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TMI Blog2017 (7) TMI 732X X X X Extracts X X X X X X X X Extracts X X X X ..... me tax Act, engaged in the production and distribution of cinematographic films and other allied activities. The grievance of the petitioners in these writ petitions is against the refusal by the 2nd respondent - Principal Commissioner of Income Tax to process an application that was preferred by them for obtaining the benefit of the Direct Tax Dispute Resolution Scheme, 2016 (hereinafter referred to as 'the Amnesty Scheme') in respect of penalties that were imposed on the petitioner under Sections 271D, 271E and 272A (2) (C) of the Income Tax Act. The facts in these writ petitions would indicate that, for the assessment years 2007-2008, the petitioners had declared a Net Loss and the assessments were completed by accepting the retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rase 'tax arrear' is defined in the Amnesty Scheme as meaning the amount of tax, interest or penalty determined under the Income Tax Act or the Wealth-tax Act, in respect of which an appeal is pending before the Commissioner of Income Tax (Appeals) or the Commissioner of Wealth-tax (Appeals) as on the 29th day of February, 2016. For ease of reference the relevant provisions are extracted hereunder: "201. (1) In this Scheme, unless the context otherwise requires,- (a) xxx (b) xxx (c) xxx (d) xxx (e) xxx (f) xxx (g) xxx (h) "tax arrear" means, the amount of tax, interest or penalty determined under the Income-tax Act or the Wealth-tax Act, in respect of which appeal is pending before the Commissioner of Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Scheme is to be made, by the applicant seeking the benefit of the Scheme, before the designated authority in the prescribed form and in the prescribed manner and, on the application of the declarant being considered in terms of the Scheme, the pending appeals with regard to the tax dispute would stand automatically withdrawn. Section 208 of the Finance Act, 2016, which provides for exclusions from the operation of the Scheme reads as follows: "208. The provisions of this Scheme shall not apply- (a) in respect of tax arrear or specified tax,- (i) relating to an assessment year in respect of which an assessment has been made under Section 153A or 153C of the Income-tax Act or assessment or reassessment for any of the assessment years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as was linked to the total income finally determined. It was pointed out that, inasmuch as the penalties that were imposed of the petitioners, were not linked to any assessment proceedings, the petitioners could not have preferred a declaration under the Amnesty Scheme referred above. In the writ petitions, the petitioners impugn the said intimations served on them, and seek a direction to the 2nd respondent designated authority to process the declarations filed by them in accordance with Ext.P4 Amnesty Scheme. 5. A statement has been filed on behalf of the respondents 1 to 3, wherein the stand taken in Exts.P8 to P10 intimations served on the petitioners is sought to be justified based on the clarificatory Circulars issued by the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalties that were imposed on them. The contention of the Department is essentially that, inasmuch as there is a reference to a payment of tax and interest payable on the total income finally determined, along with 25% of the minimum penalty leviable, the Scheme must be intended to cover only such penalties as have been imposed on an assessee along with the assessment order. The clarification of the CBDT in the context of a penalty order under Section 271(C) or 271 (C) (A) of the Income Tax Act also suggests that, such penalties, as are not linked to assessment proceedings, would not be covered under the Scheme. On an overall consideration of the Scheme, however, I do not see any scope for such a restrictive interpretation of the ambit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a penalty that is imposed under the Income tax Act. Thus, I find that, the reasons stated in Exts.P8, P9 and P10 intimations served on the petitioners cannot be legally sustained to deny the petitioners the benefit of Ext.P4 Amnesty Scheme. Resultantly, I quash Exts.P8, P9 and P10 intimations in both the writ petitions and direct the 2nd respondent to process Exts.P5, P6 and P7 declarations submitted by the petitioners in both the writ petitions expeditiously and in terms of Exts.P4 Scheme, as clarified in this judgment. Needless to say, the processing of the declarations as directed shall be untrammelled by Exts.P11 and P12 Circulars that have been issued by the CBDT. The 2nd respondent shall pass orders, after processing the declarati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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