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TMI Blog2021 (8) TMI 1227X X X X Extracts X X X X X X X X Extracts X X X X ..... etain the tax so paid in respect of a declaration which is void and non-est. Article 265 of the Constitution of India provides that no tax shall be levied or collected except by authority of law. This would mean there must be a law, the law must authorise the tax and the tax must be levied and collected according to the law. In the absence of any such authority of law, a retention of tax contrary to the very Scheme cannot be permitted. Therefore, the provision of Section 191 cannot have any application to a situation where the tax is paid but the entire amount of tax is not paid and accordingly the retention of the tax by respondent no.1 is illegal. Petitioner is entitled to an adjustment by giving credit to the amount paid under IDS. Respondent no. 3 is directed to rectify Form No. 3 issued under the DTVSV Act read with DTVSV Rules, to give credit to this amount and issue fresh Form No. 3, within two weeks from the day, an authenticated copy of this order is served upon respondent No. 3 by petitioner. Petitioner to make payment of disputed tax in accordance with revised / rectified Form-3 within a period of two weeks from the issuance of revised Form-3. - WRIT PETITION NO. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to ₹ 82,33,872/- by 31st November 2016, ₹ 82,33,872/which would make 50% of the total scheme tax by 31st March 2017 and ₹ 1,64,67,748/- which would make 100% of the total scheme tax by 30th September 2017. Admittedly, petitioner paid on 30th November 2016 the first installment of ₹ 82,33,872/- by two challans of ₹ 41,16,937/- each. This amount was paid after respondent no. 3 acknowledged the declaration made by petitioner by issuing Form-II on 5th October 2016. Subsequent thereto petitioner, for some unavoidable reasons, was unable to pay the balance installments. In view thereof and as provided under Section 187 (3) of the IDS, petitioner was deemed never to have made declaration under the IDS and the amount disclosed in the declaration as provided under Section 197 (b) of the IDS, was chargeable to tax under the Income tax Act in the previous year in which the declaration was made, i.e., assessment year 2016-17. Petitioners have no dispute with this provision. 5. The Assessing officer, therefore, passed an assessment order dated 29th December 2018 for assessment year 2016-17 and determined a sum of ₹ 3,35,08,445/- as payable by petitioner. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty paid by the declarant under Section 183 of the Act shall not be refundable, the amount of ₹ 82,33,874/- paid by petitioner will be forfeited. Of course, respondent no. 3 also has taken a stand that IDS was a scheme, where as DTVSV was an Act and amount paid under the scheme cannot be adjusted under the Act, etc. Aggrieved by this decision of respondent no. 3, petitioner has approached this Court praying that respondent no. 3 should be directed to adjust the amount of ₹ 82,33,874/- paid and issue a revised/rectified Form No. 3 or in the alternative refund the amount of ₹ 82,33,874/- with accrued interest, if any. 7. It will be useful to reproduce, for ease of reference, certain provisions of IDS:- Short title and commencement. 181. (1) This Scheme may be called the Income Declaration Scheme, 2016. (2) It shall come into force on the 1st day of June, 2016. ... Declaration of undisclosed income. 183. (1) Subject to the provisions of this Scheme, any person may make, on or after the date of commencement of this Scheme but before a date to be notified by the Central Government in the Official Gazette, a declaration in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tax, surcharge and penalty, has not been paid within the due date notified under this sub-section, the Central Government may, by notification in the Official Gazette, specify the class of persons, who may, make the payment of such amount on or before such date as may be notified by the Central Government, along with the interest on such amount, at the rate of one per cent for every month or part of a month comprised in the period commencing on the date immediately following the due date and ending on the date of such payment.] (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 subsection (1), the declaration filed by him shall be deemed never to have been made under this Scheme. (emphasis supplied). Undisclosed income declared not to be included in total income. 188. The amount of undisclo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of such incomes hall be deemed to have been acquired or made, in the year in which a notice under section 142, subsection (2) of section 143 or section 148 or section 153A or section 153C of the Income-tax Act is issued by the Assessing Officer, and the provisions of the Income tax Act shall apply accordingly. 8. There was no dispute on the fact that under the IDS, the amount of ₹ 82,33,874/- has been paid, but petitioner failed to pay the balance two installments of tax, surcharge and penalty in respect of the declaration made under Section 183 of the IDS. As provided under Section 187(3), the consequence of failure to pay would mean petitioner shall be deemed never to have made any declaration under the IDS and the undisclosed income declared under Section 183 shall be chargeable to tax under Income Tax Act in the previous year in which such declaration was made. It is also not in dispute that petitioner was entitled to take benefit of DTVSV Act provisions. 9. The dispute basically was concerning in provisions of Section 191 of the IDS, i.e., in view of Section 191 providing that any amount of tax and surcharge paid under Section 184 or penalty paid under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 Supreme Court Cases 510, considered the provisions of VDIS. In that case, appellants had paid the amount beyond the time limit prescribed and the Court held that time prescribed under VDIS scheme was mandatory in view of the language of the provision and that it cannot be extended by the Court on any equitable considerations, but the Court went on to hold that since the payments made beyond the time limit fixed would not entitle the asssessee the benefit of the scheme, Revenue should be directed to refund or adjust in accordance with law the amounts so deposited. Paragraphs 5,6,7,9 and 18 reads as under:- 5. We are concerned with Sections 66 and 67 and the language used therein, since the answer to the question framed at the outset would depend on the interpretation of the provisions of these sections. These Sections provide: 66. The tax payable under this Scheme in respect of the voluntarily disclosed income shall be paid by the declarant and the declaration shall be accompanied by proof of payment of such tax. Interest payable by declarant. 67. (1) Notwithstanding anything contained in Section 66, the declarant may file a declaration without paying the tax un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that even if the provisions of Sec. 67(1) were mandatory, nevertheless, the Court could under certain circumstances dilute the severity of its operation, provided the assessees were acting bona fide. Reference has been made to the decision of this Court in M/s Hindustan Steel Ltd. v. State of Orissa reported in [1969] 2 SCC 627 in this context. The assessees have also argued that the first decision in the field was the decision of the Punjab and Haryana High Court in 238 ITR 51 Laxmi Mittal case (supra) where the High Court had held that the period fixed under Sec. 67(1) was not immutable and that for sufficient reason the time could be extended. The Department had not chosen to challenge that decision and had accepted that interpretation. It is contended on the basis of the decisions of this Court in Union of India and Ors. vs. Kaumudini Narayan Dalai and Anr., 249 ITR 219 and Union of India vs. Satish Panalal Shah 249 ITR 221 that the Revenue cannot pick and choose cases in which they would challenge a similar decision unless there was just cause. According to the assessees, there was no cause shown justifying the Department's decision to challenge the principle enume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he view that the submissions of the Revenue-must be accepted. A plain reading of the provisions of the Scheme would show that the tax payable under the Scheme shall be paid: within the time specified in the general rule provided in Section 66, namely, payment prior to the making of a declaration. The exception to this general rule has been carved out by Section 67(1) which allows a declarant to file a declaration without paying the tax. This exception, however, is subject to two conditions; viz., (1) the payment of tax within three months from the date of the filing of the declaration together with (2) the payment of simple interest at the rate of 2% for every month or part of a month. The period of interest is to commence from the date of filing the declaration and shall end with the date of payment of tax. It may be noted that under Section 67 (1) not only must these two conditions be fulfilled within the period of three months but proof of such payment must also be filed within the same period. 9. The use of the word shall in a Statute, ordinarily speaking, means that the statutory provisions is mandatory. It is construed as such unless there is something in the context ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the payment of tax along with the declaration itself, but at the same time, making a provision for payment of tax at a later stage not beyond three months from the date of filing the declaration with interest. Further, sub-section (2) of Section 67 stresses upon the mandatory requirement of payment of tax within the outer limit of time and in the event of any such nonpayment of tax, the declaration shall be deemed never to have been made under the Scheme, i.e., it will be non-est. Section 70 of the Scheme contemplates that no amount of tax paid in pursuance of a declaration shall be refundable under any circumstances. Necessarily, it would only mean that the expression declaration used in Section 70 should be a declaration as contemplated by Section 66 read with Section 67(1) of the Scheme. When the very Scheme contemplates that a declaration without payment of tax is void and non-est and the declaration filed by the assessee was not acted upon, the question of retention of the tax paid under such declaration will not arise. The Revenue cannot retain any amounts paid under a declaration falling within the mischief of Section 67(2). There is no provision under the Scheme wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 1, the declaration filed by him shall be deemed never to have been made under the Scheme. This would mean that the declaration will be non-est. When the scheme itself contemplates that a declaration without payment of tax is void and non-est and the declaration filed by the assesseee would not be acted upon (because Section 187 (3) says the declaration filed shall be deemed never to have been made under the Scheme), the question of retention of the tax paid under such declaration will not arise. The Revenue cannot retain any amounts paid under a declaration which contemplated under the Scheme is deemed never to have been made. The Scheme does not provide for Revenue to retain the tax so paid in respect of a declaration which is void and non-est. Article 265 of the Constitution of India provides that no tax shall be levied or collected except by authority of law. This would mean there must be a law, the law must authorise the tax and the tax must be levied and collected according to the law. 17. In the absence of any such authority of law, a retention of tax contrary to the very Scheme cannot be permitted. Therefore, the provision of Section 191 cannot have any application to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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