The Pune Bench of the Income Tax Appellate Tribunal has ruled that the Black Money (Undisclosed Foreign Income and Assets) Act, 2015 applies only in the year when a foreign asset first comes to the Assessing Officer’s knowledge, rather than the year in which the transaction took place. The Bench of Vinay Bhamore (Judicial Member) and Dr. Manish Borad (Accountant Member) delivered the order while partly allowing the appeal of Shaista Suhel Patanwala.
The case involved alleged undisclosed credits in a Fiji-based Westpac Bank account totaling ₹86,80,289 received between 13 January 2017 and 31 January 2017. Although the deposits related to FY 2016–17 (AY 2017–18), the Assessing Officer became aware of the bank account only on 24 October 2017, which falls in AY 2018–19. Despite this, the AO made the addition under the Black Money Act in AY 2017–18.
The Tribunal relied on the proviso to Section 3(1) of the Black Money Act, which specifies that undisclosed foreign assets must be taxed in the year in which they first come to the notice of the AO. Since the Revenue did not dispute the discovery timeline, the Bench held that the AO had no jurisdiction to assess the Fiji account in AY 2017–18 and directed full deletion of the ₹86,80,289 addition.
On the issue of cryptocurrency, the Tribunal found that the assessee had not disclosed ₹6,99,010 earned from Bitcoin transactions on overseas platforms. It treated the amount as undisclosed foreign income taxable under the Act and confirmed the penalty of ₹10 lakh, noting that the foreign bank balance exceeded ₹20 lakh and was not reported in the income tax return.
The appeal was therefore partly allowed: the addition relating to the Fiji bank account was deleted, while the Bitcoin income and penalty were upheld.
Appearance:
Counsel for Petitioner: Kishor B. Phadke
Counsel for Respondent: Manish Kumar Sinha
Cause Title: Shaista Suhel Patanwala v. ADIT
Case No.: BMA Nos. 1 to 3/PUN/2024
Coram: Vinay Bhamore (JM), Dr. Manish Borad (AM)
