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CMA Final · Direct Tax Laws and International Taxation · Black Money Act, 2015

A false statement on oath is made by a noticee, Mr. Iyer, objecting to a notice under section 32(4) of the Black Money Act, 2015. On the notice date he owed the assessee Rs 6,00,000, and the assessee's tax arrear is Rs 4,50,000. If the statement is found false, to what extent is Mr. Iyer personally liable?

Mr. Iyer is liable for Rs 4,50,000. Section 32(10) caps the personal liability of a person whose oath statement is false at the lesser of his liability to the assessee on the notice date and the assessee's liability under the Act, which is the arrear of Rs 4,50,000.

  1. ARs 6,00,000
  2. BRs 4,50,000Correct
  3. CRs 1,50,000
  4. DRs 10,50,000

Explanation

Section 32(10) makes the person personally liable to the extent of his own liability to the assessee on the notice date or the assessee's liability for the sum due, whichever is less. Rs 4,50,000 is lower than Rs 6,00,000, so the liability is Rs 4,50,000. Rs 6,00,000 ignores the lower-of rule, and the other options are arbitrary.

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