The Supreme Court on Tuesday admitted the earnings tax division’s enchantment questioning its settlement fee’s (the Income Tax Settlement Commission) powers to entertain instances associated to black cash in international nations held by NRIs.
British Virgin Islands agency Overseas Pearl (OPL), belonging to UAE residents Vimal Ok Patel, Samir Ok Patel and Mehul Ok Patel, was named within the 2016 Panama papers expose. The three brothers are additionally the promoters of Vadodara-based Banco Products, the mother or father firm of OPL. The assessees by no means disclosed any international earnings or asset, together with international financial institution accounts, of their tax returns although they had been tax residents in India from 2005-06 to 2013-14, in keeping with the division.
Challenging the Gujarat High Court’s judgment that upheld the jurisdiction of the Income Tax Settlement Commission to entertain the case of black cash in international nations held by Patels, the I-T division advised the apex court docket that the Commission lacked jurisdiction over the issues the place proceedings had been initiated below the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
A Bench led by justice DY Chandrachud issued discover to the settlement fee and the three Patel brothers on the I-T’s plea alleging that Patels being the house owners of the agency had been liable to motion below the 2015 Act, and the Commission had no energy to settle the problem because the black cash legislation bars it from settling the matter below the I-T Act.
It stated that the Black Money Act being a particular laws would prevail over the I-T Act for the aim of evaluation of undisclosed-foreign earnings and belongings. “As far as domestic income and assets are concerned, it is the I-T authorities who have the jurisdiction; however, in case of undisclosed foreign income or assets, it is the authorities appointed under the Black Money Act who have the jurisdiction,” the enchantment said.
“The HC has also failed to appreciate that the legislature specifically intended for retrospective applicability of the amendment by “providing that the amendments shall be applicable with effect from July 1, 2015, which is the date of coming into force of the Black Money Act”, it stated.
The division had raided the premises of Banco Products in 2016 and whereas the search and seizure operations had been below method, Patels moved the Commission disclosing greater than Rs 100 crore mendacity in varied nations, together with Singapore, Zurich and Dubai. They later disclosed extra earnings and supplied to pay tax on greater than Rs 129.1 crore of undisclosed cash earlier than the Commission in July 2017. In January 2019, the Commission ordered the house owners to pay the division inside a yr in 4 instalments. On enchantment, the HC dismissed the Revenue’s enchantment towards its Settlement Commission’s order.
The division stated that the HC had failed to understand that the proceedings below Black Money had been nonetheless pending in case of all of the three assesses whereas deciding that the retrospective modification made in part 2(2) of the Black Money Act is not going to have an effect on its case as their proceedings have already attained finality below the I-T legal guidelines.