2018 (3) TMI 1160 - HC - Income Tax

Condonation of delay in payment of 3rd Instalment of the tax amount declared by the petitioner assessee under the Income Disclosure Scheme, 2016 (IDS 2016) rejected u/s 119 - Held that - This Court is of the opinion that there is no justification or reason for invoking the extra-ordinary jurisdiction of this Court under Article 226 of the Constitution for interference in the matter of relaxation or extension of time limit as prayed for and therefore the Respondent Authority was justified in rejecting the said request of the petitioner, in view of the aforesaid Supreme Court decision in the case of Hemalatha Gargya Vs. Commissioner of Income Tax (2002 (11) TMI 6 - SUPREME Court) The petitioner assessee will be free to approach the Respondent Authorities in accordance with law and the Respondent Authorities are expected to pass appropriate orders in the matter with regard to refund/adjustment of amount already deposited by the petitioner.

Summary

Issues:
1. Condonation of delay in payment of tax instalment under Income Disclosure Scheme, 2016 (IDS 2016).
2. Applicability of Section 119(2)(b) of the Income Tax Act, 1961.
3. Comparison with the decision in Hemalatha Gargya case regarding the Voluntary Disclosure of Income Scheme, 1997 (VDIS,1997).

Analysis:
1. The petitioner, M/s. Suman, filed a writ petition against the Principal Commissioner of Income Tax-5, Bengaluru, seeking condonation of delay in paying the 3rd Instalment of tax under IDS 2016. The petitioner had paid the first two instalments on time but missed the deadline for the final instalment due to an oversight. The Principal Commissioner rejected the application, citing guidelines that did not allow for condonation of the delay.

2. The petitioner argued that a similar situation was addressed by the Supreme Court in the Hemalatha Gargya case related to VDIS,1997. The Supreme Court in that case directed the Revenue Authorities to refund or adjust amounts already deposited by the assessee if the time limit could not be extended for compliance. The petitioner sought a similar consideration in this case under Section 119(2)(b) of the Income Tax Act, 1961.

3. The Respondent contended that the time period for payment could not be extended, and Section 119(2)(b) did not apply. The Court, after hearing both parties, held that there was no justification for interference under Article 226 of the Constitution. The Respondent's decision to reject the request was deemed justified, aligning with the Supreme Court's decision in the Hemalatha Gargya case. However, the Court allowed the petitioner to approach the Respondent Authorities for refund or adjustment of the deposited amount based on the principles outlined in the Supreme Court judgment.

Conclusion:
The High Court of Karnataka dismissed the writ petition, emphasizing that while the delay in payment could not be condoned, the petitioner could seek recourse for refund or adjustment of the deposited amount as per the law. The judgment highlighted the importance of adhering to statutory timelines while also recognizing the possibility for appropriate remedies in exceptional circumstances, guided by legal precedents.