9911796707
TMI Blog2017 (4) TMI 359X X X X Extracts X X X X X X X X Extracts X X X X ..... ication by the Revenue, that credit for TDS paid, can be enjoyed for availing the benefit (under the scheme in question) precludes any meaningful argument by it that advance tax payments relative for the assessment years covered by the declaration cannot be taken into consideration as payments under and for purposes of availing the benefits of the scheme. Thus the petition has to succeed. Accordingly a direction is issued to the respondents to process the petitioner’s application under the IDS, 2016, and give adjustment or credit to the amounts paid as advance tax and TDS to its account, under the Income Tax Act, and accept the balance amounts (after also giving credit to the amounts paid during the interregnum, pursuant to the interim order of this court dated 29th November, 2016). The respondents shall ensure that the petitioner’s payments and declarations are processed in accordance with the IDS, 2016. - W.P.(C) 11216/2016 - - - Dated:- 30-3-2017 - MR. S. RAVINDRA BHAT MR. NAJMI WAZIRI JJ. Appellant Through: Sh. S. Ganesh, Sr. Advocate with Ms. Pooja Mehra Saigal, Sh. Jitendra Ratta and Ms. Jasmine Kottai, Advocates. Respondents Through: Sh. Ruchir Bhatia, Sr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to variously as IDS or the Scheme ] was notified in May 2016 by the Central Government with effect from 1st June, 2016. Thereafter, by Circular No. 25 of 2016 dated 30th June, 2016 issued by the Union Ministry of Finance issued certain clarifications, on matters relating to the IDS. Pending the disposal of the petitioner s application under Section 119(2)(b), it also made a declaration in Form 1 dated 15.09.2016 under the scheme, for all the assessment years. The income so disclosed under the scheme in terms of the unaudited accounts was disclosed as ₹ 43.55 crores. The total tax payable including interest and penalty as under the Scheme was ₹ 19.60 crores, against which advance tax paid by the petitioner and TDS deducted to its benefit was ₹ 16.49 crores, leaving the net tax payable of ₹ 3.11 crores. These details had to be mentioned in the Form 1 at serial No.11 and were duly disclosed (by the Petitioner) in its application. In this background, the petitioner received the impugned order from the Principal Commissioner of Income-Tax, (PCIT) in response to its declaration in Form 1, demanding a tax of ₹ 19.60 crores. 4. In terms of the impug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue is untenable. Furthermore, the petitioner s applications and representations under Section 119(2)(b) of the Income Tax Act and the representations in respect of the impugned order are pending adjudication till date and in compliance with the covenants of the IDS, 25% of tax assessed has to be paid by 30th November, 2016 in order to avail the benefit of the Scheme. If the case of Petitioner is correct then the total balance tax liability is only ₹ 3.11 crores out which 25% will be due and payable by 30th November 2016. 7. The petitioner s senior counsel argued that, in the event there is no response with respect to the clarification sought from the CBDT by 30th November, 2016, the Petitioner, who desires to avail the benefit of the IDS will be compelled to pay 25% of the tax liability determined under the impugned order by 30 November, 2016 failing which the Petitioner shall be completely denied the benefits of the scheme. At the stage of the filing of the petition, it was argued that if the payment of 25% of the tax liability as incorrectly determined by the third respondent is made without prejudice to its rights, the Petitioner would have been unable to seek a refun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x is payable at the time of paying returns under various provisions, including Sections 139, 142 and 148. Referring next to Section 219, it is submitted that tax credit for advance tax is no doubt given but that is in the case of regular assessment as defined in Section 2(40). The definition clause merely refers to assessments under Section 143(3) or default assessments under Section 144. Again, in support of this submission, reliance is placed upon CIT v. Shelly Products 2003 (261) ITR 367 (SC). The Revenue refers to and relies upon the recent ruling of this Court in Intercraft Ltd. v Commissioner of Income Tax 2017 (78) Taxmann.com 141 (Del) which dealt with the Kar Vivad Samadhan Scheme, 1998 and submits that the Court had rejected the assessee s argument that advance tax could be adjusted while determining the amounts payable under the Scheme. 11. The Revenue also resists the petitioner s contention to the extent that it drew analogy from the TDS based upon its circulars and instructions. It is pointed out that the instruction clarified that credit for TDS shall be allowed only in those cases where the relative income is declared under the Scheme and credit for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lose fully and truly all material facts necessary for the assessment or otherwise. (2) Where the income chargeable to tax is declared in the form of investment in any asset, the fair market value of such asset as on the date of commencement of this Scheme shall be deemed to be the undisclosed income for the purposes of subsection (1). (3) The fair market value of any asset shall be determined in such manner, as may be prescribed. (4) No deduction in respect of any expenditure or allowance shall be allowed against the income in respect of which declaration under this section is made. Charge of tax and surcharge. 184. (1) Notwithstanding anything contained in the Income-tax Act or in any Finance Act, the undisclosed income declared under section 183 within the time specified therein shall be chargeable to tax at the rate of thirty per cent of such undisclosed income. (2) The amount of tax chargeable under sub-section (1) shall be increased by a surcharge, for the purposes of the Union, to be called the Krishi Kalyan Cess on tax calculated at the rate of twenty-five per cent of such tax so as to fulfill the commitment of the Government for the welfare o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all be paid on or before a date to be notified by the Central Government in the Official Gazette. (2) The declarant shall file the proof of payment of tax, surcharge and penalty on or before the date notified under subsection (1), with the Principal Commissioner or the Commissioner, as the case may be, before whom the declaration under section 183 was made. (3) If the declarant fails to pay the tax, surcharge and penalty in respect of the declaration made under section 183 on or before the date specified under sub-section (1), the declaration filed by him shall be deemed never to have been made under this Scheme. Undisclosed income declared not to be included in total income. 188 The amount of undisclosed income declared in accordance with section 183 shall not be included in the total income of the declarant for any assessment year under the Income-tax Act, if the declarant makes the payment of tax and surcharge referred to in section 184 and the penalty referred to in section 185, by the date specified under sub-section (1) of section 187. Undisclosed income declared not to affect finality of completed assessments. 189 A declarant under this Sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty, such payment shall not be deemed to be the amount unpaid for the purposes of - determining tax arrear under this sub-clause; The above feature alone, in the opinion of this court is sufficient to distinguish the ratio of the decisions cited by the Revenue; there is no provision similar to Section 2 (m) or the Explanation thereto, of the 1998 Scheme, that debars giving adjustment or credits to amounts paid in the past in respect of the period or assessment years sought to be covered by the declaration under the IDS. That apart, the decisions also are in the context of entirely different facts. Nitdip (supra) was in the context of a challenge to the statutory scheme on the ground of discrimination; the court had no occasion to deal with past paid amounts. Jayapradha (supra) was a case where the assessee was facing a pending prosecution when the scheme was brought into force; it contained an express bar preventing such accused from the benefits under it. Hemalatha (supra) no doubt states that those who seek benefits under the scheme such as the present one are strictly bound to comply with its terms. 15. Does the expression (the) tax and surcharge payable under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the Act shall not be entitled to claim any set off or relief in any appeal, reference or other proceeding in relation to any such assessment or reassessment. Also, under that provision the person so declaring shall not be entitled to to re-open any assessment or reassessment made under the Income-tax Act or the Wealth-tax Act, 1957 (27 of 1957) . Therefore, the court is of the opinion that there is no bar for an assessee or declarant to claim credit of advance tax amounts paid previously relative to the assessment years or periods for which it seeks benefits under the scheme. This interpretation is in no way inconsonant with the ratio of the Supreme Court's rulings, relied upon by the Revenue. 18. The decision in Shelly (supra) is decisive that advance tax is a mode of tax recovery, which the assessee is bound to pay under the scheme of the Income Tax Act. The court, after considering Section 140A, Section 4, Section 139 and Section 240 of the Income tax Act, observed as follows: Section 4 of the Act creates the charge and provides inter alia for payment of tax in advance or deduction of tax at source. The Act provides for the manner in which advance tax is to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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