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2019 (10) TMI 777 - HC - Income TaxIncome Declaration Scheme, 2016 (IDS) - declaration was rejected on the ground that he had failed to pay the tax, surcharge and penalty on the undisclosed income declared by him before the due date, i.e., 30.09.2017 - HELD THAT - Once the TDS relevant for the period covered by the declaration filed under the IDS is given credit as per the CBDT s clarification itself, there is no logic as to why advance tax paid for the very same period, which has not been given credit to earlier, should not be adjusted against the amount payable under the IDS. In the case on hand, the declaration of the petitioner pertains to the assessment years 2010-11 to 2015-16. The advance tax of ₹ 1,10,000/- was paid by him for the assessment year 2013-14. Admittedly, there was no regular assessment for the said year, whereby the said advance tax could have been adjusted. Therefore, there is no logic or rationale in denying the petitioner credit of this amount while computing the amount payable by him under the IDS. The writ petition is accordingly allowed setting aside the impugned proceedings dated 06.02.2018 passed by the Principal Commissioner of Income Tax-6, Hyderabad, rejecting the declaration filed by the petitioner under the Income Declaration Scheme, 2016. The said declaration shall be considered afresh by the Principal Commissioner of Income Tax-6, Hyderabad, duly giving credit not only to the TDS but also to the advance tax paid by the petitioner for the assessment year 2013-14. This exercise shall be completed expeditiously and in any event, not later than four weeks from the date of receipt of a copy of this order, be it from whatever source.
Issues:
Challenge to rejection of declaration under Income Declaration Scheme, 2016 (IDS) due to failure to pay tax, surcharge, and penalty by the due date. Analysis: 1. The petitioner challenged the rejection of their declaration under IDS for not paying the required tax, surcharge, and penalty by the due date of 30.09.2017. The petitioner declared undisclosed income and sought credit for TDS and advance tax/prepaid tax paid, as per the IDS provisions. 2. The IDS allowed payment of tax, surcharge, and penalty in installments between 30.11.2016 and 30.09.2017. The petitioner declared undisclosed income and claimed credit for TDS and advance tax paid. After adjustments, the petitioner paid the balance amount in installments as required by the scheme. 3. The first respondent rejected the petitioner's declaration citing no provision in IDS to allow credit for prepaid taxes. The petitioner approached the Court, claiming entitlement to such credit based on the payments made. The petitioner's credit for TDS was not in dispute. 4. The first respondent contended that prepaid taxes could not be adjusted under IDS and relied on Income Tax Act provisions regarding credit for advance tax in regular assessments. The petitioner's failure to file returns for the relevant years was highlighted. 5. An additional counter-affidavit emphasized the petitioner's failure to pay advance tax under the correct head and the ineligibility to claim credit for it under IDS. The petitioner was urged to make the required payment along with interest to benefit from IDS. 6. The Court noted that the first respondent's rejection was based on the lack of provision for prepaid tax credit, not on the incorrect head under which the payment was made. The Court rejected the attempt to introduce new grounds not raised initially. 7. The Court acknowledged the petitioner's credit for TDS and the CBDT's clarification allowing such credit. The petitioner's payments were deemed sufficient to cover the liability, pending resolution on the adjustment of the advance tax paid for 2013-14. 8. Referring to a Delhi High Court case, the Court supported the adjustment of advance tax payments against IDS liabilities, as long as they were relevant to the declaration period. The Court dismissed the relevance of a different case cited by the respondents. 9. The Court allowed the writ petition, setting aside the rejection of the petitioner's declaration. The Principal Commissioner was directed to reconsider the declaration, giving credit for both TDS and the advance tax paid for the assessment year 2013-14. The decision was to be expedited within four weeks.
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