9911796707
TMI Blog2019 (8) TMI 1069X X X X Extracts X X X X X X X X Extracts X X X X ..... , New Delhi had by an order dated 10th January, 2017 under Section 127 of the Act transferred jurisdiction to Additional Commissioner of Income Tax, Special Range-4 who in turn was authorised to make the impugned order merits acceptance. Moreover, since this is a case of suppression of material facts the Respondent No.1 was duty bound to give effect to the provision provided under Section 193 of the FA, 2016. Therefore, where the jurisdictional Pr. CIT/CIT finds a declaration to be based on such misrepresentation or suppression of facts, he would not be precluded from holding the declaration itself to be void in terms of Section 193 of the FA, 2016. The Court accepts the contention of the Respondent that there is no provision as such in the IDS to afford the declarant a hearing prior to passing an order holding such declaration to be void for being in contravention of Section 193 of the FA, 2016. For all of the aforementioned reasons, the Court finds no error having been committed by Respondent No.1 in passing the impugned order. X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." 4. The declaration had to be made to the Principal Commissioner or the Commissioner in Form-1 as per Rule 4 (1) of the Income Declaration Scheme Rules, 2016 ('IDS Rules, 2016'). After the issuance of acknowledgement in Form 2 that the declarant had paid the tax, surcharge and penalty, the Principal Commissioner or the Commissioner had to grant the declarant a Certificate in terms of Form-4. Rule 4 of the IDS Rules reads as under: "Declaration of income or income in the form of investment in any asset. 4. (1) A declaration of income or income in the form of investment in any asset under section 183 shall be made in Form-1. (2) The declaration shall be furnished: (a) electronically under digital signature; or (b) through transmission of data in the form electronically under electronic verification code; or (c) in print form, to the concerned Principal Commissioner or the Commissioner who has the jurisdiction over the declarant. (3) The Principal Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in W.P. (C) No. 6541/2017 is concerned, the DA issued an acknowledgement in Form-2 under Rule 4 (3) of the IDS Rules determining the amounts payable as under: "Tax- 2,48,07,525/- Surcharge- 62,01,881/- Penalty- 62,01,881/-." 8. A separate acknowledgement was issued by the DA in respect of Vaibhav Jain, the Petitioner in W.P. (C) No. 6543/2017. Thereafter, the Petitioners made full payment of the tax, penalty and surcharge and submitted Form- 3 to the PCIT (9), New Delhi on 19th December, 2016. 9. The PCIT, CPC, Bangalore accepted the two declarations made by the Petitioners under Section 183 of FA, 2016, with reference to the undisclosed income of ₹ 8,26,91,750/- for each petitioner and issued a certificate in Form-4 read with Rule 4 (5) of the IDS Rules. Impugned order of the PCIT 10. Subsequently, the PCIT (4), New Delhi passed the impugned order on 9th June, 2017 under Section 183 of the FA 2016, holding that the above declaration of income of ₹ 8,26,91,750/- by each of the Petitioners was made "by suppression and misrepresentation of facts." Therefore, both declarations were held to be 'void'. 11. The PCIT referred to the report submitted by the ACIT, Sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,50,000/- 10. Swarnim Commosale P. Ltd. Shri Satyender Kumar Jain 22,50,000/- 12. The PCIT in the impugned order noted that provisional attachment orders under Section 24 (4) of the PBPT Act were passed on 24th May, 2017 and in respect of the same, observed that "on careful consideration of all material available," it had been decided that each of the Petitioners had made declaration of undisclosed income under the IDS "by misrepresentation and suppression of facts". 13.The PCIT adverted to Form No.1 submitted by the Petitioners and noted that in the 3rd Column where the names under which the shares were held had to be mentioned, it was written, 'multiple names'. According to the PCIT, the investment in shares declared by each of the Petitioners actually belonged to one Mr. Satyender Kumar Jain. Reliance was placed upon the provisional attachment order under Section 24 (4) of the PBPT Act. It was pointed out that although the Petitioners had declared an investment in the shares of Akinchan Developers Private Limited (ADPL); it was held that the said investments did not actually belong to the Petitioners, Ankush Jain and Vaibhav Jain, but in fact to Mr. Satyender Kumar Ja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to the root of the matter. It is pointed out that each of the Petitioners had given full particulars of the shares invested and the declarations had in fact been accepted by the PCIT, CPC, Bangalore, by issuing an acknowledgement in Form No.4. 18. It is submitted that the reliance on the order dated 24th May, 2017 passed under the PBPT Act was misplaced. According to the Petitioners, the proceedings under the PBPT Act, which were with respect to one of the companies in which the Petitioners has invested, had no effect on the declaration made by each of them under the IDS. Reference is made to Section 190 of the PBPT Act to urge that the provisions thereof had no applicability to income disclosed under the IDS. Lastly, it is submitted that the IDS is a beneficial scheme and has to be construed liberally. Submissions on behalf of the Respondents 19. On behalf of the Respondents, Ms. Maninder Acharya, ASG of India submitted as under: (i)The admitted fact was that each of the Petitioners had under the column in Form-1 which is titled "names in which, the shares were held" simply stated 'multiple names'. Such a declaration ex facie amounted to suppression of facts. (ii) There wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hirty per cent on the declared income as increased by surcharge at the rate of twenty five per cent of tax payable (to be called the Krishi Kalyan cess). A penalty at the rate of twenty five per cent of tax payable is also proposed to be levied on undisclosed income declared under the scheme." 22. The Notes on Clauses further explained the IDS as under: "Clauses 178 to 196 of the Bill seeks to insert a new Chapter IX relating to Income Declaration Scheme, 2016. The said Scheme, inter alia, provides for declaration of undisclosed income by any person. The scheme shall be in operation from the 1st day of June, 2016 till a date to be notified by the Central Government in the Official Gazette. The proposed Chapter, inter alia, provides for levying a tax of thirty per cent on the undisclosed income declared in the scheme, a surcharge at the rate of twenty-five per cent, of such tax as Krishi Kalyan Cess, and penalty at the rate of twenty-five per cent, of tax; procedure and manner of filing the declaration under the said Scheme; undisclosed income declared under the said Scheme not be included in the total income or affect finality of completed assessments; income declared under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ested in shares in multiple names", whereas for 2011 and 2012 it states, "notice of 148 issued after 1st June, 2016 for Indo, Akinchan and Prayas". For 2016, it states "invested in shares of multiple names of 'Akinchan', 'Prayas' and 'Mangal Yatan." The use of the phrase 'multiple names' is again repeated in Part-B of the form, which is titled 'unquoted equity share of Rule 3 (1)(c)(ii)' under the column which reads 'names under which held', the phrase 'multiple names' is simply stated throughout. 26. This must be read together with the verification, where each of the applicants has solemnly declared that "the information given in the declaration is correct and complete to the best of my knowledge and belief" and in particular that in addition to the own income of the declarant for which the declaration is made "the income of any other person in respect of which have not chargeable to tax has not been included in this declaration". 27. There is another specific declaration in para H which reads, "the income declared is not chargeable to tax under the Income Tax Act for any previous year relevant to assessment year where a search has been conducted under Section 132". It is furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. CIT, Mumbai (2007) 7 SCC 434 the Supreme Court upheld the action of the Respondent declaring the certificate issued under the Kar Vivad Samadhan Scheme, 1998 to be null and void on account of suppression of facts by the declarant. It was held in para 20 as under: "20. It may be necessary for the aforementioned purpose to bear in mind that the immunity granted pursuant to acceptance of a declaration made under the voluntary taxation scheme or Kar Vivad Samadhan Scheme, 1998 does not lead to a total immunity. Immunity granted under the Scheme has its own limitations. The Scheme must be applied only in the event the conditions precedent laid down therefor are applicable. See State, CBI v. Sashi Balasubramanian and Alpesh Navinchandra Shah v. State of Maharashtra." 32. The mere fact that an acknowledgement may have been issued in Form- 4 by the CIT, CPC did not provide any immunity to the Petitioners if it was found that the declaration was contrary to Section 193 of the FA, 2016 which begins with a non-obstante clause. 33. There is no merit in the objection to the jurisdiction of the PCIT, Delhi to issue the impugned order. The fact remains that the Petitioners' declarations w ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
