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The holder of an previous, undisclosed offshore checking account that continues to exist after 2015 would understandably discover himself on the unsuitable facet of regulation for having didn’t report it and are available clear by paying tax. However what about accounts which had been closed and ceased to exist earlier than 2015? Can cash that was mendacity in such an account be introduced below tax?
The purpose was raised by senior advocate Percy J Pardiwalla whereas representing one Rashesh Manhar Bhansali who, in line with intelligence inputs obtained by the I-T division, had operated two undisclosed financial institution accounts which had been closed in October 2008 and Could 2011. Bhansali had appealed earlier than the Earnings tax Appellate Tribunal difficult the order of the Commissioner of IT (Appeals). When requested whether or not he or his relations personal any offshore corporations or financial institution accounts, Bhansali had denied.
Nonetheless, in line with ITAT, below the black cash regulation what’s related is the date on which the tax assessing officer notices the acquisition by an assessee of undisclosed property positioned exterior India. Thus, “it’s immaterial as as to whether it existed on the level of time of taxation, or, for that goal, even on the level of time when the provisions of the BMA got here into existence,” stated the ITAT Mumbai bench comprising Pramod Kumar (vice-president) and Ravish Sood (judicial member), in its ruling on November 2, 2021. ITAT upheld the tax division’s stand.
In keeping with sections within the authorized circle, this provision of the regulation once more may come below authorized scrutiny in future as Article 20 of the Structure states that one can’t be punished below a regulation which didn’t exist on the time the offence was dedicated. The Black Cash regulation was handed to beat the restrictions in current statutes just like the Earnings tax Act, and tax undisclosed funds parked in overseas financial institution accounts and infrequently held by means of discretionary trusts.
Considerably, summons issued by the investigation wing of the I-T division has requested many who’ve been named within the Pandora papers to share particulars of financial institution accounts which now not exist and companies that had been dissolved. In keeping with tax practitioners, within the run as much as the passage of the Black Cash Act and negotiations with numerous tax haven jurisdictions for getting into into information-sharing pacts, many had closed their overseas financial institution accounts.
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