2017 (5) TMI 845 - HC - Income Tax

Benefit of Income Declaration Scheme, 2016 - Whether the IDS, 2016 is a self contained code and can the designated authority go beyond the scope and mandate of the same? - Held that - It will not be out of place to mention here that in the taxing statutes, the Court has to be very slow in interpreting the statutes where intention of the legislature is to curb the evasion of tax. This is a peculiar case where the Government has granted the benefit under the scheme only to the persons who are not covered under Section 132 of Act and other proceedings. If the class which has been debarred under the scheme and any person acquiring the same debar during the scheme can be granted the benefit of the scheme, the answer in is No . The terms are not which are prohibited by law prior to launching of the scheme. If anybody acquired any disqualification during the scheme, has to be treated equal otherwise that will create two class. The scheme of 2016 will not override the provisions of the Income Tax Act and the scheme which has come by way of limited purpose cannot prevail over the Income Tax Act. In that view of the matter, the order passed by designated authority is just and proper. We are in complete agreement with the view taken by the learned Single Judge.

Summary

Issues: Challenge to judgment dismissing writ petition regarding non-granting of benefits under Income Declaration Scheme, 2016.

Analysis:
1. The appellant, an assessee, challenged the respondents' action of not granting him benefits under the Income Declaration Scheme, 2016, launched by the Central Government. The appellant applied for the scheme before 30.09.2016, contending he should be covered under clause 196(e)(ii) of the scheme, which excludes individuals under Section 132 proceedings before 01.06.2016.

2. The appellant argued that since the search proceedings under Section 132 were initiated post-scheme launch and clause (ii) pertains to pre-scheme launch, the authority misinterpreted the provisions, depriving the appellant of his rights. The appellant's earlier writ petition challenging the authority's order dated 03.10.2016 was dismissed by the Single Judge.

3. The appellant raised questions on the scheme's scope, correct interpretation of clause 196(e)(ii), the scheme's superiority over the Income Tax Act, and the authority's discretion in interpreting the statute's aims. The appellant argued that the scheme's language does not allow declarations if Section 132 proceedings start after 01.06.2016.

4. The Court emphasized caution in interpreting tax statutes to prevent evasion. It noted the scheme only benefits those not covered under Section 132 proceedings. The Court held that the scheme cannot override the Income Tax Act and a limited-purpose scheme cannot prevail over the Act. The Court upheld the Single Judge's decision, dismissing the appeal for lack of merit.

5. The Court rejected the appellant's request for a certificate under Section 134A, stating the matter was not of general importance and the interpretation provided covered the issue comprehensively. The appeal was dismissed, affirming the Single Judge's decision.