TMI Blog2019 (8) TMI 1069X X X X Extracts X X X X X X X X Extracts X X X X ..... o Additional Commissioner of Income Tax, Special Range-4 who in turn was authorised to make the impugned order merits acceptance. Moreover, since this is a case of suppression of material facts the Respondent No.1 was duty bound to give effect to the provision provided under Section 193 of the FA, 2016. Therefore, where the jurisdictional Pr. CIT/CIT finds a declaration to be based on such misrepresentation or suppression of facts, he would not be precluded from holding the declaration itself to be void in terms of Section 193 of the FA, 2016. The Court accepts the contention of the Respondent that there is no provision as such in the IDS to afford the declarant a hearing prior to passing an order holding such declaration to be void for being in contravention of Section 193 of the FA, 2016. For all of the aforementioned reasons, the Court finds no error having been committed by Respondent No.1 in passing the impugned order. - W.P. (C) 6541/2017 And 6543/2017 - - - Dated:- 21-8-2019 - JUSTICE S. MURALIDHAR And JUSTICE TALWANT SINGH Petitioner: Mr. Rakesh Tikku, Senior Advocate with Mr. P. Roy Choudhary, Mr. Lokesh Bhardwaj, Ms. Jyotsna Mehta And Mr. Sushil Kumar Gupta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set shall be determined in such manner, as may be prescribed. (4) No deduction in respect of any expenditure or allowance shall be allowed against the income in respect of which declaration under this section is made. 4. The declaration had to be made to the Principal Commissioner or the Commissioner in Form-1 as per Rule 4 (1) of the Income Declaration Scheme Rules, 2016 ( IDS Rules, 2016 ). After the issuance of acknowledgement in Form 2 that the declarant had paid the tax, surcharge and penalty, the Principal Commissioner or the Commissioner had to grant the declarant a Certificate in terms of Form-4. Rule 4 of the IDS Rules reads as under: Declaration of income or income in the form of investment in any asset. 4. (1) A declaration of income or income in the form of investment in any asset under section 183 shall be made in Form-1. (2) The declaration shall be furnished: (a) electronically under digital signature; or (b) through transmission of data in the form electronically under electronic verification code; or (c) in print form, to the concerned Principal Commissioner or the Commissioner who has the jurisdiction over the declarant. (3) The Princi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Petitioner in W.P. (C) No. 6541/2017 is concerned, the DA issued an acknowledgement in Form-2 under Rule 4 (3) of the IDS Rules determining the amounts payable as under: Tax- 2,48,07,525/- Surcharge- 62,01,881/- Penalty- 62,01,881/-. 8. A separate acknowledgement was issued by the DA in respect of Vaibhav Jain, the Petitioner in W.P. (C) No. 6543/2017. Thereafter, the Petitioners made full payment of the tax, penalty and surcharge and submitted Form- 3 to the PCIT (9), New Delhi on 19th December, 2016. 9. The PCIT, CPC, Bangalore accepted the two declarations made by the Petitioners under Section 183 of FA, 2016, with reference to the undisclosed income of ₹ 8,26,91,750/- for each petitioner and issued a certificate in Form-4 read with Rule 4 (5) of the IDS Rules. Impugned order of the PCIT 10. Subsequently, the PCIT (4), New Delhi passed the impugned order on 9th June, 2017 under Section 183 of the FA 2016, holding that the above declaration of income of ₹ 8,26,91,750/- by each of the Petitioners was made by suppression and misrepresentation of facts. Therefore, both declarations were held to be void . 11. The PCIT referred to the rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jain 42,00,000/- 5. Mubarak Lubricants P. Ltd. Shri Satyender Kumar Jain 12,00,000/- 6. Puniya Leather P. Ltd. Shri Satyender Kumar Jain 35,00,000/- 7. Virat Vintrade P. Ltd. Shri Satyender Kumar Jain 40,62,500/- 8. R.P.Vyapaar P.Ltd. Shri Satyender Kumar Jain 15,37,500/- 9. Salona Dealtrade P.Ltd. Shri Satyender Kumar Jain 22,50,000/- 10. Swarnim Commosale P. Ltd. Shri Satyender Kumar Jain 22,50,000/- 12. The PCIT in the impugned order noted that provisional attachment orders under Section 24 (4) of the PBPT Act were passed on 24th May, 2017 and in respect of the same, observed that on careful consideration of all material available, it had been decided that each of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r passed under Section 183 of the Act was a quasi-judicial one and could not have been passed without prior notice to each of the Petitioners. In support of this proposition, reliance is placed on the decisions in East India Commercial Communication Company Ltd. Calcutta v. The Collector of Customs, Calcutta AIR 1962 SC 1893, Union of India v. Madhumilan Syntex Private Limited (1988) 3 SCC 348 and Metal Forgings. v. Union of India (2003) 2 SCC 36, C.B. Gautam v. Union of India (1993) 1 SCC 78. 17. It is further submitted that the impugned order was based on a report, a copy of which was never provided to either of the Petitioners. Thirdly, it is submitted that the PCIT-4, New Delhi or the DA had no jurisdiction to pass the impugned order since a declaration was made to the PCIT, CPC, Bangalore. This was a jurisdictional defect which went to the root of the matter. It is pointed out that each of the Petitioners had given full particulars of the shares invested and the declarations had in fact been accepted by the PCIT, CPC, Bangalore, by issuing an acknowledgement in Form No.4. 18. It is submitted that the reliance on the order dated 24th May, 2017 passed under the PBPT A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justified the rejection of the declarations. Analysis and reasons 21. The above submissions have been considered. The purpose underlying the enactment of the IDS, which was introduced under the FA, 2016, has been set out in the Notes on Clauses to the FA, 2016, which read as under: An opportunity is proposed to be provided to persons who have not paid full taxes in the past to come forward and declare the undisclosed income and pay tax, surcharge and penalty totalling in all to forty-five per cent of such undisclosed income declared. The scheme is proposed to be brought into effect from 1st June 2016 and will remain open up to the date to be notified by the Central Government in the official gazette. The scheme is proposed to be made applicable in respect of undisclosed income of any financial year upto 2015-16. Tax is proposed to be charged at the rate of thirty per cent on the declared income as increased by surcharge at the rate of twenty five per cent of tax payable (to be called the Krishi Kalyan cess). A penalty at the rate of twenty five per cent of tax payable is also proposed to be levied on undisclosed income declared under the scheme. 22. The Not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of any equitable consideration when the statutory provisions of the scheme are stated in such plain language. Seen from the angle of the designated authority, which is created under the Scheme, it is clear that the authority cannot act beyond the provisions of the Scheme itself. The power to accept payment under the Scheme has been prescribed by the statute. There is no scope for the Revenue authorities to imply a provision not specifically provided for which would in any way modify the explicit terms of the Scheme. 25. In the present case, a perusal of the disclosure forms submitted by Assessees reveal that in Column 6, which concerns statement of undisclosed income (as per annexure) , there is a separate statement of undisclosed income where for the three years i.e. 2011, 2012 and 2016, the amounts have been disclosed. In the column title description , it uniformly states, invested in shares in multiple names , whereas for 2011 and 2012 it states, notice of 148 issued after 1st June, 2016 for Indo, Akinchan and Prayas . For 2016, it states invested in shares of multiple names of Akinchan , Prayas and Mangal Yatan. The use of the phrase multiple names is ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed a copy of the order dated 24th May, 2017 passed in respect of the Benamidar i.e. ADPL, which inter-alia notes that the cash that was routed through accommodation entries in the garb of share capital/premium in fact belonged to Mr. Satyender Kumar Jain and that it was at his direction that the entire transaction was orchestrated. It was noted that neither of these two Petitioners was either a Director or Shareholder in the said company. It was noted that the declarants had not provided the name of the Benamidar through whom the investment had been routed and that these facts were all completely within the knowledge of the two Petitioners. These conclusions of the PCIT have not been convincingly countered by either of the Petitioners. In the circumstances, the PCIT was right in concluding that neither of the Petitioners had made a full and true disclosure of all material facts. 31. In Tanna Modi v. CIT, Mumbai (2007) 7 SCC 434 the Supreme Court upheld the action of the Respondent declaring the certificate issued under the Kar Vivad Samadhan Scheme, 1998 to be null and void on account of suppression of facts by the declarant. It was held in para 20 as under: 20. It ..... X X X X Extracts X X X X X X X X Extracts X X X X
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