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TMI Blog2023 (5) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... ded to such a declarant, among others, immunity from prosecution. The petitioner, with a view to seek benefit under the IDS filled up Form- 1, dated 30th September 2016 for the relevant year and disclosed an undisclosed income of Rs. 15,50,000/-. The revenue then issued an acknowledgment in Form-2 dated 4th October 2016 requiring the petitioner to pay an amount of Rs. 6,97,500/-. The petitioner, however, deposited an amount of Rs. 3,48,752/- by way of two challans but could not deposit the rest on account of an alleged personal difficulty. The case of the petitioner was then opened for reassessment under section 147 of the Income Tax Act, 1961 ('the Act'). A notice dated 30th March 2018 under section 148 of the Act for the assessment year 2016-17 was issued pursuant to which the petitioner filed his return declaring an income of Rs. 22,72,910/-. 3. An order of assessment came to be passed on 30th November 2018, whereby the total income of the petitioner was assessed at Rs. 38,22,910/-. Penalty proceedings against the petitioner also resulted in levying a penalty of Rs. 6,97,500/- upon the petitioner. Both these orders came to be challenged before the Appellate Forum. 4. On 17th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disputed interest, disputed fees where there is no disputed tax. Further, the appeal may also be against the tax determined on defaults in respect of tax deducted at source or tax collected at source; (c) in appeals related to disputed tax, the declarant shall only pay the whole of the disputed tax if the payment is made before the 31st day of March, 2020 and for the payments made after the 31st day of March, 2020 but on or before the date notified by Central Government, the amount payable shall be increased by 10 per cent of disputed tax; (d) in appeals related to disputed penalty, disputed interest or disputed fee, the amount payable by the declarant shall be 25 per cent of the disputed penalty, disputed interest or disputed fee, as the case may be, if the payment is made on or before the 31st day of March, 2020. If payment is made after the 31st day of March, 2020 but on or before the date notified by Central Government, the amount payable shall be increased to 30 per cent of the disputed penalty, disputed interest or disputed fee, as the case may be. 4. The proposed Bill shall come into force on the date it receives the assent of the President and declaration may be ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 2. The stand taken is that while the amount paid under the IDS could be refunded with interest, it cannot be taken into consideration under the DTVSV Act. CONCLUSION : 10. It is not denied that the petitioner had deposited an amount of Rs. 3,48,752/- under the IDS but had not deposited the entire amount which was otherwise calculated in terms of the said Scheme. The amount of Rs. 3,48,752/- also appears to have neither been refunded nor adjusted against any outstanding demand in the case of the petitioner for any other assessment year. The issue that arises for consideration is whether the said amount of Rs. 3,48,752/- could be adjusted against the amount which was otherwise payable by the petitioner under the DTVSV Act or not. But before we proceed to deal with this issue, it would be beneficial to refer to the provisions of the IDS and, in particular, the following sections : 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 respect of any income chargeable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... surcharge and penalty, paid in excess of the amount payable under this Scheme shall be refundable] (emphasis supplied) 11. On a reading of the aforementioned provisions of the Scheme, it would become clear that failure on the part of the petitioner to pay the tax in its entirety in respect of the declaration made under section 183 would be deemed to have never been made under the IDS. The issue as to whether the partial amount that was deposited by a declarant would get forfeited in almost similar circumstances came up for consideration before the Apex Court in Hemalatha Gargya Vs. Commissioner of Income Tax, A.P. & Anr. (2003) 9 SCC 510. The Apex Court considered the provisions of sections 67 and 70 of the Voluntary Disclosure of Income Scheme 1997 (VDIS) which envisaged as under : "Interest payable by declarant :-- 67. (1) Notwithstanding anything contained in Section 66, the declarant may file a declaration without paying the tax under that section and the declarant may file the declaration and the declarant may pay the tax within three months from the date of fling of the declaration with simple interest at the rate of two per cent for every month or part of a month c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings are beyond the control of a citizen, certain moving space is normally allowed. This is precisely what the petitioner is wanting in the present case. 14. The Andhra Pradesh High Court in Patchala Seetharamaiah Vs. Commissioner of Income-tax and Anr. [2000] 241 ITR 287 (AP) while considering the provisions of the VDIS held that retention of any amount paid under the Scheme would be impermissible under Article 265 of the Constitution of India, if the amounts paid under the Scheme in terms of the declaration was held to be non-est as per the Scheme. It was held : 7. Thus, from a reading of the aforesaid provisions and the scope and ambit of the Scheme as contemplated, it is quite apparent that if one has to avail the benefit under the Scheme, he has to mandatorily comply with the requirements. It contemplates 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 fling 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 no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 3 issued under the DTVSV Act read with DTVSV Rules, to give credit to this amount of Rs. 82,33,874/- 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. 16. In the present case, it can be seen that based upon the declaration given by the petitioner, Form-3 was issued on 1st February 2021 which required the petitioner to pay an amount of Rs. 6,97,500/- before 31st March 2021 and Rs. 7,67,250/- after 31st March 2021. However, various extensions were granted on account of Covid-19 Pandemic, extending the dates aforementioned and the last extension granted was vide Notification No. 94/2021/FNo. IT(A)/01/2020-TPL, which granted extension up-till 30th September 2021 and 1st October 2021 in regard to the time periods earlier fixed as 31st March 2020 and 1st April 2020. 17. As per the averments made in the petition, the petitioner had objected to the issuance of Form-3 as it did not take into consideration an amount Rs. 5,07,480/- which was ..... 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