TMI Blog2017 (7) TMI 732X X X X Extracts X X X X X X X X Extracts X X X X ..... d interest payable on the total income finally determined for the assessment year in question. The object of the Scheme appears to be to ensure that, while a person seeking an Amnesty Scheme only in respect of the penalty that is imposed on him, avails the benefit of the Scheme to that extent, it should also be ensured that the said declarant discharges the tax and interest liability under the Income Tax Act for the assessment year in question. A person, who defaults on the tax and interest liability under the Income Tax Act for the assessment year, cannot claim the benefit of amnesty in respect of the penalty alone. It is also significant to note that the exclusions from the Scheme, that are enumerated in Section 208 of the Finance Act, 2016, also do not expressly provide for the exclusion of a declaration, such as those filed in the instant writ petition, where the amnesty is sought only in respect of a penalty that is imposed under the Income tax Act. Thus, find that, the reasons stated in Exts.P8, P9 and P10 intimations served on the petitioners cannot be legally sustained to deny the petitioners the benefit of Ext.P4 Amnesty Scheme. Resultantly, quash Exts.P8, P9 and P1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... identified an opportunity to settle the disputed penalty amounts under the provisions of the Amnesty Scheme. It is pointed out that under the Scheme, a declarant, who files a declaration before the designated authority in respect of tax arrears or specified tax could, notwithstanding anything contained in the Income Tax Act or any other law for the time being in force, settle the matter by paying, in the case of a disputed penalty, 25% of the minimum penalty levied, along with the tax and interest payable on the total income finally determined. The phrase 'tax arrear' is defined in the Amnesty Scheme as meaning the amount of tax, interest or penalty determined under the Income Tax Act or the Wealth-tax Act, in respect of which an appeal is pending before the Commissioner of Income Tax (Appeals) or the Commissioner of Wealth-tax (Appeals) as on the 29th day of February, 2016. For ease of reference the relevant provisions are extracted hereunder: 201. (1) In this Scheme, unless the context otherwise requires,- ( a) xxx ( b) xxx ( c) xxx ( d) xxx ( e) xxx ( f) xxx ( g) xxx ( h) tax arrear means, the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment or reassessment for any of the assessment years, in consequence of a search initiated under Section 37A or requisition made under Section 37B of the Wealth-tax Act if it relates to any tax arrear; ( ii) relating to an assessment or reassessment in respect of which a survey conducted under section 133A of the Income-tax Act or section 38A of the Wealth-tax Act, has a bearing if it relates to any tax arrear; ( iii) relating to an assessment year in respect of which prosecution has been instituted or or before the date of filing of declaration under section 202; ( iv) relating to any undisclosed income from a source located outside india or undisclosed asset located outside India; ( v) relating to an assessment or reassessment made on the basis of information received under an agreement referred to in section 90 or section 90A of the Income-tax Act, if it relates to any tax arrear; Thus, an overall reading of the Scheme indicates that the intention is to grant an amnesty to a declarant, who declares his details with regard to disputed tax, interest or penalty, and the amnesty is to be granted to the extent contemplated in the Amnesty Scheme. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he declarations submitted by the petitioners were in respect of penalties that were imposed on them by the authorities concerned. It is also not in dispute that in the declaration, the petitioners had offered to pay 25% of the mandatory penalties that were imposed on them. The contention of the Department is essentially that, inasmuch as there is a reference to a payment of tax and interest payable on the total income finally determined, along with 25% of the minimum penalty leviable, the Scheme must be intended to cover only such penalties as have been imposed on an assessee along with the assessment order. The clarification of the CBDT in the context of a penalty order under Section 271(C) or 271 (C) (A) of the Income Tax Act also suggests that, such penalties, as are not linked to assessment proceedings, would not be covered under the Scheme. On an overall consideration of the Scheme, however, I do not see any scope for such a restrictive interpretation of the ambit of the Amnesty Scheme, in the manner suggested by the learned counsel for the respondents. Firstly, the definition of tax arrears does not exclude a situation where the dispute of an assessee is only in respect of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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