Section 41 of Black Money (undisclosed foreign income and assets) act, 2015 empowers AO to levy penalty three times of the tax computed on undisclosed income or acquired assets that come into notice of tax authorities anytime after july1, 2015. Likewise a resident may run into section 43 penalty of flat Rs. 10 lacs for failure to furnish in his return of income an information or particulars about an asset (including financial interest in any entity) located outside India.
The High Court in [2023] 459 ITR 381 (Mad) directed the AO not to take any coercive measures including penalty impose until disposal of appeal by the Commissioner (Appeals) no matter any limitations of any sort in the Act.
As justice must prevail for every law therefore in the right course thus decision is a reminder to the government to bring out an amendment in section 47 in the line with section 275 of the Income tax Act as even the approaches and process in the two laws are somewhat inter related with concurrent assessing jurisdictions.