Assessee failed to comply with S. 142(1) Notice & Consent Form for alleged holding of Swiss Bank Account: Delhi HC upholds Income Tax Penalty [Read Order]

A division bench of the Delhi High Court, holding that no Prejudice would be caused if the assessee complies with section 142(1) notice and the Consent Form for the alleged holding of the Swiss Bank Account in HSBC Bank, upheld the validity of income tax penalty.

Based on the documents received from French official sources, the department of the AO formed an opinion that the Appellant-assessee was an account holder no.2 of a Swiss Bank account in HSBC Bank. The assessee was asked to produce required details of the bank account along with an alternative notice calling upon her to co-operate and, inter alia, fill a consent-cum-waiver form. The form requires the Appellant-assessee’s consent to enable the tax authorities to obtain information from Swiss Bank in respect of bank accounts held there. Accordingly, an order was passed against the assessee.

The Appellant-assessee contended that she was ever an account holder in the Swiss banks.

Earlier, the ITAT in the impugned orders has followed the decision of this Court in the case of Mr. Sanjay Dalmia in ITA Nos.339-345/2018 wherein penalty u/s 271(l)(b) of the Act was upheld for all seven years arising out of the same search, relating to the same bank account and for the same reason of not filing the consent letter.

A division bench comprising Justice Manmohan and Justice Sudhir Kumar Jain observed that in the case of Mr. Sanjay Dalmia, the Special Leave Petitions filed against the aforesaid orders being SLP(C) Nos. 15828-15829/2018 were dismissed by the Supreme Court.

In any event, this Court is of the opinion 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) of the Act and filled the consent form. Moreover, it cannot be that penalty is upheld with regard to the attorney holder (Mr. Sanjay Dalmia) of the Swiss bank account and not with regard to the account holder no.2 (Appellant-assessee) qua the same bank account.

Upholding the penalty proceedings, the bench said “In these circumstances, no question of law arises of consideration and the penalty imposed upon the Appellant cannot be held to be erroneous and unwarranted. Accordingly, the present appeals are dismissed.”

MRS. JAYANTI DALMIA vs DY. COMMISSIONER OF INCOME TAX

CITATION: 2022 TAXSCAN (HC) 213

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.