Karol Bagh man had foreign bank accounts, FD in Singapore, no ITR disclosure; income tax dept sent black money notice, but ITAT Delhi cancelled the notice for this reason

Mr Trikha from Karol Bagh, Central Delhi, filed his income tax return (ITR) using form ITR-1, claiming he had a low income from other sources. However, he got a shocking black money tax notice from the Income Tax Department stating that he was engaged in business related to investments, travels and airlines, specifically Indonesian Commercial Airlines (Pacific Royale Airways).

Additionally, the Income Tax Department informed Trikha that they had uncovered information about several foreign bank accounts that he allegedly holds, including fixed deposits (FD) in Singapore. These accounts were reportedly opened between January 2017 and February 2018, primarily with the United Overseas Bank, Singapore and the Overseas Chinese Banking Corporation. Tikha, however, did not disclose any of this information in his ITR.

In response, Trikha said that he does not possess any foreign accounts or assets and does not work for Indonesian Commercial Airlines (Pacific Royale Airways). The Income Tax Assessing Officer (AO) dismissed his explanation and said that this was a fit case for non-disclosure of foreign assets under Black Money Act. So the AO valued the undisclosed assets under Section 4 and 5 of Black Money Act and valuing them at Rs 23.91 crore, imposed 30% tax on it as per Section 3(1) of the Black Money Act and interest as per Section 40.


For reference, here’s an extract of the undisclosed bank information that the tax department shared in ITAT Delhi:

However, Trikha did not accept it and informed his family, so his sister filed a complaint before Delhi Police, Economic Offences Wing (EOW). EOW registered an FIR and started investigating. After the EOW investigation was concluded, Delhi Police special cell, IFSO, Sector-16, Dwarka, New Delhi filed a charge sheet on December 31, 2021 where several persons including two chartered accountants were named.

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Advocate Mayank Patawari who represented Trikha in ITAT Delhi said that the EOW Special Court has ruled that Trikha is a victim of identity fraud. However, the Income Tax officer (AO) did not know this, and so acting solely on the information received from Singapore authorities, thought Trikha had undisclosed black money.

The Commissioner of Appeals accepted Advocate Mayank Patawari’s contentions and cancelled the black money tax notice against Trikha. However, the Income Tax Department was not satisfied and filed an appeal in ITAT Delhi. The Income Tax Department's lawyer said that Trikha has not explained how his identity was stolen and merely relied on the case filed by his sister with EOW.

S. Rifaur Rahman, accountant member and Vimal Kumar, Judicial Member of ITAT Delhi heard Trikha’s case and passed their judgement on August 11, 2026. Trikha won the case in ITAT Delhi.

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Summary of the judgement

Chartered Accountant Suresh Surana said to ET Wealth Online: In this case ([BMA No. 15/Del/2025, AY 2021-22]), the Delhi ITAT dismissed the Income Tax Department’s appeal and deleted the black money tax notice issued to Trikha.

Mr Trikha had challenged the addition before the CIT(A) and placed on record, materials concerning identity theft and fraudulent use of his identity. This included the findings of the Special Court dealing with economic offences as well as a charge-sheet filed by the Economic Offences Wing.

The material indicated that certain persons had fraudulently shown Trikha as a director of TVI Express Holidays Private Limited without his consent or authority. Trikha consistently maintained that he neither owned nor operated the foreign bank accounts attributed to him.

After examining the material, the CIT(A) accepted Trikha’s explanation and observed that Trikha had been a victim of identity theft and that the bank accounts referred to in the assessment order had been fraudulently held in his name.

When the Income Tax Department filed an appeal with ITAT Delhi, the tax tribunal (ITAT Delhi) didn’t find sufficient basis to interfere with the CIT(A)’s findings.

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Surana says that an important fact that decided the case was that Trikha’s ITRs for the preceding ten years did not indicate that he had the financial means to make investments of such magnitude outside India.

Surana says: “More importantly, Trikha had produced the relevant decision of the Special Court concerning the economic offences associated with TVI Express Holidays Private Limited.”

Thus after considering the material relied upon by the CIT(A), the ITAT Delhi observed that the Income Tax Department didn’t bring any cogent material on record to disprove those findings or establish that the foreign assets actually belonged to Trikha.

Why did Trikha win the case in ITAT Delhi?

Surana says that Trikha succeeded in ITAT Delhi because the black money case was not merely about whether foreign accounts existed; the critical question was whether those accounts and the funds therein could legally and factually be attributed to the taxpayer.

Surana says: “The evidence concerning identity theft materially undermined the Income Tax Department’s assumption of ownership.”

Once Trikha produced judicial and investigative material supporting his contention that his identity had been fraudulently used, the Income Tax Department was needed to bring convincing evidence establishing his actual ownership or connection with the alleged foreign assets.

Surana says: “The ITAT Delhi found that no such cogent contrary material had been produced.”

What does Trikha’s black money case in ITAT Delhi mean for other taxpayers?

According to Surana, this incident which happened with Trikha from Karol Bagh teaches us an important rationale that an addition under the Black Money Act cannot be sustained merely because foreign financial information associates an account with a taxpayer where credible evidence demonstrates that the taxpayer’s identity was fraudulently used.

Surana says: “There must be adequate material establishing that the taxpayer actually owned, beneficially held or was otherwise connected with the alleged undisclosed foreign asset.”

Coming to this case particularly, the evidence of identity-theft and findings of the Special Court supported Trikha’s denial, whereas the Income Tax Department failed to produce sufficient material to rebut that evidence.

The ITAT Delhi therefore upheld the CIT(A)’s deletion of the addition under Black Money Act and dismissed the Income Tax Department’s appeal.