TMI Blog2019 (3) TMI 1268X X X X Extracts X X X X X X X X Extracts X X X X ..... e self assessed tax or advance tax under the Act, for the purpose of discharging the assessee's liability under the said scheme, the same cannot be readily presumed. To reiterate these provisions provided for two separate compartments between the assessment proceedings under the said Act and declaration of undisclosed income under the said scheme. The self assessed tax and advance tax would be adjusted against an assessee's liabilities arising in the assessment under the said Act and cannot be transposed for the purpose of discharging the liability to pay tax, surcharge or penalty by a declarant of undisclosed income under the said scheme. The reference to the Rules or the formant for making declaration or payment would not change this provision. Nothing contained in the Rules or the formats prescribed therein would indicate any intention on the part of the legislature to grant the benefit of advance tax or self assessed tax for the purpose of the said scheme. In any case, such right had to be recognized under the Act and cannot be interpreted on the strength of prescribed formants for making declaration. CBDT Circular dated 30.6.2016 has clarified the provision in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the scheme, the declaration must fail and the action of the Revenue Authorities must be confirmed. In relation to those assessment years where without any adjustment of advance tax or self assessed tax, deposits made by the petitioner were sufficient to cover the tax, surcharge and penalty under the scheme by the due dates, such declaration must be accepted. - WRIT PETITION NO. 14709 OF 2018 WITH WRIT PETITION NO.14710 OF 2018 - - - Dated:- 8-3-2019 - AKIL KURESHI M.S. SANKLECHA, JJ. Mr. Mihir Naniwadekar with Mr. Rohan Deshpande and Ms. Alisha Pinto, for the Petitioner in both the Petitions. Mr. Sham Walve, for Respondent Nos. 1 and 2 in both the Petitions. ORAL JUDGMENT: (Per Akil Kureshi, J.) 1. These Petitions involve common question of law. They have been heard together and would be disposed of by this common judgment. For convenience, we may record facts from Writ Petition No.14709 of 2010. 2. Petitioner is an individual. Petitioner has challenged a decision of the Revenue Authority in not accepting the Petitioner's declaration under Income Tax Declaration Scheme, 2016 (herein after referred to as Scheme of 2016). Petitioner has further cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent dates as under: (i) An amount of ₹ 18,33,690/ was paid on November 25, 2016 i.e. before the prescribed date of November 30, 2016; (ii) An amount of ₹ 18,33,690/ was paid on March 27, 2017, i.e. before the prescribed date of March 31, 2017; (iii) Lastly, the balance amount of ₹ 36,67,385/ was paid on September 27, 2017. 7. We may note that, the total amount paid by the Petitioner as noted above along with the said sum of ₹ 8,19,465/ was short by ₹ 4/ as compared to the requirement arising under the said Scheme. Petitioner points out that this short fall of sum of ₹ 4/ was on account of pure oversight and calculation error and should not be allowed to defeat the Petitioner's declaration under the said Scheme since the same was otherwise in order in all respects. 8. We may record that, this short fall of ₹ 4/ was not the central controversy between the two sides. In other words, had this been the only ground for rejecting Petitioner's declaration, we would have readily granted relief to the Petitioner as prayed. While examining the legal dispute between the two sides, we would eliminate this factor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said Scheme and prescribed format for making declaration to contend that, there is clear intention on the part of the legislature to grant such adjustments. (iv) Counsel sought to distinguish earlier similar income declaration schemes which contained a specific bar against any adjustment of taxes paid in the past. In this context, the Counsel also sought to distinguish the decision of Division Bench of this Court in Earnest Business Services Pvt. Ltd. v/s. Commissioner of Income Tax and Others reported in 393 ITR 453 , which was rendered in the context of the Voluntary Disclosure of Income Scheme, 1977 (in short VDIS ); (v) Counsel placed reliance on the decision of the Division Bench of the Delhi High Court in Kumudam Publications Pvt. Ltd., v/s. CBDT reported in 393 ITR 599 , in which, in the context of the present Scheme, Delhi High Court held that adjustment of advance tax and self assessment tax would be permissible; 12. On the other hand, learned Counsel Shri Walve, for the Revenue opposed the Petitions, contending that: (i) The said Scheme makes special provisions for disclosure of undisclosed income. The same must be construed strictly ; (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to tax and surcharge as prescribed in the said provision. Section 184 reads as under: 184(1) Notwithstanding anything contained in the Income Tax Act or in any Finance Act, the undisclosed income declared under section 183within the time specified therein shall be chargeable to tax at the rate of thirty per cent of such undisclosed income. (2) The amount of tax chargeable under sub section (1) shall be increased by a surcharge, for the purpose of the Union, to be called the Krishi Kalyan Cess on tax calculated at the rate of twenty five per cent of such tax so as to fulfill the commitment of the Government for the welfare of the farmers. Section 185 of the Act pertains to penalty and reads as under: 185: Notwithstanding anything contained in the Income Tax Act or in any Finance Act, the person making a declaration of undisclosed income shall in addition to tax and surcharge under Section 184, be liable to penalty at the rate of twenty five percent of such tax. Section 186 pertains to the manner of declaration. Section 187 of the Act lays down the time frame for making payment of the tax. Subsection (1) of Section 187 of the Act provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in relation to the declaration of undisclosed income by the Assessee. A declaration would be made as provided under sub section (1) of Section 183. The liability of an assessee upon such declaration would be computed for payment of tax and surcharge as prescribed in sub section (1) and (2) of Section 184 and penalty under Section 185 of the Act. Such amount would be deposited within the time prescribed by the Government of India as envisaged in sub section (1) of Section 187 of the Ac. Scheme also contains provisions for the consequence of the declaration being accepted as well as the circumstances, under which, said declaration would be rendered non est as also the consequences thereof. To appreciate the Petitioner's contention of the adjustment of advance tax and self assessed tax, therefore, may be seen in light of such provisions of the Scheme. 15 While doing so, we must notice yet another aspect, emerging from the Scheme. As noted, upon the declaration of undisclosed income being made, liability to pay tax with surcharge arises under Section 184 and that of penalty under Section 185. Both these Sections start with the non obstinate clause providing that notwithstandi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ike the 1961 Act, which obliges every person by whom tax is payable to disclose and pay the tax payable on its income at the peril of penalty and prosecution, if income is not disclosed and taxes thereon not paid. Similarly, the rate of tax is also different under the 1961 Act from that under the Scheme of 1997 Act. In fact, it is one flat rate and not at progressive rate as under the 1961 Act. Therefore, as the tax payable under the Scheme is different and distinct from the tax payable under the 1961 Act, the benefit of tax paid on the undisclosed income as and by way of tax deduction at source under the 1961 Act, cannot be availed under the Scheme. This is also evident from section 64 of the Scheme providing notwithstanding anything contained in the Income Tax Act or Finance Act, income shall be charged in respect of income so declared... Thus, the charge is different. 17 It is undisputed that the Scheme does not make any specific provision for adjustment of any of the pre deposited taxes such as advance tax or self assessment tax or even tax deducted at source. 18. The analysis of the scheme would show that in absence of such a scheme, an assessee who has intentional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the Rules or the formats prescribed therein would indicate any intention on the part of the legislature to grant the benefit of advance tax or self assessed tax for the purpose of the said scheme. In any case, such right had to be recognized under the Act and cannot be interpreted on the strength of prescribed formants for making declaration. We are conscious that CBDT Circular dated 30.6.2016 has clarified the provision in relation to the tax deducted at source, providing that adjustment under the scheme would be permissible in cases where relation between the income declared under the scheme and the advance tax can be established and such tax has not been claimed in the return of income filed for any assessment year. This clarification made by the CBDT would neither indicate that the legislature while framing the scheme envisaged the adjustment of other taxes namely the advance tax or self assessed tax, nor would state different treatments given to the two kinds of taxes rendered the provisions of the said scheme ultra virus, the constitution being in violation of Article 14 of the Constitution. The CBDT exercises its power vested under Section 119 of the Act. As is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee of undisclosed income for the particular assessment year fulfills all requirement of the scheme, there is no reason why such a declarant should not get benefit of such declaration simply because in relation to other assessment years, the declaration may fail for any reason. 23. Sum total of this discussion would be that in relation to those assessment years where the petitioner relied on the adjustment of self assessed tax or advance tax for making good, the requirement of depositing tax, surcharge and penalty under the scheme, the declaration must fail and the action of the Revenue Authorities must be confirmed. In relation to those assessment years where without any adjustment of advance tax or self assessed tax, deposits made by the petitioner were sufficient to cover the tax, surcharge and penalty under the scheme by the due dates, such declaration must be accepted. 24. In the second petition, barring change in figures, all relevant facts are identical. We have, therefore, not discussed the facts separately. 25. The petitions are, therefore, disposed of with following directions : (i) In Writ Petition No. 14709 of 2018, the petitioner's declarat ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
