No prejudice is caused if a person complies with sec. 142(1) Notice: HC

Case Details: Mrs Jayanti Dalmia v. DCIT - [2022] 139 taxmann.com 54 (Delhi)

Judiciary and Counsel Details

• • Manmohan & Sudhir Kumar Jain, JJ.
  • Ramesh Singh, Sr. Adv., Ms Shreya Jain & Gaurav Tanwar, Advs. for the Appellant.
  • Ajit Sharma, Sr. Standing Counsel for the Respondent.

Facts of the Case

The Assessing Officer (AO) had received documents from the French official sources, indicative of the fact that the assessee was an account holder no. 2 of a Swiss Bank account in HSBC Bank.

The assessee was requested to furnish the details of the account opening form, complete bank statements, and residential status as on the date of opening of such foreign Bank Accounts. The assessee was also served with a notice calling upon her to co-operate and fill a consent-cum-waiver form to enable the tax authorities to obtain information from the Swiss Bank.

The assessee submitted that she was not obliged to fill such consent form as she had no connection with the foreign bank accounts. She further submitted that to ask the Appellant-assessee to furnish a consent letter is violative of Article 21 of the Constitution of India.

Since the assessee didn’t comply with notice section 142(1), the AO levied penalty under section 271(1)(b). CIT(A) and Tribunal upheld the order of AO. Aggrieved-assessee filed the instant appeal before the Delhi High Court.

AAR Held

The Delhi High Court held that if the assessee really had no connection with the Swiss Bank accounts, no prejudice would have been caused to her if she had complied with the notice under section 142(1) and filled the consent form.

Therefore, no question of law arises of consideration in the given case and the penalty imposed upon the assessee cannot be held to be erroneous and unwarranted.

List of Cases Reviewed

• • Selvi v. State of Karnataka [2010] 7 SCC 263 (para 8) distinguished.

List of Cases Referred to

• • Selvi v. State of Karnataka [2010] 7 SCC 263 (para 4)
  • Sanjay Dalmia v. Pr. CIT [SLP (C) Nos. 15828 – 15829 of 2018, dated 10-7-2018] (para 6).