Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2015 (7) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (7) TMI 1031 - HC - Income TaxValidity of Settlement Commission order under subsection 2C of Section 245D challenged - respondent No.1 has paid tax only on the additional income offered before the Settlement Commission and the tax payable on the additional income offered in the returns of income has not been paid by the respondent No.1 on or before filing the settlement application - Held that:- In simple terms, where an assessee has furnished return of income and applies for settlement of his case, one has to calculate his total income for the purpose of the said provision by aggregating the total income returned and the income disclosed in the application. Applicant's liability to pay additional tax would be the amount of tax calculated on such total income minus the amount of tax calculated on the total income returned for that year.Sub-section (1B) and (1C) of Section 245 C thus provide for a special formula for arriving at an applicant's liability to pay additional tax for maintaining an application for settlement. Such special formula contains a deeming fiction. Such deeming fiction for the purpose of calculating additional tax payable defines term "total income" in artificial manner. In the present case, legislature has created a deeming fiction by providing that the tax of the applicant would be calculated on the aggregate of the total income returned and the income disclosed in the application as if such aggregate were the total income. this device is created for a special purpose and has a localized effect. It comes into existence only for the purpose of calculating the tax to be deposited by an applicant for settlement of a case. In such a situation, the aggregate of the total income returned and the income disclosed would be considered as total income. Under the circumstances, the contention of the Counsel for the respondent No.1 that the term "total income" should be construed as defined under Section 5 of the Act for the purpose of calculating additional tax of an applicant for settlement of a case cannot be accepted. In the present case, formula which contains a special definition for a special purpose would, therefore, have its effect only for Section 245C. Being a special provision it would prevail over any other general term of a concept contained in the Act. Section 245 C (1) of the Act also requires the applicant to provide besides other details, true and full disclosure of his income which has not been disclosed before the Assessing Officer and amount of income tax payable on "such income". Reference to "such income" thus is the income disclosed in the settlement application which was not disclosed before the Assessing Officer. We uphold the contentions of the Revenue by holding that the assessee had not paid the self-assessment tax in the return of income under Section 153-A and 143(2) of the Act for the assessment years 2007-08 to 2012-13, the application was not valid and quashed the order passed by the Settlement Commission, Mumbai - Decided in favour of revenue.
|