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

Under section 32(9) and (10) of the Black Money Act, a person served with a notice objects by a sworn statement that he holds no money for the assessee. Later it is found that the statement was false. Which consequence follows?

He becomes personally liable to the Assessing Officer or Tax Recovery Officer. Under section 32(10), the liability extends to his own liability to the assessee on the date of the notice or the assessee's liability under the Act, whichever is less, if the sworn statement proves false.

  1. AHe is personally liable to the extent of his own liability to the assessee on the date of the notice or the assessee's liability under the Act, whichever is lessCorrect
  2. BHe is liable for the full arrear regardless of what he owed the assessee
  3. CHe is not liable because the statement was on oath
  4. DHe is liable only for a fixed fee

Explanation

Section 32(9) excuses payment if the person objects by a statement on oath that the sum is not due or he holds no money for the assessee. Under section 32(10), if the statement is found false in any respect, he is personally liable to the extent of his own liability to the assessee on the date of the notice or the assessee's liability, whichever is less. The full-arrear option ignores this cap.

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