Brainstorming underway at highest echelons of India’s tax admin to figure out ways to deal with 'retrospective’ character of black money law
tax administration, a brainstorming is underway to figure out ways to deal with the ‘retrospective’ character of the Black Money law — a disputed feature of the stern statute that was passed nearly a decade ago to overcome the limitations of the Income Tax Act and target wealth stashed abroad.
In the past few years, hundreds of writ petitions have been filed in multiple high courts of the country, challenging the sweeping power of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act (BMA) that empowers the taxman to go after foreign bank accounts and assets which were opened or acquired years ago but discovered only recently by the I-T department.
The petitions before the court have questioned whether a law — that could put the offender behind bars for 7 years — can be used to punish someone for an offence that was committed when the specific law did not exist. Such a safeguard allowed under the Constitution has put the powerful BMA in a limbo, with some of the courts granting stay, the tax office unable to recover money in many cases, and several assessments coming to a halt.
“There is a feeling that this situation should be addressed. Discussions are on and some of the external tax experts and former ITAT members have been asked to share their views. The CBDT and the government want to be well-prepared in handling the legal issues,” a senior person in the tax administration told ET. (ITAT or I-T Appellate Tribunal is a quasi-judicial body and CBDT, or the Central Board of Direct
