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TMI Blog2022 (2) TMI 344X X X X Extracts X X X X X X X X Extracts X X X X ..... is no sustainable ground to make a distinction between TDS and Advance Tax for the purpose of credit, we do not find any reason not to equate an advance tax with TDS for the purpose of the Scheme, 2016. If a TDS is entitled to credit, a fortiori advance tax must get the same dispensation. It is true that the provisions of Chapter XVII primarily deal with regular assessment in respect of the liability to pay income tax founded in Sections 4 and 5 of the Act, 1961, which are the charging sections. It is also true that the provisions of Sections 184 and 185 of the Act, 2016 incorporating the Scheme, 2016, begin with a non obstante clause. However, the overriding effect of Sections 184 and 185 is confined to the rate at which the tax is to be imposed on the undisclosed income, surcharge to be paid thereon and the penalty. The substance of the matter, especially the fact that the advance payment made by the declarant retains the character of tax, however, cannot be lost sight of. In the case at hand, it is not the case of respondent No.1 that the advance tax paid by the petitioner was not relatable to the income for the relevant assessment years, which petitioner disclosed. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment year 2014-15. (d) In accordance with the provisions of the Act, 2016, the said undisclosed income entailed total tax, surcharge and penalty to the tune of ₹ 1,07,58,986/-. (e) It transpired that the said Form was not acted upon by the respondent No.1 as there were certain mistakes. (f) After a notice under Section 147 of the Income Tax Act, 1961 ( the Act, 1961 ) was received, the petitioner submitted a revised Form on 18th January 2019. (g) The respondent No.1, despite the petitioner having complied with all the requirements to be eligible to get the benefit of the Scheme 2016, including the payment of the aforesaid amount of ₹ 1,07,58,986/-, did not issue the certificate in Form 4. (h) The petitioner claimed that she had paid advance tax and thus entitled to credit for the same against the aforesaid liability of ₹ 1,07,58,986/-. (i) The respondent No.1 took a stand that the petitioner was not entitled to credit of the amount, which was paid by way of advance tax. Hence, this petition. 4. An affidavit in reply is filed by Mr. Jagdish Babu Malempati, Principal Commissioner of Income Tax. The claim of the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will be issued immediate to making of balance tax liabilities payable by you towards IDS 2016. 7. From the aforesaid communication, it becomes evident that there is no controversy over material facts. Firstly, the petitioner had disclosed ₹ 2,39,08,850/- under the Scheme, 2016; secondly, the petitioner was required to pay a sum of ₹ 1,07,58,986/- towards the tax, surcharge and penalty; thirdly, the petitioner paid a sum of ₹ 40,03,031/- towards the tax and fourthly, a sum of ₹ 24,75,135/- was adjusted towards the TDS. 8. The Revenue thus claimed that only 60.21% of the total amount due under the Scheme, 2016 was received. The Revenue took a stand that the request of the petitioner to adjust pre-deposited tax such as, advance tax and self-assessment tax, cannot be acceded to as under the Scheme, 2016, there was no provision for such adjustment. The Revenue sought to draw support from a judgment of this Court in the case of Umesh D. Ganore Vs. Principal Commissioner of Income Tax [2019] 104 taxmann.com 209 (Bombay). 9. In the light of the aforesaid assertions of the petitioner and the contentions of respondent No.1, we have heard Mr. Devendra H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell as the circular dated 30th June 2016 issued by the CBDT and yet disagreed with the views expressed therein for reasons which are based on the construction of the Scheme, 2016. Therefore, the petition does not deserve to be entertained. 13. In the case of Umesh Ganore (supra), a Division Bench of this Court considered the question as to whether advance tax, self-assessed tax and TDS paid by the assessee prior to filing of declaration should be adjusted towards the discharge of the assessee s liability to pay tax, surcharge and penalty under the said scheme. After adverting to the provisions of the Scheme, 2016, this Court recorded that the assessment proceedings under the Act, 1961 and declaration of undisclosed income under the Scheme, 2016 are required to be considered in two separate compartments. The self-assessed tax and advance tax could be adjusted against the assessee s liability arising in the assessment under the Act, 1961. However, the same cannot be transposed for the purpose of discharging the liability to pay tax, surcharge or penalty by declarant of the undisclosed income under the Scheme, 2016. The Court was of the view that the Scheme, 2016 is a complete Code ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery . In fact, section 190(1) clarifies that this method of payment of tax will not prejudice the charge of tax under section 4(1) nor will it modify the liability of the assessee to pay income tax pursuant to an assessment order. [See Modi Industries Limited v. CIT, [1995] 216 ITR 759 (SC)]. (emphasis supplied) 16. The Supreme Court has, in terms, observed that the advance tax paid is adjustable towards the tax due. Advance tax is essentially a preassessment collection of taxes either by deduction of tax at source or by payment of advance tax which has to be adjusted towards income tax levied on the total income. The advance collection, however, does not denude the said payment the character of tax . 17. Mr. Jain was justified in canvassing a submission that the aforesaid aspect of the matter was not considered in the case of Umesh Ganore (supra). Whereas, the Delhi High Court decision in the case of Kumudam Publications Private Limited (supra), which considered the effect of CBDT Circular dated 30th June 2016 as regards credit for TDS and its applicability to the advance tax as well, was not disturbed by the Supreme Court in Special Leave Petition (Civil) Diary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 and 185 of the Act, 2016 incorporating the Scheme, 2016, begin with a non obstante clause. However, the overriding effect of Sections 184 and 185 is confined to the rate at which the tax is to be imposed on the undisclosed income, surcharge to be paid thereon and the penalty. The substance of the matter, especially the fact that the advance payment made by the declarant retains the character of tax, however, cannot be lost sight of. 23. In the case at hand, it is not the case of respondent No.1 that the advance tax paid by the petitioner was not relatable to the income for the relevant assessment years, which petitioner disclosed. If the said payment is not apportionable towards any other liability, there is no justifiable reason to deprive the declarant from getting the credit for the same against the liability under the Scheme, 2016. 24. For the foregoing reasons, we are persuaded to allow the petition by setting aside the communication dated 14th January, 2020. Hence, the following order:- ORDER (i) The petition stands allowed; (ii) Respondent No.1 shall issue certificate in Form 4 as required by Rule 4(5) of Income Declaration Scheme Rules, 2016, upon the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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