No penalty on wife for not disclosing foreign investment if husband duly declared it in his ITR

For assessment year 2017-2018, the allegation against the respondent–assessee (wife) was non-disclosure of a foreign investment in Schedule FA with her return. The record showed that her name appeared in the investment for administrative convenience in a joint holding with her husband, and the husband had disclosed the investment in Schedule FA along with his return of income. In appeal, the Tribunal noted that levy of penalty under section Section 41 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 was discretionary and, considering that it was a joint investment and that the husband had disclosed it in his return, held that no penalty was leviable. On appeal to the High Court.

Held : The only allegation against the assessee (wife) was that she failed to disclose the foreign investment holding in Schedule FA along with her return for the assessment year 2017-18. However, the record shows that the assessee was only named in the investment holding made by her husband for administrative convenience. The record bears out that the assessee’s husband had declared the said investments in Schedule FA along with his return of income.
The Tribunal has held that the levy of penalty is at the discretion of the authorities. After taking into consideration the circumstances, that this was a case of joint investment by the husband and the wife, and the husband had clearly disclosed this investment in his return of income, no penalty came to be levied. The above situation, which is mainly the result of the exercise of discretion, does not give rise to any question of law. This is not a case of any perversity in the exercise of discretion. Accordingly, on the ground that this appeal involves no substantial question of law, this appeal is dismissed.

[In favour of assessee]
(Related Assessment year ; 2017-18) – [PCIT v. Aditi Avinash Athavankar (2025)]