2024 (10) TMI 1084 - AT - Income Tax

Undisclosed income declaration made under Income Declaration Scheme-2016 - subsequent non-payment of the declared amount within the stipulated period . HELD THAT - In the instant case, the assessee made declaration of the undisclosed Income for A.Y. 2012-13 by clubbing the income for A.Y. 2010-11, 2011-12 and 2014-15. The principal commissioner specified the amounts to be paid by the assessee as tax, surcharge and penalty and the date and percentage of amount was to be deposited in three instalments as stated hereinbefore. The assessee, made default of payment in the payment of third instalment and could not pay by or before 30.09.2017, which was the stipulated date under the scheme and initial notifications. However notification dated 13.02.2019 was issued by the Central Government and extended date of payment of such amount till 31.01.2020, along with interest on such amount @1% for every month. The notification was brought into force with effect from 01.06.2016 retrospectively. Assessee paid the balance tax along with interest as per CBDT e-receipt for e-tax payment. Thus, we hold that the assessee has validly deposited the tax, surcharge, interest, penalty as required under IDS-2016 r/w notification dated 13.12.2019. CIT(A) has failed to appreciate that the default made by assessee in the part payment stood rectified retrospectively in view of notification dated 13.12.2019. In view of what we have held hereinabove, the main issue framed for consideration is thus determined in favour of the assessee and against the revenue.

Summary

Issues:
Reopening of assessment for A.Y. 2012-13 based on undisclosed income declaration made under Income Declaration Scheme-2016 and subsequent non-payment of the declared amount within the stipulated period.

Detailed Analysis:

1. Background and Assessment Reopening:
The appeal was against an order passed by the Ld. Commissioner of Income-tax(Appeals) partially allowing the assessee's appeal against the assessment order for A.Y. 2012-13. The assessee had declared undisclosed income under the Income Declaration Scheme-2016 but failed to pay the full tax liability within the specified period. Consequently, the assessment for A.Y. 2012-13 was reopened under section 147(b) of the Income-tax Act.

2. Non-Payment and Assessment Proceedings:
The assessee failed to pay the full tax liability within the stipulated time frame, leading to the cancellation of the declaration under IDS-2016. The assessing officer added the undisclosed income amount to the assessee's total income, resulting in a dispute and subsequent appeal before the CIT(A).

3. CIT(A) Decision and Appellate Tribunal's Analysis:
The CIT(A) partly allowed the assessee's appeal, granting credit for taxes paid under IDS-2016 but upholding the addition of the undisclosed income amount. The Tribunal analyzed the case, considering the retrospective effect of a notification extending the payment deadline and interest provisions for the undisclosed income. The Tribunal found that the assessee had rectified the default by paying the balance tax along with interest within the extended period.

4. Legal Interpretation and Precedents:
The Tribunal referred to the Income Declaration Scheme-2016 and relevant notifications, emphasizing the non-reopening clause for tax paid under the scheme. It highlighted a Supreme Court judgment regarding adjustments in tax liability post-revised assessment, distinguishing it from the current issue of payment deadline extension.

5. Tribunal's Decision and Conclusion:
The Tribunal held that the assessee had validly deposited the tax, surcharge, interest, and penalty as required under IDS-2016 in compliance with the retrospective notification extending the payment deadline. Consequently, the Tribunal allowed the appeal, quashing the reopening of assessment and the assessment order based on the undisclosed income addition.

6. Final Verdict:
The Tribunal set aside the impugned order, ruling in favor of the assessee and against the revenue. The reopening of the assessment and the subsequent assessment order were deemed bad in law and were therefore quashed.

This detailed analysis outlines the key legal issues, procedural steps, judicial interpretations, and the final decision of the Appellate Tribunal in the case concerning the undisclosed income declaration and payment compliance under the Income Declaration Scheme-2016 for A.Y. 2012-13.