transfer the case to the regular AO for the purposes of passing the penalty orders. Since the penalty involved is more than Rs. 5 lakhs and requires approval of the JCIT, it was submitted that the DDIT(Inv.)-6(1), Mumbai has no jurisdiction to pass the penalty order as per the CBDT circular, which is binding on the Revenue authorities. In support, reliance was placed on the decision of the Hon‟ble Andhra Pradesh High Court in the case of CIT vs. Smt. Nayana P. Dedhia [2004] 14 TAXMAN 603 (AP), which has followed the proposition laid down by the Hon‟ble Supreme Court in the case of UCO Bank vs. CIT [1988] 237 ITR 889 and the decision of the Hon‟ble Orissa High Court in the case of ACIT vs. M/s. Serajuddin & Co. (in ITA Nos. 39-45 of 2022 dt. 15-03-2023). It was accordingly submitted that all these facts are already on record and, therefore, no new facts are required to be brought on record to decide the additional grounds of appeal so taken by the assessee. It was submitted that since there is a clear non- compliance to the CBDT guidelines/Circular dt 23-01-2018 as per which the DDIT(Inv.)-6(1), Mumbai cannot pass the penalty order, the order so passed by him therefore, deserves to be set aside. 8. The Ld. Standing Counsel for the Revenue has been heard at length and she has also filed detailed written submissions which contain the contentions so raised which have been considered and taken on record. Printed from counselvise.com 9 BMA Nos. 4, 5, 6 & 7/Mum/2023 We deemed it appropriate to reproduce the written submission so filed in verbatim which read as under: “A. DDIT (Inv), Unit 6(1) has rightfully exercised his jurisdiction under the provisions of the Black Money Act, 2015. Legal and jurisdictional framework for the DDIT (Inv) The contention raised by the Assessee regarding the lack of jurisdiction of the DDIT (Inv), Unit 6(1), Mumbai as raised by way of the additional ground has been vague and unclear until the date of the final hearing dated 5 May 2025 before this Hon'ble Tribunal. The advocate for the Assessee has only then clarified that the DDIT (Inv) does not have the requisite jurisdiction as per Para 15 and 16 of the Guidelines dated 23 January 2018. 2. In the Assessee's letter dated 2 April 2024, it is stated that the penalty order passed by the DDIT (Inv) Unit 6(1), is not in accordance with the CBDT guidelines dated 23 January 2018. a. Firstly, this contention is not an issue relation to jurisdiction but an issue relation to the merits of the penalty order. b. Secondly, the contention raised by the Assessee in the said letter and the additional ground of appeal sought to be raised have no correlation. c. Thirdly, the relevant circular in relation to concurrent jurisdiction is the CBDT Notification No. 39 of 2017 dated 16 May 2017. The CBDT Circular of 23 January 2018, only provides for guidelines for handling cases under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (hereinafter referred to as \"the Act/ Black Money Act\") and is only refers to the processes and timelines, and cannot be used by the Assessee to mount a challenge to the jurisdiction of the DDIT (Inv) Unit 6(1). d. Fourthly, the said order conferring jurisdiction on the DDIT was copied to the Assessee. However, the Assessee did not raise any jurisdictional objection at the relevant time and also unconditionally participated in the proceedings. 3. In any event, the said objection is unsustainable in law as the jurisdictional authority of the DDIT (Inv) flows from the combined reading of Section 120 of the Income Tax Act, 1961, and Section 6 of the Black Money Act, 2015, which clearly empowers the CBDT and its officers to issue orders assigning jurisdiction to specific officers, including concurrent jurisdiction. 4. The relevant portion of Section 120 of the Income Tax Act is as follows: \"Section 120. Jurisdiction of income-tax authorities. Printed from counselvise.com 10 BMA Nos. 4, 5, 6 & 7/Mum/2023 (1) Income-tax authorities shall exercise all or any of the powers and perform all or any of the functions conferred on, or, as the case may be, assigned to such authorities by or under this Act in accordance with such directions as the Board may issue for the exercise of the powers and performance of the functions by all or any of those authorities. (2) The directions of the Board under sub-section (1) may authorise any other income-tax authority to issue orders in writing for the exercise of the powers and performance of the functions by all or any of the other income-tax authorities who are subordinate to it.\" 5. It is submitted that Sections 120(1) and 120(2) of the Income Tax Act authorize the CBDT to assign jurisdiction to officers through orders and directions, which are binding in nature. 6. Further, Section 6(3) of the Black Money Act explicitly states that the jurisdiction of tax authorities under the Black Money Act shall align with the jurisdiction assigned under the Income Tax Act, including concurrent jurisdiction. The relevant portion of Section 6(3) of the Black Money Act, 2015 is reproduced as follows: \"Section 6. Tax Authorities (1) The income tax authorities specified in section 116 of the Income Tax Act, shall be the tax authorities for the purpose of this Act. (2) Every such authority shall exercise the powers and perform the functions of a tax authority under this Act in respect of any person within his jurisdiction. (3) Subject to the provisions of sub-section (4), the jurisdiction of a tax authority under this Act shall be the same as he has under the Income-tax Act by virtue of orders or directions issued under section 120 of that Act (including orders or directions assigning the concurrent jurisdiction) or under any other provision of that Act. (4) The tax authority having jurisdiction in relation to an assessee who has no income assessable to income-tax under the Income-tax Act shall be the tax authority having jurisdiction in respect of the area in which the assessee resides or carries on its business or has its principal place of business\" 7. Thus, the DDIT (Inv) Unit 6(1), Mumbai, derives lawful jurisdiction under the framework of these provisions. Compliance with notifications governing jurisdiction (a) CBDT Notification S.O. 1590(E) dated 16 May 2017 (Annexure A): Printed from counselvise.com 11 BMA Nos. 4, 5, 6 & 7/Mum/2023 8. This notification defines the territorial jurisdiction under the Black Money Act and establishes that the Municipal Corporation of Greater Mumbai and Navi Mumbai fall within the jurisdiction of the Director General of Income Tax (Investigation), Mumbai. The relevant portion of CBDT Notification S.O. 1590(E) dated 16 May 2017 is as follows: Sl. No. Director General of Income-tax (Investigation) Head Quarters Principal Director / Director of Income- tax (Investigation) Head Quarters Territorial areas (1) (2) (3) (4) (5) (6) 12 Director General of Income-tax (Investigation), Mumbai Mumbai Principal Director/Director of Income-tax (Investigation), Mumbai-1 Mumbai Areas within the limits of Municipal Corporations of Greater Mumbai and Navi Mumbai Principal Director/Director of Income-tax (Investigation), Mumbai-2 Mumbai Areas within the limits of Municipal Corporations of Greater Mumbai and Navi Mumbai 13 Director General of Income-tax (Investigation), Bihar and Jharkhand Patna Principal Director/Director of Income-tax (Investigation), Patna Patna Areas within the limits of the States of Bihar and Jharkhand 14 Director General of Income-tax (Investigation), Maharashtra (Except Mumbai) Pune Principal Director/Director of Income-tax (Investigation), Pune Pune Areas within the limits of the Revenue districts (including any district carved out from these subsequently) of (i)Pune (ii)Satara (iii)Sangli (iv)Solapur 9. The concurrent jurisdiction was accorded to DDIT (Inv) Unit 6(1), Mumbai by Pr. DIT(Inv)-2 Mumbai vide order No. Pr.DIT(Inv.)-2/BMA/SS/2020-21 on 16 September 2020 (Annexure B) in accordance with the provisions of the Act and the guidelines issued by CBDT. Further, it is pertinent to note that Assessee's address i.e. Bungalow No. 2, Silver Oak Estate, Breach Candy, Bhulabhai Desai Road is indisputably located within the limits of Municipal Corporation of Greater Mumbai, rendering the proceedings against the Assessee jurisdictionally valid. Printed from counselvise.com 12 BMA Nos. 4, 5, 6 & 7/Mum/2023 (b) CBDT Notification F.No 414/134/2015-IT(Inv.I) (Pt) dated 23 January 2018: 10. The Assessee relies on this notification. However, the Assesee does not indicate how the said notification impinges on the jurisdiction of Ld. DDIT (Inv.) Unit 6(1). Further, as stated earlier, the power to confer jurisdiction on the Ld. DDIT (Inv.) Unit 6(1) arises from the Notification S.O. 1590(E) dated 16 May 2017 and not from the guidelines as set out in this Notification. 11. Paragraph 9 of the CBDT Notification F.No 414/134/2015-IT (Inv.I) (Pt) dated 23 January 2018 is reproduced for ease of reference as follows: \"9. Stage of assigning concurrent jurisdiction of AO to DDIT (Inv.)/ADIT (Inv.) concerned by DGIT(Inv.)/Pr.DIT(Imv): Where the conditions of para 6 above are satisfied and either notice under section 10(1) is to be issued or inquiry under section 8 of the BM Act is to be initiated, DGIT(Inv.)/Pr.DIT(Inv.) concerned is required to assign concurrent jurisdiction of AO 10 DDIT (Inv.)) ADIT (Inv) concerned in accordance with these guidelines, before issuance of the notice or initiation of the inquiry, as the case may be. Further, pursuant to assignment of concurrent jurisdiction of AO to DDIT (Inv)/ADIT(Inv.) concerned, AO and DDIT(Inv.) /ADIT(Inv.) would be the same officer and therefore, for the purposes of section 10 of the BM Act, date of assigning concurrent jurisdiction of AO to DDIT (Inv.)/ADIT(Inv.) concerned by the respective DGIT(Inv.)/ Pr.DIT(Inv.) would be the date of receipt of the information by AO or date of coming of the information to AO's notice. This date is relevant for operation of several provisions of the BM Act.\" 12. Further, it is seen that the office of DDIT (Inv) Unit 6(1) was in receipt of information with respect to non-disclosure of shareholding in two Singapore entities by Shri Sadanand Sule. Pursuant to the said information and to ascertain the facts of the case the then DDIT(Inv.)-Unit 6(1) was authorized by concurrent jurisdiction order passed by the Pr. Director of Income Tax Investigation (Inv.)-2 for the purpose of Black Money proceedings in the case of Shri Sadanand Sule. Accordingly, in the present case, the order for concurrent jurisdiction dated 16 September 2020 was passed in accordance with the above guidelines [Order for concurrent jurisdiction/ Page 1] and prior to the issuance of the notice under Section 8(1) of the Black Money Act on 21 September 2020 [Show cause notice dated 21 September 2020/ Page 2 of Compilation). Hence, the process aligns with the CBDT notifications and leaves no scope for questioning the jurisdiction. Assessee's non-compliance supports valid exercise of jurisdiction. 13. It is pertinent to note that the Assessee has admitted, in their reply dated 30 September 2020 [Response of the Assessee dated 30 September 2020/ Para 7 and 16/ Page 3 and 4), to holding shares in foreign companies, including Manquist Holdings Pte. Limited and Aavishkaar International Private Limited, which were omitted from their income tax returns. In this regard, it is submitted that the explanation of \"inadvertent error\" [CIT (A) dated 3 February 2023/Para 4.1] does not absolve the Assessee of the statutory duty to disclose foreign assets under the Black Money Act, 2015 Printed from counselvise.com 13 BMA Nos. 4, 5, 6 & 7/Mum/2023 14. The procedural steps undertaken by the DDIT (Inv) Unit 6(1) demonstrate full compliance with the statutory framework and the CBDT notifications: a. The order for concurrent jurisdiction was validly passed by Pr. DIT (Inv)-2, Mumbai, on 16 September 2020. b. The notice under Section 8(1) of the Black Money Act, issued on 21 September 2020, was a lawful and timely exercise of jurisdiction. c. The penalty order under Section 43 was passed only after due consideration of the Assessee's submissions and the procedural requirements laid out under the Act. 15. Therefore, the penalty imposed under Section 43 is a direct consequence of the Assessee's failure to comply with the disclosure requirements under the Black Money Act, 2015. Jurisdictional objections raised by the Assessee cannot vitiate the findings of deliberate concealment and failure to disclose foreign income/assets. Interpretation of Guidelines of CBDT dated 23 January 2018 16. It is submitted that with a view to create a more expeditious and efficient administrative framework for the implementation of the Black Money Act, and to achieve the intended objectives, the CBDT issued Guidelines for handling cases under the Black Money Act. These guidelines are issued to harmonise jurisdictional assignments and they do not override the substantive provisions of the Black Money Act or the 16 May 2017 Notification cited hereinabove. 17. Section 46(1) of the BM Act empowers the DDIT(Inv) to impose penalties, and Section 46(4) mandates approval of the Joint Commissioner of Income Tax (JCIT) before passing a penalty order. In the present case, the DDIT(Inv), having been assigned AO powers under the Notification dated 16 May 2017, clearly has jurisdiction. There is nothing in the Guidelines that takes away this power, nor can such an interpretation be sustained without violating the statute's express provision. 18. In addition, Paragraphs 15 and 16 of the Guidelines must be read in harmony and interpreted in furtherance of the legislative intent of Section 46(4) of the Black Money Act and the May 2017 Notification. These Guidelines merely serve to administratively allocate functions between the DDIT(Inv)/ADIT(Inv) and the regular AO to avoid duplication or overlap. 19. Paragraph 16 of the Guidelines specifically recognizes the capacity of the DDIT/ADIT to initiate and pass necessary penalty orders. This clearly shows that penalty powers are vested with DDIT in appropriate cases. Nowhere is it suggested that DDIT loses its jurisdiction or is incapable of passing penalty orders. 20. Therefore, Paragraph 15 and 16 of the Guidelines are for administrative convenience to distribute the responsibilities of the regular AO and DDIT so that there is no overlap or conflict between the tax authorities. Printed from counselvise.com 14 BMA Nos. 4, 5, 6 & 7/Mum/2023 21. Further, it is also clear that once the DDIT is empowered by virtue of the Notification of May 2017, the DDIT retains exclusive jurisdiction until a conscious administrative decision is made to transfer the case to the regular AO. Until then, the DDIT exercises all AO functions inter alia initiation and adjudication of penalty proceedings. It is only when the DDIT decides to hand over the baton to the regular AO, that the regular AO comes into the picture. 22. Any other interpretation of the Guidelines would be contrary to inter alia Section 46 of the Black Money Act and the May 2017 Notification and would result in conflict of power and jurisdiction between the tax authorities. 23. In the present case, there is no such overlap in the exercise of powers between the DDIT and the regular Assessing Officer. In fact, the DDIT has already passed the assessment order dated 21 September 2020 thereby establishing that the entire proceedings were handled by the DDIT in accordance with statutory empowerment. 24. Moreover, it is evident from the nature of the Assessee's objection that no challenge is made to the inherent jurisdiction of the DDIT. The DDIT's jurisdiction flows directly from Section 46 of the Black Money Act and is further reinforced by the Orders dated 16 September 2020 and 3 December 2021. 25. Where there is no challenge to the inherent jurisdiction of the authority, any procedural objection raised by the Assessee does not go to the root of jurisdiction. Furthermore, the Assessee was duly served with the penalty proceedings, participated in the same without raising any jurisdictional objection, and was provided opportunities to be heard. Such conduct amounts to acquiescence and constitutes a waiver against any purported challenge to the jurisdiction. Approval of JCIT/JDIT under the Black Money Act 26. It is submitted that approval has indeed been granted by the Additional Director of Income Tax on 3 December 2021 who is senior in rank to the Joint Commissioner of Income Tax (Annexure C). 27. As per Section 116 of the Income Tax Act, which applies mutatis mutandis to the Black Money Act by virtue of Section 6 thereof, both the Joint Commissioner and the Additional Commissioner/Director fall under the category of supervisory authorities and the Additional Director is senior in rank to the JCIT. 28. Further, Under Section 2(15) of the Black Money Act, reference is made to the Income Tax Act for interpretation and adoption of terms not specifically defined under the Black Money Act. 29. Accordingly, reference is made to the following definitions under the Income Tax Act: \"Section 2(28C): \"Joint Commissioner\" means a person appointed to be a Joint Commissioner of Income-tax or an Additional Commissioner of Income-tax. Printed from counselvise.com 15 BMA Nos. 4, 5, 6 & 7/Mum/2023 Section 2(28D): \"Joint Director\" means a person appointed to be a Joint Director of Income-tax or an Additional Director of Income-tax.\" 30. It is pertinent to note that the Joint Commissioner of Income Tax (JCIT) and the Joint Director of Income Tax (JDIT) are officers of equivalent rank within the Income Tax Department, as evidenced from Section 116 of the Income Tax Act, 1961. The distinction lies merely in their functional roles; while a JCIT is part of the Assessment and Prosecution wing, a JDIT operates within the Investigation wing. However, this departmental distinction does not alter their hierarchical parity or the validity of approvals issued by either in their respective capacities. The amendment to the Black Money Act in 2018 through the Finance Act, 2018 further reinforces the same. 31. In light of the above, it is clear that the Additional Director of Income Tax is statutorily recognised as having the same powers and functions as the Joint Director of Income Tax. Therefore, any delegation or assignment of jurisdiction to the DDIT(Inv) by the Additional Director of Income Tax is legally valid and within the ambit of the CBDT notification and guidelines. 32. It is clear that, in the present case, approval has not only been obtained, but it has been obtained from an authority higher than what is prescribed under the statute. Therefore, the spirit and purpose of the statute has therefore been fully complied with, if not exceeded. 33. This submission is based on the fact that approval from a higher-ranking officer satisfies statutory intent, unless the provision expressly prohibits substitution or delegation. 34. Even if a hyper-technical objection were to be taken that approval must be from a JCIT specifically, it is submitted that no prejudice has been caused to the Assessee for the following reasons: a. Approval has been granted from a higher authority, thus ensuring adequate oversight, b. The Assessee has been issued a show cause notice and given an opportunity to be beard; c. The Assessee has participated in the proceedings without raising any such objection previously. 35. While Section 46(4) mandates approval from the Joint Commissioner of Income Tax, it does not prohibit approval from a higher authority. In the present case, approval has been duly obtained from the Director of Income Tax, a higher ranking officer. 36. The Guidelines issued by CBDT must be read in harmony with the Black Money Act itself and interpreted in a manner that furthers its object rather than defeating it on hyper-technical grounds. Approval by a superior authority satisfies the legislative intent and provides even greater administrative scrutiny. Therefore, the Printed from counselvise.com 16 BMA Nos. 4, 5, 6 & 7/Mum/2023 JCIT approval, as alleged, is not prohibited, and due compliance with statutory requirements stands established. Waiver of jurisdictional objection by participation 37. In any case, it is submitted that the Assessee has actively participated in the proceedings without raising any jurisdictional objection at the earliest opportunity and has thereby waived their right to challenge jurisdiction at a later stage. In any event, the nature of the alleged objection to jurisdiction is not an objection to the inherent jurisdiction of the DDIT, and therefore, the Assessee cannot, in any event, sustain a challenge to jurisdiction of the DDIT at this stage. 38. In light of the above, the Assessee's jurisdictional objection is untenable, as it has been waived by their active participation in the proceedings and their failure to challenge jurisdiction at the appropriate stage. 39. In view of the above, the jurisdiction exercised by the DDIT (Inv) Unit 6(1), Mumbai, is wholly valid and in compliance with statutory provisions and CBDT notifications. The objections raised by the Assessee regarding jurisdiction lack merit and must be dismissed. Further, the penalty order under Section 43 of the Black Money Act is justified on both legal and factual grounds.” 9. In his rejoinder written submissions, it was submitted by the Ld.AR that the written submissions so filed on behalf of the Department deal with and object to several arguments of the assessee, which were never made during the course of hearing before the Tribunal. In this regard, it was submitted that it is not the case of the assessee that concurrent jurisdiction to DDIT (Inv), Unit 6(1) has not been assigned validly vide order dt. 16-09-2020 by the Ld. Pr.DIT as so contended by the Department in para Nos. 8 & 9 of its written submissions. It was further submitted that the assessee never objected to the validity of approval given by the JDIT as contended by the Department in its written submissions in para Nos. 26 to 39. It was submitted that limited proposition which has been canvassed on behalf of the assessee was that as per Section 46 of the Black Money Act, since penalty involved is of more than Rs. 5 lakhs and the order has been passed by the Dy. Director of Income Tax (Inv.), the same required the approval of the JDIT (approval in fact been taken by the DDIT). However, as per para Nos. 16 and 17 of the CBDT circular Printed from counselvise.com 17 BMA Nos. 4, 5, 6 & 7/Mum/2023 dt. 23-01-2018, the DDIT has to transfer the case to the regular AO for the purposes of passing such penalty orders. It was submitted that the DDIT himself has no jurisdiction to pass the penalty order as per the said CBDT circular, which is binding on the Departmental authorities and the case law on the proposition that the circulars and instructions issued by the CBDT are binding on the departmental authorities have already been submitted. It was further submitted that inspite of assessee participating in the penalty proceedings, the jurisdictional objections can be raised at any stage and there is no estoppel against the law. It was submitted that there is no parallel provision like section 124(3) of the Income Tax Act in the Black Money Act and Section 84 of the Black Money Act doesn‟t incorporate section 124 of the Income Tax Act. It was further submitted that as per para 16 of the CBDT Circular, the DDIT is not authorized to pass a penalty order where approval of JCIT is required. It was submitted that in the written submissions so filed, it has been accepted that the CBDT Circular distributes responsibilities of the regular AO and DDIT to avoid overlap or conflict between the tax authorities for administrative convenience but at the same time, they are binding on the authorities. It was further submitted that the interpretation suggested by the assessee do not run contrary to section 46 of the Black Money Act. It was submitted that section 46 empowers the tax authority to levy penalty. As per Section 6 of the Black Money Act, both DDIT and ACIT/DCIT are tax authorities and thus both the authorities have the powers to levy penalty. However, the CBDT Circular prescribes that only regular AO can levy penalty beyond Rs 5 lacs and therefore, the Circular merely regulates the power given u/s 46 and doesn‟t contradict it. It was accordingly submitted that the penalty so levied by the DDIT(Inv.)-6(1), Mumbai vide order dt. 04-12-2021 deserves to be set aside. Printed from counselvise.com 18 BMA Nos. 4, 5, 6 & 7/Mum/2023 10. We have heard the rival contentions and perused the material available on record. Firstly, in terms of admittance of the additional ground of appeal, we find that the assessee seeks to challenge the jurisdiction of the DDIT (Inv.), Unit 6(1), Mumbai to pass the penalty order under Section 43 of the Black Money Act on the ground that the same is not in compliance with Para 15 and 16 of guidelines dated 23-11-2018 issued by the CBDT where it is the regular AO who can pass such penalty order and not the DDIT (Inv.), Unit 6(1), Mumbai. The said guidelines so issued by the CBDT are very much on record and infact, the order passed by the Pr.DIT(Inv)–2, Mumbai dated 16-09-2020 granting concurrent jurisdiction to DDIT (Inv.), Unit 6(1), Mumbai in case of the assessee admittedly is pursuant to the said guidelines and the powers conferred upon the Pr. DIT(Inv)–2, Mumbai by CBDT Notification dated 16-05-2017. The challenge therefore is not to the concurrent jurisdiction of DDIT (Inv.), Unit 6(1), Mumbai but to the jurisdiction of DDIT (Inv.), Unit 6(1), Mumbai to pass the penalty order, more so, the pecuniary jurisdiction to pass the penalty order where penalty u/s 43 of the Black Money Act exceeds a sum of Rs 5 lacs. We, therefore, find that the challenge to jurisdiction of the DDIT (Inv.), Unit 6(1), Mumbai to pass the penalty order u/s. 43 of the Black Money Act is purely legal in nature and all relevant facts are on record and no new facts are required to be verified or brought on record in order to adjudicate the said ground of appeal. 11. Further, the fact that the assessee has participated in the penalty proceedings, the same cannot be held as deemed waiver on part of the assessee to accept the jurisdiction of the DDIT (Inv.), Unit 6(1) and not to challenge his jurisdiction where it is ultimately determined that the DDIT (Inv.), Unit 6(1) doesn‟t have the jurisdiction at first place to pass the penalty order. It is for the DDIT (Inv.), Unit 6(1), Mumbai to determine Printed from counselvise.com 19 BMA Nos. 4, 5, 6 & 7/Mum/2023 whether he has the jurisdiction to pass the penalty order under section 43 of the Act in the facts and circumstances of the present case where penalty exceeds Rs 5 lacs. And where ultimately, it is determined that the DDIT (Inv.), Unit 6(1), Mumbai doesn‟t have the jurisdiction to pass the penalty order under Section 43 of the Black Money Act, the same goes to the root of the matter and fundamentally effect the very action on part of the DDIT (Inv.), Unit 6(1), Mumbai and where the DDIT (Inv.), Unit 6(1), Mumbai was oblivious about the same, the assessee cannot be prevented from raising the same before the Tribunal for the first time even though the same has not been taken up before the DDIT (Inv.), Unit 6(1), Mumbai or before the Ld.CIT(A). It is a settled position that there cannot be any estoppel against the law. The Hon‟ble Supreme Court in case of NTPC (supra) has held that “under Section 254 of the Income-tax Act, the Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. The power of the Tribunal in dealing with appeals is thus expressed in the widest possible terms. The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, we do not see any reason why the assessee should be prevented from raising that question before the tribunal for the first time, so long as the relevant facts are on record in respect of that item. We do not see any reason to restrict the power of the Tribunal u/s. 254 only to decide the grounds which arise from the order of the Commissioner of Income-tax (Appeals). Both the assessee as well as the Department have a right to file an appeal/cross-objections before the Tribunal. We fail to see why the Tribunal should be prevented from considering questions of law arising in assessment proceedings although Printed from counselvise.com 20 BMA Nos. 4, 5, 6 & 7/Mum/2023 not raised earlier.” In light of the same, the additional ground of appeal is hereby admitted for adjudication, being a legal ground of appeal which goes to the root of the matter in terms of challenging the jurisdiction of DDIT (Inv.), Unit 6(1), Mumbai to pass the penalty order under Section 43 of the Black Money Act. 12. In exercise of powers conferred by sub-section (1) and sub-section (2) of Section 120 of the Income Tax Act, 1961 r/w Section 6 of the Black Money Act, the Central Board of Direct Taxes vide notification No. S.O.1509(E) Dt. 16-05-2017 has authorized Principal Director of Income Tax as so specified to issue orders in writing for exercise of concurrent powers and perform the function of an AO to an Asst. Director of Income Tax or Dy. Director of Income Tax, who are sub-ordinate to him within the specified territorial area. In exercise of the said powers, in the instant case, the Principal Director of Income Tax (Inv.)-2, Mumbai passed an order No. Pr.DIT(Inv)-2/BMA/SS/2020-21 dt. 16-09-2020, whereby he has authorised Dy. Director of Income Tax (Inv.), Unit-6(1), Mumbai to exercise the concurrent powers and perform functions of the AO in the case of the assessee having PAN No. AAQQPS3639B having current jurisdiction with DCIT/ACIT-19(3), Mumbai. There is thus, no dispute in the instant case that the Central Board of Direct Taxes has authorized the Principal Director of Income Tax (Inv.)-2 to further authorize Dy. Director of Income Tax to exercise concurrent powers and performs the function of AO and pursuant to such powers, the Principal Director of Income Tax (Inv.)-2, Mumbai has authorized the Dy. Director of Income Tax (Inv.), Unit-6(1) to exercise concurrent powers and functions of an AO in case of the assessee. Here, it is also relevant to note that the said authorization to exercise concurrent powers and perform functions of an AO is qua the assessee and not qua the assessee for a particular assessment year. Therefore, as Printed from counselvise.com 21 BMA Nos. 4, 5, 6 & 7/Mum/2023 far as all the impugned assessment years under consideration are concerned, the Dy. Director of Income Tax (Inv.), Unit-6(1), Mumbai has the necessary authorization to exercise the concurrent powers and perform functions of an AO in the case of the assessee. 13. At the same time, what is equally relevant to note is that there are guidelines issued by the Central Board of Direct Taxes dt.23-01-2018 which have evidently been issued well before the grant of the concurrent powers to Dy. Director of Income Tax (Inv.), Unit-6(1). The said guidelines talks about handling cases under the Black Money Act and it has been provided in the said guidelines that with a view to have more expeditious and efficient administrative framework for implementation of the BM Act for achieving the intended objectives of the separate law (BM Act) enacted to deal with undisclosed foreign assets cases, the CBDT has authorized DGIT(Inv.)/Pr.DIT(Inv.), vide Notification No.39 of 2017 dated 16th May 2017, to assign concurrent jurisdiction of AO to DDIT(Inv.)/ADIT(Inv.) concerned for exercising the powers and functions of AO under the BM Act. It has been provided that in order to achieve the intended objectives and to have streamlined action under the BM Act, the guidelines with reference to processes and timelines are issued and which shall be applicable with effect from 01-02-2018. 14. It has been further provided in the guidelines that the CBDT vide Notification No. 73/2015/F.No.187/13/2015 (ITA.I) dated 24th August, 2015 directed that Additional Commissioners of Income Tax or Joint Commissioners of Income Tax (hereinafter referred as regular AO under the BM Act), as the case may be, shall exercise the powers and perform the functions of AO under the BM Act. It has been observed that most of the cases of undisclosed foreign income/assets are detected by officers of the Printed from counselvise.com 22 BMA Nos. 4, 5, 6 & 7/Mum/2023 Investigation Directorates during various investigations. Such officers complete the investigations and hand over their reports to the regular AOs for taking further necessary action under the BM Act. The whole process takes unduly long time. It is in this background that the CBDT, vide the above-mentioned Notification dated 16th May 2017, has empowered DGIT(Inv.)/Pr.DIT(Inv.) to assign concurrent jurisdiction of AO to DDIT (Inv.)/ ADIT(Inv.) with a view to enable them to undertake assessment, prosecution and other related functions, as AO, under the BM Act. 15. It is an admitted position of the Revenue that these guidelines are issued to harmonise jurisdictional assignments and they do not override the substantive provisions of the Black Money Act or the 16 May 2017 Notification issued by CBDT. It is also an admitted position of the Revenue that the order for concurrent jurisdiction to Dy. Director of Income Tax (Inv.), Unit-6(1), Mumbai in case of the assessee dated 16 September 2020 was passed in accordance with the above guidelines and prior to the issuance of the notice under Section 8(1) of the Black Money Act on 21 September 2020 and the whole process of grant of concurrent jurisdiction thus aligns with the CBDT guidelines. 16. In para No.3 of the said guidelines, it has been provided that notification dt. 16-05-2017 empowering the Dy. Director of Income Tax (Inv.), /Principal Director of Income Tax (Inv.) to assign the concurrent jurisdiction of AO to DDIT(Inv.)/ADIT(Inv.) is to exercise the powers and functions of the AO only for the purposes of the Black Money Act i.e., only to the extent of issues pertaining to undisclosed foreign asset/income of a person and it does not cover issues under the Income Tax Act, 1961. Printed from counselvise.com 23 BMA Nos. 4, 5, 6 & 7/Mum/2023 17. In Para No. 4 of the said guidelines, it has been further provided that the concurrent jurisdiction of the AO is to be assigned only to DDIT(Inv.)/ADIT(Inv.), who is investigating issues pertaining to undisclosed foreign asset/income of a person and, therefore, the competent authority is required to pass the order assigning the concurrent jurisdiction of AO to specific DDIT(Inv.)/ADIT(Inv.) in the specific case and no general order is intended to be passed. In the instant case, there is no dispute that the Pr.DIT(Inv.)-2, Mumbai has passed a specific order dated 16-09-2020 directing the DDIT(Inv.),Unit-6(1), Mumbai to exercise concurrent powers and perform functions of AO in the case of the assessee. 18. Para No. 5 of the guidelines further provides that the concurrent jurisdiction of AO is to be assigned to DDIT(Inv.)/ADIT(Inv.) concerned in only those cases of undisclosed foreign asset/income where investigation report on undisclosed foreign income/asset has not been sent by the Investigation Directorate to the regular AO on the date from which these guidelines are applicable. It is also clarified that where the investigation report in a case has been sent to the regular AO or the regular AO has already initiated the assessment proceedings under the Black Money Act in a case, the regular AO would continue to proceed and complete assessment and other proceedings in that case under the Black Money Act and DDIT(Inv.)/ADIT(Inv.) concerned is not to be assigned concurrent jurisdiction of AO in such cases. In the instant case, there is no such dispute which has been raised for our consideration. 19. Para No. 6 of the said guidelines further provides that a combined reading of the provisions of section 3 and section 10 of the Black Money Act suggests that AO could initiate the proceedings u/s. 10 of the Act the Printed from counselvise.com 24 BMA Nos. 4, 5, 6 & 7/Mum/2023 Black Money Act on receipt of information of prima facie undisclosed foreign income/asset. Thereafter in para No. 7, it has been provided that where the conditions of para 6 above are satisfied and either notice u/s. 10(1) is to be issued or inquiry u/s. 8 of the Black Money Act is to be initiated, DGIT(Inv.)/Pr.DIT(Inv.) concerned is required to assign concurrent jurisdiction of AO to DDIT(Inv.)/ADIT(Inv.) concerned in accordance with these guidelines before issuance of the notice or initiation of the inquiry as the case may be. In the instant case, it is not in dispute that the concurrent jurisdiction of the AO has been assigned to the DDIT(Inv.), Unit-6(1), Mumbai on 16-09-2020 well before the issuance of the show cause notice u/s. 8 of the Black Money Act, dt. 21-09-2020 and the same is thus in consonance with the guidelines so laid down by CBDT. 20. Para No. 8 of the guidelines talks about time limit for issuance of notice u/s. 10(1) of the Black Money Act. Para No. 9 talks about the stage of sharing information with Enforcement Directorate for action under Black Money Act. Para No. 10 talks about proper and prompt references to relevant foreign jurisdictions and all these matter are not relevant for the present purposes. 21. Para No. 11 of the guidelines talks about the issuance of show cause notice and passing of the assessment order. It provides that before passing the assessment order, show cause notice would be issued by DDIT(Inv.)/ADIT(Inv.) and draft of the assessment order should be put up for administrative approval of the Addl.DIT(Inv.)/JDIT(Inv.) and pursuant to that, the assessment order should be passed. It provides that after passing the assessment order, the same should be sent to the regular AO for the purposes of demand notice etc., entering the particulars in relevant registers, recovery and other follow-up actions. The guidelines thus Printed from counselvise.com 25 BMA Nos. 4, 5, 6 & 7/Mum/2023 demarcates the powers and functions between the DDIT(Inv.)/ADIT(Inv.) and the regular AO where the former has to complete the required steps leading up to passing of the assessment order and thereafter, the matter has to be handed over to the regular AO for all subsequent action steps in terms of demand and recovery, etc. 22. Paras 12, 13 and 14 are in the context of prosecution proceedings under the Black Money Act which are not relevant for the present purposes. 23. Now, coming to para 15 of the guidelines which is relevant for the present purposes. It has been provided that DDIT(Inv.)/ADIT(Inv.) handling the case of an undisclosed foreign asset/income in the capacity of AO would sent the case to its regular AO after completion of assessment and filing of prosecution complaint for the offences under the Black Money Act. It has been further provided that further proceedings pertaining to penalties under the Black Money Act, follow up of the prosecutions filed, recovery, appeals and other actions under the Black Money Act would be expeditiously handled by the regular AO and DDIT(Inv.)/ADIT(Inv.) concerned would not exercise the powers and functions of the AO in respect of such further proceedings. It has been provided that DDIT(Inv.)/ADIT(Inv.) concerned would send the case to regular AO along with relevant case records within 30 days of completion of the last envisaged action. It has been provided that while sending, important issues to be followed up should be clearly indicated and further actions in respect of that case under the Black Money Act would be taken by the regular AO. Printed from counselvise.com 26 BMA Nos. 4, 5, 6 & 7/Mum/2023 24. We, therefore, find that as per para No. 15 of the guidelines so issued by the Central Board of Direct Taxes, it clearly lays down the actions in terms of completion of assessment proceedings and filing of prosecution complaint which lies with the DDIT(Inv.)/ADIT(Inv.) and as far as further proceedings are concerned, including actions relating to the penalties under the Black Money Act, it has been clearly provided that the same shall be handled by the regular AO and DDIT(Inv.)/ADIT(Inv.) concerned would not exercise the powers and function in respect of such proceedings. Therefore, in the instant case, where the DDIT(Inv.), Unit-6(1), Mumbai has taken action in terms of issue of show cause and subsequent levy of penalty u/s. 43 of the Black Money Act, the same is clearly not in compliance with and is at variance to the guidelines so laid down by the Central Board of Direct Taxes. 25. Further, we refer to para No. 16 of the guidelines which provides that the ADIT(Inv.)/DDIT(Inv.) in the capacity of AO may initiate and pass necessary penalty order wherever approval of JCIT is not required. It has been provided that after passing the penalty order, the same should be sent to the regular AO for the purposes of demand notice etc, entering the particulars in relevant registers, recovery and other follow up actions. It has been further provided that wherever required, the regular AO should initiate penalty proceedings under the Black Money Act (particularly u/s. 41 of the Black Money Act) immediately on receipt of the assessment order and relevant records and pass necessary orders, at the earliest possible, without waiting for disposal of appeals, etc. 26. On reading of the said guidelines, we find that as per para 16, it provides that ADIT(Inv.)/DDIT(Inv.) can initiate and pass penalty orders wherever approval of JCIT is not required. It thus carves out an exception Printed from counselvise.com 27 BMA Nos. 4, 5, 6 & 7/Mum/2023 to the earlier guidelines as per para 15 which lays down that it is the regular AO who can levy penalty and provides that only in a situation, approval of JCIT is not required before levy of penalty, the ADIT(Inv.)/DDIT(Inv.) can initiate and pass penalty orders. Further, except for the aforesaid exception, it emphasizes the earlier guidelines as laid down in para 15 that it is the regular AO who should initiate the penalty proceedings and pass the penalty orders. 27. In the instant case, penalty has been levied u/s Section 43 of the Black Money Act and the procedure for levy of penalty has been provided u/s. 46 of the Black Money Act and the relevant provisions read as under: “46. Procedure.-(1) The tax authority shall, for the purposes of imposing any penalty under this Chapter, issue a notice to an assessee requiring him to show cause why the penalty should not be imposed on him. (2) The notice referred to in sub-section (1) shall be issued - (a) during the pendency of any proceedings under this Act for the relevant previous year, in respect of penalty referred to in section 41; (b) within a period of three years from the end of t. Financial year in which the default is committed, in respect of penalties referred to in section 45. (3) No order imposing a penalty under this Chapter shall be made unless the assessee has been given an opportunity of being heard. (4) An order imposing a penalty under this Chapter shall be made with the approval of the Joint Commissioner [or the Joint Director], if- (a) the penalty exceeds one lakh rupees and the tax authority levying the penalty is in the rank of Income-tax Officer; or (b) the penalty exceeds five lakh rupees and the tax authority levying the penalty is in the rank of Assistant Commissioner or Deputy Commissioner [or Assistant Director or Deputy Director]. (5) Every order of penalty issued under this Chapter shall be accompanied by a notice of demand in respect of the amount of penalty imposed and such notice of demand shall be deemed to be a notice under section 13.” Printed from counselvise.com 28 BMA Nos. 4, 5, 6 & 7/Mum/2023 28. On perusal of provisions of Section 46 of the Black Money Act, it is clear that an order imposing penalty shall be made with the approval of the Joint Commissioner or Joint Director where the penalty exceeds Rs. 1 lakh and the tax authority levying the penalty is in the rank of Income Tax Officer or in a situation, the penalty exceeds Rs. 5 lakhs and the tax authority levying the penalty is in the rank of Assistant Commissioner or Deputy Commissioner or Assistant Director or Deputy Director. In the instant case, penalty amounting to Rs. 10 lakhs has been levied u/s. 43 of the Black Money Act and the tax authority levying the penalty is Dy. Director of Income Tax(Inv.), Unit-6(1), Mumbai. Therefore, before levying such penalty, he has to necessarily seek the approval of the Joint Commissioner or the Joint Director. In the instant case, it is not in dispute that the DDIT(Inv.), Unit-6(1), Mumbai has infact taken the necessary approval from the Add.DIT(Inv.) before levying the penalty. What has been disputed is the fact that it is only in a situation where the approval of Joint Commissioner of Income Tax or Add.DIT(Inv.) is not required, the DDIT(Inv.) in the capacity of the AO can initiate and pass necessary penalty order as per para No. 16 of the guidelines so laid down by the CBDT. In other words, the guidelines lays down the pecuniary jurisdiction of DDIT(Inv.) in terms of quantum of penalty which he can levy and that too, without seeking approval from JCIT/JDIT. Therefore, the exception so carved in para no. 16 of the guidelines doesn‟t apply in the instant case and DDIT(Inv.) couldn‟t have levied the penalty in the instant case amounting to Rs 10 lacs u/s 43 of the Black Money Act which is beyond his pecuniary jurisdiction and it is the regular AO who should have initiated and levied the penalty. 29. We therefore find that in para No. 15 and 16, the guidelines are clear to the effect that as far as matters relating to penalty under the Black Printed from counselvise.com 29 BMA Nos. 4, 5, 6 & 7/Mum/2023 Money Act is concerned, the same shall be handled by the regular AO and DDIT(Inv.) would not exercise the powers and functions of the AO in respect of such further proceedings. Further, para No.16 only carves out an exception to the aforesaid guidelines and lays down that DDIT(Inv.) may initiate and pass necessary penalty order wherever approval of Joint Commissioner of Income Tax is not required. The said exception does not apply in the facts of the present case as it is an undisputed fact that the penalty amounting to Rs. 10 lakhs has been levied on the assessee and the approval of the Additional Director of Income Tax has in fact been obtained before levy of such penalty. Therefore, in such a scenario, the penalty can only be initiated and levied by the regular AO and not by the DDIT(Inv.), Mumbai. 30. As mentioned earlier, such guidelines were available on record well before passing of the order granting concurrent jurisdiction to the DDIT(Inv.), Unit-6(1) and the authorization to exercise the concurrent powers and functions of the AO in the case of assessee therefore, has to be exercised in accordance with the guidelines so laid down by the Central Board of Direct Taxes. There is clearly non-compliance of the said guidelines which are binding on the DDIT(Inv.), Unit-6(1), Mumbai. The matter relating to levy of penalty in the instant case should be handled by the regular AO and it is the regular AO who could have exercised the jurisdiction to levy the penalty and not DDIT(Inv), Unit -6(1), Mumbai. 31. It is a settled legal proposition that the CBDT‟s instructions/guidelines are binding on the Revenue authorities and reference can be drawn to the decision of the Hon‟ble Andhra Pradesh High Court in the case of CIT vs. Smt. Nayana P. Dedhia (supra) where following Printed from counselvise.com 30 BMA Nos. 4, 5, 6 & 7/Mum/2023 the decision of the Hon‟ble Supreme Court in case of UCO Bank, the Hon‟ble High Court held as under: “3. A very short question is involved. Admittedly the Department issued a circular by way of press release on March 12, 1906. These guidelines were regarding \"Scrutiny assessment guidelines for assessment year 1996-97”. By these guidelines, it was notified that the Income-tax Department had decided not to select returns for the assessment year 1996-97 for detailed scrutiny, the total income declared is at least 30% more than the total income declared for the assessment year 1995-06. The case of respondent before the Tribunal was that the Department had decided not to have detailed scrutinies for the assessment year 1906-07 if the income dedared was at least 30% more than the income declared in 1995-96, therefore, the assessment itself was bad. The Tribunal accepted this contention. However, the learned Counsel for appellant submits that these instructions were not binding on the Tribunal or Court or were not available for execution to any Judicial authority. 4. There is no dispute about circular having been issued, which reads as under: “749A Scrutiny assessment guidelines for assessment year 1996-97. The Income-tax Department has decided not to select returns for the assessment year 1996-97 for detailed scrutiny if the total income declared is at least 30% more than the total income declared for the assessment year 1995-96. The following further conditions should be fulfilled: (a) the total income for both the assessment years should exceed the basis exemption limit: (b) the total income for the assessment year 1995-96 should not exceed Rs. 5 lakhs and (c ) tax is fully paid for the assessment year 1996-97 before the return is filed. In these cases the taxpayers will not be required to attend income-tax offices in connection with their assessments. However, some of these cases will be scrutinized if there is positive information of tax evasion or there is a large claim of refund.” The conditions laid down in the circular are also fulfilled by the respondent and there is no dispute on that also. Now, the only question, which needs an answer is, as to what is the status of these circulars. Circular had admittedly been issued by the Central Board of Direct Taxes under section 119(1) of the Act. What is the scope of such circulars should not detain us because of the authoritative pronouncement of the Hon'ble Supreme Court in UCO Bank v. CIT [1988] 237 (TR 889. The Supreme Court noted: Printed from counselvise.com 31 BMA Nos. 4, 5, 6 & 7/Mum/2023 \"What is the status of these circulars? Section 119(1) of the Income-tax Act, 1961, provides that, the Central Board of Direct Taxes may, from time to time, issue such orders, instructions and directions to other income-tax authorities as it may deem fit for the proper administration of this Act, and such authorities and all other persons employed in the execution of this Act shall observe and follow such orders, instructions and directions of the Board. Provided that no such orders, instructions or directions shall be issued (a) so as to require any income-tax authority to make a particular assessment or to dispose of a particular case in a particular manner; or (b) so as to interfere with the discretion of the Appellate Assistant Commissioner in the exercise of his appellate functions. Under sub- section (2) of section 119, without prejudice to the generality of the Board's power set out in sub-section (1), a specific power is given to the Board for the purpose of proper and efficient management of the work of assessment and collection of revenue to issue from time to time general or special orders in. respect of any class of incomes or class of cases, setting forth directions or instructions, not being prejudicial to assessees, as to the guidelines, principles or procedures to be followed in the work relating to assessment. Such instructions may be by way of relaxation of any of the provisions of the sections specified there or otherwise. The Board thus has power, inter alia, to tone down the rigour of the law and ensure a fair enforcement of its provisions, by issuing circulars in exercise of its statutory powers under section 119 of the Income-tax Act which are binding on the authonties in the administration of the Act. Ur Under section 119(2)(a), however, the circulars as contemplated therein cannot be adverse to the assessee. Thus, the authority which wields the power for its own advantage under the Act is given the right to forgo the advantage when required to wield it in a manner it considers just by relaxing the rigour of the law or in other permissible manners as laid down in section 119. The power is given for the purpose of just, proper and efficient management of the work of assessment and in public interest. It is a beneficial power given to the Board for proper administration of fiscal law so that undue hardship may not be caused to the assessee and the fiscal laws may be correctly applied. Hard cases which can be properly categorized as belonging to a class, can thus be given the benefit of relaxation of law by issuing circulars binding on the taxing authorities (p. 895) The Supreme Court in this judgment, which is clear from the paragraph quoted above, held in no uncertain terms that (a) The authorities responsible for administration of the Act shall observe and follow any such orders, instructions and directions of the Board: (b) such instructions can be by way of relaxation of any of the provisions of the section specified therein or otherwise (c) the Board has power inter alia, to tone down the rigour of the law and ensure a fair enforcement of its provisions by issuing circulars in exercise of its statutory powers under section 119 of the Income-tax Act (d) the circulars can be adverse to the Income-tax Department, but still, are binding on the authorities of the income-tax Department, but cannot be binding on assessee, if they are adverse to assessee; Printed from counselvise.com 32 BMA Nos. 4, 5, 6 & 7/Mum/2023 (e) the authority, which wields the power for its own advantage under the Act, has a right to forego the advantage when required to wield it in a manner it considers just by relaxing the rigour of the law by issuing instructions in terms of section 119 of the Act. This judgment leaves no room to doubt that the Tribunal was right in holding that the Income-tax authorities could have not selected the case for detailed scrutiny in view of the circular issued by the Board.” 32. Similarly, we refer to the decision of the Hon‟ble Orissa High Court in the case of ACIT vs. M/s. Serajuddin & Co. (supra) wherein the Hon‟ble High Court held as under: “24. The above manual is meant as a guideline to the AOs. Since it was issued by the CBDT, the powers for issuing such guidelines can be traced to Section 119 of the Act. It has been held in a series of judgments that the instructions under Section 119 of the Act are certainly binding on the Department. In Commissioner of Customs v. Indian Oil Corporation Ltd. 2004 (165) E.L.T. 257 (S.C.) the Supreme Court observed as under: \"Despite the categorical language of the clarification by the Constitution Bench, the issue was again sought to be raised before a Bench of three Judges in Central Board of Central Excise, Vadodara v. Dhiren Chemicals Industries: 2002 (143) ELT 19 where the view of the Constitution Bench regarding the binding nature of circulars issued under Section 37B of the Central Excise Act, 1944 was reiterated after it was drawn to the attention of the Court by the Revenue that there were in fact circulars issued by the Central Board of Excise and Customs which gave a different interpretation to the phrase as interpreted by the Constitution Bench. The same view has also been taken in Simplex Castings Ltd. v. Commissioner of Customs, Vishakhapatnam 2003 (5) SCC 528. The principles laid down by all these decisions are: (1) Although a circular is not binding on a Court or an assessee, it is not open to the Revenue to raise the contention that is contrary to a binding circular by the Board. When a circular remains in operation, the Revenue is bound by it and cannot be allowed to plead that it is not valid nor that it is contrary to the terms of the statute. (2) Despite the decision of this Court, the Department cannot be permitted to take a stand contrary to the instructions issued by the Board. (3) A show cause notice and demand contrary to existing circulars of the Board are ab initio bad (4) It is not open to the Revenue to advance an argument or file an appeal contrary to the circulars.\" Printed from counselvise.com 33 BMA Nos. 4, 5, 6 & 7/Mum/2023 33. In light of aforesaid discussion and in the entirety of facts and circumstances of the case, we agree with the contentions advanced by the Ld.AR that even though the DDIT(Inv.), Unit-6(1), Mumbai has the concurrent jurisdiction as that of the AO and at the same time, as far as the matter relating to penalty amounting to Rs. 10 lakhs u/s. 43 of the Black Money Act is concerned, the DDIT(Inv.), Unit-6(1), Mumbai cannot exercise his jurisdiction and the said matter has to be necessarily handled by the regular AO in terms of the guidelines so laid down by the CBDT which are clearly binding on DDIT(Inv.), Unit-6(1), Mumbai. 34. The additional ground of appeal is thus allowed for all the impugned assessment years and the consequent levy of penalty is set- aside for want of requisite jurisdiction with DDIT(Inv.), Unit-6(1), Mumbai to levy penalty for all the assessment years. 35. In view of above, all the other grounds of appeal so taken by the assessee have become academic and the same are dismissed as infructuous. 36. In the result, all the appeals of the assessee are allowed. Order pronounced in the open court on 29-10-2025. Sd/- Sd/- [RAJ KUMAR CHAUHAN] [VIKRAM SINGH YADAV] JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 29-10-2025 TNMM Printed from counselvise.com 34 BMA Nos. 4, 5, 6 & 7/Mum/2023 Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file By Order Dy./Asst. Registrar I.T.A.T, Mumbai Printed from counselvise.com "