New Delhi, July 16 -- The Chennai bench of the Income Tax Appellate Tribunal (ITAT) has deleted a Rs.10 lakh penalty imposed under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, holding that a genuine failure to disclose foreign employee stock option (ESOP) shares in the Schedule Foreign Assets (FA) of an income tax return cannot automatically attract penal action.

The ruling came in the case of Kishore Kumar Rajagopal vs DDIT (Investigation), where the tribunal observed that the taxpayer had already paid tax on the ESOPs and there was no evidence of any attempt to conceal foreign assets or evade taxes.

The taxpayer had received ESOPs of Vedanta Resources Plc (UK) while working abroad with Vedan...