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

Under section 14 of the Black Money Act, 2015, what is the effect of the Chapter's provisions on assessing a person on whose behalf or for whose benefit an undisclosed foreign asset is held?

Section 14 provides that nothing in the Chapter bars direct assessment of the person for whose benefit the undisclosed foreign income is receivable or the asset is held, nor recovery of tax or other sums from that person, so both remain open to the department.

  1. AThe person cannot be assessed directly once the legal holder is assessed
  2. BDirect assessment of that beneficiary person, or recovery of tax from him, is not barredCorrect
  3. COnly the legal holder can ever be assessed, never the beneficiary
  4. DRecovery from the beneficiary is allowed but direct assessment is barred

Explanation

Section 14 says nothing in the Chapter prevents direct assessment of the person on whose behalf or for whose benefit the undisclosed income or asset is held, or recovery from that person of tax or other sums. Hence both direct assessment and recovery remain available, which rules out the options that bar either.

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