Assessment of Other Person — Black Money Act | Savlana Init

Black Money Act · Other Person

Black Money Act — Other Person Assessment — Third-Party. Specialist Defence.

Assessed as the beneficial owner or representative assessee of an undisclosed foreign asset under the Black Money Act? We analyse the Section 5 or Section 6 assessment basis, challenge beneficial ownership on facts and law, and represent you before the Assessing Officer.

The Black Money Act extends beyond the direct holder of an undisclosed foreign asset. Section 5 allows assessment of the beneficial owner — the person who effectively controls and benefits from the asset even if it stands in another person's name. Section 6 allows assessment of a representative assessee — a legal heir, administrator, guardian, or manager — where the actual taxpayer has died, become insolvent, is a minor, or cannot be found. These provisions reflect the economic substance principle: beneficial interest, not nominal title, determines the tax obligation.

The department typically relies on FATCA/CRS data identifying the controlling person of a foreign account, power of attorney arrangements, funding analysis (tracing which Indian resident provided the funds to acquire the foreign asset), and treaty exchange information. Legal heir assessments arise after the death of a person believed to have held undisclosed foreign assets — the heir inherits both the assets and the tax obligation, but only to the extent of the inherited assets.

Challenging an other-person assessment requires both a factual dismantling of the beneficial ownership allegation and a legal analysis of whether Sections 5 and 6 conditions are met on the specific facts. We provide specialist advisory and representation in these proceedings.

Our Other Person Assessment Services

Section 5 Beneficial Owner Assessment Response

Response to assessments alleging beneficial ownership — challenging control, funding, and benefit elements the department must establish.

Section 6 Representative Assessee Proceedings

Advisory and representation where a legal heir, administrator, or guardian is assessed in the deceased taxpayer's place.

Beneficial Ownership Factual Analysis

Detailed analysis of the alleged beneficial ownership — control, funding source, benefit, and any formal nominee documentation.

Section 10 Notice Reply — Third Party

Comprehensive reply challenging the third-party assessment basis and the characterisation as beneficial owner or representative assessee.

Legal Heir Black Money Act Advisory

Advisory for legal heirs of deceased taxpayers with undisclosed foreign asset exposure — scope of liability and available defences.

Controlled Foreign Entity Advisory

Advisory where the department alleges beneficial ownership of a foreign company, trust, or foundation — analysing the control and benefit tests.

Assessment Hearing Representation

Oral and documentary submissions challenging the beneficial ownership allegation before the Assessing Officer.

Appeal Against Other Person Assessment

Section 15 CIT(A) and Section 16 ITAT appeals against adverse other-person assessment orders.

Our Process

Assessment Basis Analysis

The basis of the third-party assessment is analysed — the alleged ownership connection, nominee arrangement, or representative assessee classification.

Factual Investigation

Control, funding, benefit, and documentation related to the foreign asset reviewed — to determine whether beneficial ownership allegation can be factually rebutted.

Legal Strategy

Sections 5 and 6 conditions assessed against specific facts — jurisdictional challenges and factual defences identified.

Reply & Hearing

Comprehensive reply filed. CA attends hearing with oral and documentary submissions challenging the beneficial ownership allegation.

Post-Order Appeal

Assessment order reviewed immediately — Section 15 appeal filed within 45 days if adverse.

Why It Matters

✓Beneficial ownership allegation analysed — factual basis challenged before reply

✓Control, funding, and benefit elements rebutted where evidence supports

✓Legal heir liability scoped — inherited assets vs. personal assets distinguished

✓Controlled foreign entity ownership test applied to specific facts

✓Section 10 notice reply specific and legally grounded

✓Assessment hearing attended with specialist representation

✓Section 15 appeal filed within 45 days of adverse order

✓ITAT appeal under Section 16 for ongoing disputes

Frequently Asked Questions

Section 5 allows assessment of the beneficial owner of a foreign asset — the person with actual control and benefit — even if the asset is in another person's name. Section 6 allows assessment of a representative assessee (legal heir, administrator, guardian) in place of a deceased, insolvent, or incapacitated actual taxpayer.

Beneficial ownership is determined by substance over form — who funded the asset, who has control and power of disposal, who receives economic benefit, and whether formal documentation (power of attorney, nominee agreement, trust declaration) evidences the arrangement.

A legal heir is liable as representative assessee under Section 6 — but only to the extent of assets inherited from the deceased. Personal assets beyond the inheritance are not at risk. If the undisclosed foreign assets are part of the inheritance, their full value is within scope.

Yes. Where an Indian resident effectively controls and benefits from a foreign company, trust, or foundation, those entity assets can be treated as the resident's undisclosed foreign assets — assessed in the resident's hands as beneficial owner under Section 5.

The same 90% penalty (27% of asset value) under Section 41 applies to other-person assessments — plus criminal prosecution risk under Sections 49 and 50 if the assessed person was knowingly involved in the concealment.

Yes. The department must establish: the existence of the undisclosed asset; the connection between the person assessed and the asset; and that Section 5 or 6 conditions are met. If any element is not established, the assessment is without jurisdiction and can be challenged.

Assessed as a beneficial owner or representative assessee under the Black Money Act?

We analyse the third-party assessment basis, challenge beneficial ownership on facts and law, prepare the reply, and represent you before the officer and in appeal.