2018 (2) TMI 1288 - HC - Income Tax

Declarations of undisclosed income - Income Declaration Scheme, 2016 - extension of time for making payment of the third installment sought - Held that - Mere involvement in office work and marketing activities cannot be a good justification and ground to seek and ask for extension of time. Assertion that the petitioners just forget to pay the third installment is unbelievable and a lame excuse. Such declarations are unique and made after due deliberation and thought. Amount payable towards the third installment was substantial. Petitioners were unable to pay the amount and thereafter have pleaded and attributed it to loss of memory. The time period fixed were mandatory and had to be adhered to. The petitioners have not made out an extraordinary case which would have justified invoking writ jurisdiction and grant of further time beyond the time, even assuming that the time stipulated under the Scheme could be extended by the Board under Section 119(2) of the Income Tax Act, 1961. If such excuses are to be accepted, then as a routine, extension of time would have to be granted. No ground and reason to issue notice in the present writ petitions.

Issues:
1. Non-payment of the third installment of tax, surcharge, and penalty under the Income Declaration Scheme, 2016.
2. Request for extension of time for payment of the third installment.
3. Rejection of the extension request by the Central Board of Direct Taxes.
4. Justifiability of reasons provided for seeking extension.
5. Consideration of writ jurisdiction for granting further time.
6. Possibility of adjustment or refund of amounts paid.

Issue 1: Non-payment of the third installment
The petitioners had declared undisclosed income under the Income Declaration Scheme, 2016 and paid 50% of the total amount payable towards tax, surcharge, and penalty. However, they failed to pay the third installment of the remaining 50% by the due date.

Issue 2: Request for extension of time
The petitioners sought an extension of time for making payment of the third installment through letters to the Chairman, Central Board of Direct Taxes, citing reasons such as being preoccupied with office activities, implementation of GST and ERP software, and marketing responsibilities.

Issue 3: Rejection of extension request
The Central Board of Direct Taxes rejected the request for extension, stating that declarants were aware of the payment schedule and had sufficient time to plan their affairs for compliance. The Board found the reasons provided insufficient to justify granting an extension beyond the due date.

Issue 4: Justifiability of reasons for extension
The court examined the reasons given by the petitioners for seeking an extension and concluded that mere involvement in office work and marketing activities did not warrant an extension. The assertion of forgetting to pay the installment was deemed unbelievable and a lame excuse, especially considering the substantial amount due.

Issue 5: Consideration of writ jurisdiction
The court determined that the petitioners did not present an extraordinary case to warrant invoking writ jurisdiction for granting further time. The mandatory time periods set by the scheme had to be adhered to, and the excuses provided were not sufficient to justify an extension.

Issue 6: Adjustment or refund of amounts paid
The court clarified that the dismissal of the writ petitions would not prevent the petitioners from filing a separate petition to challenge the provision disallowing refunds. The court did not comment on the question of adjustment or refund of the amounts paid.

In conclusion, the court dismissed the writ petitions, stating that the reasons provided did not justify interference with the impugned order and grant of extension. The court emphasized the mandatory nature of the payment schedule and the lack of exceptional circumstances to warrant further time. The possibility of seeking adjustment or refund of the amounts paid was left open for the petitioners to pursue in a separate petition.

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