For Assessment Year 2017-18, the allegation against the respondent-assessee (wife) pertained to non-disclosure of a foreign investment in Schedule FA of her income tax return. The material on record indicated that her name appeared in the joint holding solely for administrative convenience and that the investment belonged to her husband. The husband had duly disclosed the foreign investment in Schedule FA along with his return of income.

In appeal, the Tribunal observed that the levy of penalty under Section 41 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 is discretionary. Considering the factual matrix, notably that the investment was a joint holding and had been fully disclosed by the husband, the Tribunal held that no penalty was leviable.

On further appeal, the High Court noted that the only allegation against the assessee (wife) was the non-disclosure of the investment in her Schedule FA. The record confirmed that she was merely named as a joint holder for administrative reasons and her husband had already declared the investment in his return. The Court found no infirmity in the Tribunal’s exercise of discretion and held that the issue did not give rise to any substantial question of law. There being no perversity in the decision, the appeal was dismissed.

Held: No penalty is leviable on the wife for non-disclosure of a joint foreign investment when the husband has already disclosed the same in his Schedule FA. Appeal dismissed. [In favour of the assessee]
Case Law: PCIT v. Aditi Avinash Athavankar (2025) 180 taxmann.com 476 (Bom.)