9911796707
TMI Blog2019 (3) TMI 1268X X X X Extracts X X X X X X X X Extracts X X X X ..... see s declared income under the Income Tax Act, 1961. Therefore, in absence of any specific provision in the scheme, granting benefit of the self assessed tax or advance tax under the Act, for the purpose of discharging the assessee s liability under the said scheme, the same cannot be readily presumed. To reiterate these provisions provided for two separate compartments between the assessment proceedings under the said Act and declaration of undisclosed income under the said scheme. The self assessed tax and advance tax would be adjusted against an assessee s liabilities arising in the assessment under the said Act and cannot be transposed for the purpose of discharging the liability to pay tax, surcharge or penalty by a declarant of undisclosed income under the said scheme. The reference to the Rules or the formant for making declaration or payment would not change this provision. Nothing contained in the Rules or the formats prescribed therein would indicate any intention on the part of the legislature to grant the benefit of advance tax or self assessed tax for the purpose of the said scheme. In any case, such right had to be recognized under the Act and cannot be interpreted o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of self assessed tax or advance tax for making good, the requirement of depositing tax, surcharge and penalty under the scheme, the declaration must fail and the action of the Revenue Authorities must be confirmed. In relation to those assessment years where without any adjustment of advance tax or self assessed tax, deposits made by the petitioner were sufficient to cover the tax, surcharge and penalty under the scheme by the due dates, such declaration must be accepted. X X X X Extracts X X X X X X X X Extracts X X X X ..... d date of March 31, 2017; (iii) Lastly, the balance amount of ₹ 36,67,385/was paid on September 27, 2017." 7. We may note that, the total amount paid by the Petitioner as noted above along with the said sum of ₹ 8,19,465/ was short by ₹ 4/ as compared to the requirement arising under the said Scheme. Petitioner points out that this short fall of sum of ₹ 4/ was on account of pure oversight and calculation error and should not be allowed to defeat the Petitioner's declaration under the said Scheme since the same was otherwise in order in all respects. 8. We may record that, this short fall of ₹ 4/ was not the central controversy between the two sides. In other words, had this been the only ground for rejecting Petitioner's declaration, we would have readily granted relief to the Petitioner as prayed. While examining the legal dispute between the two sides, we would eliminate this factor of short fall of ₹ 4/. 9. The controversy between the Petitioner and the department is much deeper and revolves around Petitioner's claim that, advance tax, self assessed tax and TDS paid by the Petitioner prior to fili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... schemes which contained a specific bar against any adjustment of taxes paid in the past. In this context, the Counsel also sought to distinguish the decision of Division Bench of this Court in Earnest Business Services Pvt. Ltd. v/s. Commissioner of Income Tax and Others reported in 393 ITR 453, which was rendered in the context of the Voluntary Disclosure of Income Scheme, 1977 (in short "VDIS"); (v) Counsel placed reliance on the decision of the Division Bench of the Delhi High Court in Kumudam Publications Pvt. Ltd., v/s. CBDT reported in 393 ITR 599, in which, in the context of the present Scheme, Delhi High Court held that adjustment of advance tax and self assessment tax would be permissible; 12. On the other hand, learned Counsel Shri Walve, for the Revenue opposed the Petitions, contending that: (i) The said Scheme makes special provisions for disclosure of undisclosed income. The same must be construed strictly ; (ii) The Scheme does not envisage any adjustment of the past taxes as is sought to be done in the present case by the assessee; (iii) Heavy reliance was placed on the decision of this Court in case of Earnest Business Services Pvt. Ltd., (supra). It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l be chargeable to tax at the rate of thirty per cent of such undisclosed income. (2) The amount of tax chargeable under subsection (1) shall be increased by a surcharge, for the purpose 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 of the farmers." Section 185 of the Act pertains to penalty and reads as under: "185: Notwithstanding anything contained in the Income Tax Act or in any Finance Act, the person making a declaration of undisclosed income shall in addition to tax and surcharge under Section 184, be liable to penalty at the rate of twenty five percent of such tax." Section 186 pertains to the manner of declaration. Section 187 of the Act lays down the time frame for making payment of the tax. Subsection (1) of Section 187 of the Act provides that tax, surcharge and penalty payable under Sections 184 and 185 of the Act in respect of undisclosed income shall be paid on or before the date to be notified by the Central Government. Subsection (3) of Section 187 of the Act provides that, if the declarant tails to pay the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section (1) and (2) of Section 184 and penalty under Section 185 of the Act. Such amount would be deposited within the time prescribed by the Government of India as envisaged in subsection (1) of Section 187 of the Ac. Scheme also contains provisions for the consequence of the declaration being accepted as well as the circumstances, under which, said declaration would be rendered nonest as also the consequences thereof. To appreciate the Petitioner's contention of the adjustment of advance tax and self assessed tax, therefore, may be seen in light of such provisions of the Scheme. 15 While doing so, we must notice yet another aspect, emerging from the Scheme. As noted, upon the declaration of undisclosed income being made, liability to pay tax with surcharge arises under Section 184 and that of penalty under Section 185. Both these Sections start with the nonobstinate clause providing that notwithstanding anything contained in the Income Tax Act, or any Finance Act, the undisclosed income would be charged to tax at rates specified therein and the declarant would be liable to pay the penalty as per the prescribed rates. In other words, Sections 184 and 185 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom that under the Scheme of 1997 Act. In fact, it is one flat rate and not at progressive rate as under the 1961 Act. Therefore, as the tax payable under the Scheme is different and distinct from the tax payable under the 1961 Act, the benefit of tax paid on the undisclosed income as and by way of tax deduction at source under the 1961 Act, cannot be availed under the Scheme. This is also evident from section 64 of the Scheme providing "notwithstanding anything contained in the Income Tax Act or Finance Act, income shall be charged in respect of income so declared..." Thus, the charge is different." 17 It is undisputed that the Scheme does not make any specific provision for adjustment of any of the predeposited taxes such as advance tax or self assessment tax or even tax deducted at source. 18. The analysis of the scheme would show that in absence of such a scheme, an assessee who has intentionally not disclosed an income, would be subject to the normal provisions under the Act for assessment, levy of tax, interest and penalty. Without there being any specific provision in the scheme granting benefit of tax voluntarily paid, or deposited as selfassessed tax or by way ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the strength of prescribed formants for making declaration. We are conscious that CBDT Circular dated 30.6.2016 has clarified the provision in relation to the tax deducted at source, providing that adjustment under the scheme would be permissible in cases where relation between the income declared under the scheme and the advance tax can be established and such tax has not been claimed in the return of income filed for any assessment year. This clarification made by the CBDT would neither indicate that the legislature while framing the scheme envisaged the adjustment of other taxes namely the advance tax or self assessed tax, nor would state different treatments given to the two kinds of taxes rendered the provisions of the said scheme ultra virus, the constitution being in violation of Article 14 of the Constitution. The CBDT exercises its power vested under Section 119 of the Act. As is well settled, it is within the power of CBDT to issue clarifications for reducing the rigors of the statutory provisions. Even otherwise the very nature of tax deducted at source is different from the other two categories namely advance tax and self assessment tax, since tax deducted at source i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ussion would be that in relation to those assessment years where the petitioner relied on the adjustment of self assessed tax or advance tax for making good, the requirement of depositing tax, surcharge and penalty under the scheme, the declaration must fail and the action of the Revenue Authorities must be confirmed. In relation to those assessment years where without any adjustment of advance tax or self assessed tax, deposits made by the petitioner were sufficient to cover the tax, surcharge and penalty under the scheme by the due dates, such declaration must be accepted. 24. In the second petition, barring change in figures, all relevant facts are identical. We have, therefore, not discussed the facts separately. 25. The petitions are, therefore, disposed of with following directions : (i) In Writ Petition No. 14709 of 2018, the petitioner's declaration under the Scheme for assessment years 201314 and 201415 would fail. Action of the Revenue Authority is confirmed; (ii) In Writ Petition No. 14710 of 2018, the petitioner's declaration for assessment years 201112 and 201213 would be accepted by the department. Necessary certificate would be is ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
