Penalty for non filling consent form to enable tax authorities to obtain information from Swiss Banks – Supreme Court dismissed review Petition by asessee
ABCAUS Case Law Citation:
ABCAUS 2525 (2018) 09 SC
The assessee was served with a notice u/s 142(1) of the Income Tax Act, 1961 (the Act) by the Income Tax Authorities. The notice was served on the basis of documents received from French official source indicative of the fact that the assessee was an attorney holder of a Swiss Bank account holder in HSBC Bank.
The notice called upon the assessee to co-operate and, inter alia, fill a consent-cum-waiver form which required the assessee’s consent to enable the tax authorities to obtain information from Swiss Banks in respect of bank accounts held there.
The assessee denied that he was ever an attorney and stated that he was not obliged to fill such consent form as he was in no way involved in those transactions or that he had no connection with the Bank accounts.
The Assessing Officer (AO) was of the opinion that having regard to the nature and contents of the form, the assessee could not have refused to answer the notice under Section 142(1) of the Act and therefore he invoked the penal clause under Section 271(1)(b) of the Act. The appellate authorities including the ITAT upheld the imposition of the penalty.
The matter travelled to the High Court where the assessee submitted that the action of the Revenue authorities was utterly unwarranted, that unless there was some credible material or information requiring the Revenue’s further investigations with respect to the assessee’s complicity, there was no question of compelling him to answer to the letters and also submit the consent form under Section 142(1) of the Act.
It was submitted that in the course of the search, no incriminating material was, in fact, seized from the assessee and therefore the penal consequence heaped upon him, was without authority of law.
However, the High Court was of the view that if the assessee really had no connection with such accounts, no prejudice could really have ensued to him if he would have complied with the notice under Section 142(1) of the Act and filed the consent form. Accordingly the Hon’ble High Court dismissed the appeal.
Aggrieved by the judgment of the High Court, the assessee filed Special Leave Petitions before the Hon’ble Supreme Court which were however dismissed by a non speaking order.
The assessee did not give up and filed a Review Petition before the Hon’ble Supreme Court. Their Lordships categorically held that they did not find any merit in the review petitions. Accordingly, the review petitions were also dismissed.