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TMI Blog2022 (2) TMI 941X X X X Extracts X X X X X X X X Extracts X X X X ..... he statute. Thus, once the declaration is accepted by the PCIT such authority is estopped from taking any steps which would in effect amount to reopening and/or revising the decision already taken on such declaration. The said scheme was introduced in order to encourage an assessee to make a disclosure of the income not disclosed earlier. PCIT in the instant case invoked its power under Section 263 in respect of an item of income which was declared in terms of the said scheme. All particulars were available before the PCIT in respect of such income and the PCIT upon being satisfied, accepted such declaration. Thus, if the contention of the revenue is accepted that the PCIT has power to invoke Section 263 of the I.T. Act, the same, in our considered view, would frustrate the object behind introduction of such Scheme. The PCIT was not justified in invoking the power under Section 263 of the I.T. Act as it would amount to revising a decision taken by the PCIT on such declaration by the assessing officer which is not contemplated under the Income Tax Act. Thus, all materials were available before the PCIT when the declaration made under Section 183 of the Finance Act were considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... probe documentary evidence in depth in light of conduct of assessee and other surrounding circumstances in order to see whether the assessee is liable to provisions of Section 68 of the Income Tax Act or not? 6. We have heard Mr. Soumen Bhattacharjee, learned standing Counsel for the appellant and Ms. Swapna Das and Mr. Siddharth Das, learned Counsel appearing for the respondent/assessee. 7. As an interesting question of law arises for consideration in this appeal, we requested Mr. J.P. Khaitan, learned senior counsel to assist us and with his assistance and after hearing the learned counsels we proceed to decide the matter. 8. The assessee is an individual who had filed her return of income for the assessment year under consideration, AY 2014-2015 declaring a total income of ₹ 10,82,352/-. The return was processed under Section 143(1) of the Act. Subsequently, the return was selected for scrutiny and notice under Section 143(2) dated 18.09.2015 and notice under Section 142(1) along with a requisition of details/documents were issued to the assessee. In response to such notice, the assessee furnished necessary details. The assessing officer noted that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total income. The provision states that amount of undisclosed income declared in accordance with Section 180 shall not be included in the total income of the declarant for any assessment year under the Income Tax Act, if the declarant makes the payment of tax and surcharge referred to in Section 181 and the penalty referred to in Section 182 by the date specified under sub Section (1) of Section 184. Section 189 states that the declarant under the scheme shall not be entitled, in respect of undisclosed income declared or any amount of tax and surcharge paid thereon, to reopen any assessment or reassessment made under the Income Tax Act, or the Wealth Tax 1957, or claim any set off or relief in any appeal, reference or other proceeding in relation to any such assessment or reassessment. Section 191 places an embargo on the declarant to the effect that any amount of tax and surcharge paid under Section 181 or penalty paid under Section 182 in pursuance of a declaration under Section 180 shall not be refundable. Section 193 deals with declaration by misrepresentation of facts to be void. The said provision commences with a non-obstante clause stating that notwithstanding anything con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here the amount payable by the assessee is notified, there is a tabular statement containing the assessment year, the undisclosed income as declared in Form 1, undisclosed income eligible for the scheme, the amount payable namely, tax, sur-charge and penalty and reason in case there is a difference in the undisclosed income declared in Form 1 and undisclosed income eligible for the scheme. 13. In the preceding paragraphs we have mentioned about the manner in which the assessment was completed by the Assessing Officer under Section 143(3) of the Act by order dated 6th March, 2016. The Principal Commissioner of Income Tax X, Kolkata [PCIT] issued show cause notice dated 27th December, 2018 under Section 263 of the Act on the ground that an error was apparent in the assessment order and that in his prima facie view the assessment is erroneous in so far as it was prejudicial to the interest of revenue. Much prior to the issuance of notice under Section 263, dated 27th December, 2018, the assessee had submitted a declaration under the IDS on 24th September, 2016. The declaration was processed and a certificate of declaration under Section 183 of the Finance Act, 2016 in Form No.4 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income of the assessee for the relevant assessment year. Aggrieved by the order passed by the PCIT the assessee filed appeal before the Tribunal. The Tribunal found that the assessee has already offered long term capital gain of ₹ 74,24,380/- to tax under the IDS and paid the taxes thereon and this fact was brought to the notice of the PCIT in pursuance of the show cause notice issued under Section 263 of the Act and the Department s representative appearing on behalf of the Department before the Tribunal also acknowledged the same. The Tribunal was of the view that once the income offered and the declaration under IDS is accepted by the Department, the assessment order passed under Section 143(3) of the Act cannot be revised as the items of addition in question directed by the PCIT was part of IDS application and not part of the order passed under Section 143(3) of the Act. Further, the Tribunal observed that once a person has availed the benefit of the IDS and paid tax, the PCIT cannot revise the assessment order under Section 263 of the Act as it would be against the spirit of the Scheme. With this finding the appeal filed by the assessee was allowed. 15. The revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with respect to the declaration made by her under the Scheme. Therefore, it will be too late in the day for the PCIT to now invoke the power under Section 263 of the Income Tax Act to set at naught the finality arrived at under the IDS which was a Scheme notified in exercise of powers conferred under Section 199(1) and (2) of the Finance Act, 2016. That apart, the order of assessment under Section 143(3), upon the declaration being accepted has worked itself out and as on 13th October, 2017, the tax, sur-charge and penalty having been fully paid in terms of the declaration issued in Form 4, there is nothing more to be revised by the PCIT by invoking his power under the Income tax Act. If such revision of assessment is permitted, it would work against the object and purpose of IDS. Section 189 of the Finance Act, places an embargo on the assessee to the effect that an assessee who is a declarant under the IDS shall not be entitled, in respect of undisclosed income, declared or any amount of tax and surcharge paid thereon, to reopen any assessment or re-assessment made under the Income tax Act. If such is the legal position, it would equally apply to the revenue thereby prohibiting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the investigation wing of the Income tax Department. Further, we note that there is an annexure in Form I to declaration under Section 183 of the Act. The annexure is a statement of undisclosed income. It contains a description of undisclosed income and income declared in the form of investment in assets. There is a tabular statement which has to be filled up by the assessee mentioning the assessment year to which the undisclosed income pertains, the amount of undisclosed income and the nature of undisclosed income. Furthermore, we would be well justified in observing that the assumption of jurisdiction by the PCIT under Section 263 of the Act is, in fact, an exercise done by the concerned authority indirectly what the authority could not do directly in terms of the Finance Act, 2016 as the declaration filed by the assessee had been accepted and attained finality. 17. After going through the provisions of the scheme, this Court finds that Chapter IX of the Finance Act, 2016 is a complete code by itself. It provides an opportunity to an assessee to offer income, which was not disclosed earlier, to tax. Chapter IX provides for a special procedure for disclosure and charging in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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