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

Mr. Raghav holds an undisclosed asset abroad through a nominee, Mr. Sethi, who holds it on Raghav's behalf. As per section 14 of the Act, which statement is correct?

Direct assessment of Raghav is not barred. Section 14 provides that the Chapter does not prevent direct assessment of, or recovery from, the person on whose behalf or for whose benefit the undisclosed foreign asset is held, even if a nominee holds it.

  1. AOnly the nominee can be assessed; Raghav cannot be assessed directly
  2. BThe Chapter does not bar direct assessment of Raghav, on whose behalf or benefit the asset is held, or recovery of tax from himCorrect
  3. CRaghav can be assessed only after the nominee's assessment is set aside
  4. DRecovery is possible only from the nominee

Explanation

Section 14 says nothing in the Chapter prevents direct assessment of the person on whose behalf or for whose benefit the asset is held, or recovery of tax from that person. So Raghav can be assessed directly, which makes the nominee-only options wrong.

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