s.72(c), BMA 2015 — Deemed year of acquisition of a pre-commencement foreign asset

Currently operative

A transitional provision tied to the declaration window that closed on 30 September 2015. Because it applies wherever no declaration was made in that window, it governs every undeclared pre-2016 foreign asset permanently.

Income-tax Act, 1961

s.72(c), BMA 2015

Income-tax Act, 2025

Unaffected; transitional provision of the 2015 Act

In force from 1 April 2026, but s.536(2)(c) preserves the 1961 Act for tax years beginning before that date.

In short

Section 72(c) of the Black Money Act declares that where an asset was acquired or made before the Act commenced, and no declaration in respect of it was made under Chapter VI, the asset is deemed to have been acquired or made in the year in which a notice under section 10 is issued by the Assessing Officer, and the provisions of the Act apply accordingly. Two conditions must be satisfied: pre-commencement acquisition, and no declaration in the 2015 window. The Karnataka High Court in Hind Sennoun v. Union of India, WP No. 16540 of 2021, decided 16 September 2026, gave the fiction full effect, holding it to be self-executing and conclusive, and held that the deemed acquisition pertains to the previous year so that the assessment falls in the assessment year immediately following. A notice of 4 December 2018 therefore produced AY 2019-20, and the assessment framed for AY 2018-19 was quashed as without jurisdiction. That Court expressly left the contentions on section 3 and its proviso open, so it is not authority that section 72(c) prevails over the proviso. The Kolkata Bench of the Tribunal takes a different view, holding that the fiction cannot override the charging provision and that the proviso to section 3(1), which turns on when the asset came to the Assessing Officer's notice, fixes the year instead.

What the provision does

Deems a pre-commencement foreign asset, undeclared in the 2015 window, to have been acquired in the year the section 10 notice issues, and so supplies the year of charge.

Threshold questions

Was the asset acquired before the Act commenced
Was any declaration made under Chapter VI in the 2015 window, which excludes the fiction
What is the date of the first notice under section 10(1)
Is the assessment year the year following the deemed year, rather than the deemed year itself
Where a declaration was made but the tax was not paid in time, does section 72(b) govern instead

The recurring disputes.

Whether section 72(c) or the proviso to section 3(1) fixes the year

The proviso turns on the asset coming to the notice of the Assessing Officer; section 72(c) turns on the issue of a notice under section 10. Those events are often years apart. The Kolkata Bench held in Ajay Kumar Patel and Mita A Patel that the fiction cannot override the charge, and Ranchi has followed. The Karnataka High Court applied section 72(c) without reference to those orders, and left the contentions on the proviso expressly open.

The proviso to section 2(2) cuts against the widest reading

For the purpose of identifying the year in which an undisclosed foreign asset was acquired, the proviso to the substituted section 2(2) requires section 72(c) to be disregarded. Parliament has therefore switched the fiction off expressly in one place, which is difficult to reconcile with treating it as a universal rule elsewhere.

Use of the fiction to found criminal liability

The Karnataka High Court held in Dhanashree Ravindra Pandit that section 72(c) cannot be used to create criminal liability for a pre-commencement return consistently with Article 20(1). The Supreme Court granted leave on 23 August 2024, recorded that no challenge to the validity of section 72(c) had been made before the High Court, and stayed that finding. The appeal is understood to remain pending.

Frequently asked.

What does section 72(c) of the Black Money Act deem?

It deems an asset acquired before the Act commenced, in respect of which no declaration was made in the 2015 compliance window, to have been acquired in the year in which a notice under section 10 is issued. The purpose was transitional: the window closed on 30 September 2015, and the provision supplies a year of charge for assets that were not declared in it. Because the condition is simply that no declaration was made, the fiction attaches permanently to every undeclared pre-2016 foreign asset, which is why a provision in a chapter headed Removal of doubts now decides most disputes under the Act.

Which assessment year follows from a section 10 notice?

On the Karnataka High Court's construction in Hind Sennoun, the year of the notice is the previous year, so the assessment falls in the assessment year immediately succeeding it. The Mumbai Bench in Anandi Kaushik Laijawala and the Chennai Bench in Elangovan Malarmangai reached the same conclusion. No decision holds that the assessment year is the same year as the notice, which is what Assessing Officers have repeatedly done, and every reported instance of it has been quashed. The Kolkata Bench differs on which event fixes the previous year, but not on the proposition that the assessment year is the year after it.