| Question And Answer | |
|---|---|
| Subject: | Foreign ESPP – Summon U/S 131(1A) |
| Category: | Income-Tax |
| Querist: | Sanjeev Sharma |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | Foreign ESPP - Summon U/S 131(1A) |
| Date: | April 30, 2023 |
I have received a summon from IT India referring to undisclosed foreign assets or interest.
It does not specify any assets in specific but only assets of such nature that I have is ESPP stocks.
I left the company that gave me ESPP stock in year 2020 and missed declare ESPP stock for AY 21-22.
How do I reply to summon? Can I correct the ITR for FY 21-22 before replying?
You cannot rectify or update your return. Please check if you have disclosed these assets in your tax audit report or balance sheet submitted to the Department. Also, check if the receipt of this stock has been disclosed as income from salary in the year of receipt.
If it is not shown as income in the year of receipt, you will be faced with proceedings under Black Money Act.
If it is shown as income and tax has been paid. However, if the shares have not been disclosed in the subsequent year, there will be a penalty of Rs. 10 lakhs under section 43 of the Black Money Act. The levy of a penalty is not mandatory and if there is prior disclosure, the taxpayer can argue that it is a bona fide mistake.