TMI Blog2023 (12) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... l be chargeable to tax in the previous year in which such declaration is made. We find force in the argument made by the Ld. AR that non-payment of tax under the IDS, 2016 against the income declared cannot change the character of the income declared under IDS, 2016 with respect to character of income assessable in the previous year in which such declaration was made under the Income Tax Act, 1961. In response to the show cause notice assessee has submitted its reply stating that it was the capital gains which was declared under the IDS, 2016 after availing the deduction U/s. 54F of the Act. These facts were not disputed by the Ld. Revenue Authorities. AO while framing the assessment has stated the same as undisclosed income U/s. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failed to pay the taxes payable as per the provisions of the Income Declaration Scheme, 2016 [IDS]. The Ld. AO invoked the provisions of section 197(b) of the IDS, 2016 and concluded that the income declared shall be treated as income of the assessee in the year of declaration and brought the amount of Rs. 50,59,580/- to tax U/s. 68 r.w.s 115BBE of the Act. However, the Ld. AO also issued a show cause notice dated 2/12/2019 as to why the undisclosed income declared in IDS, 2016 should not be taxed and the assessment be completed U/s. 144 of the Act? In response, the assessee filed its reply through ITBA on 9/12/2019 stating that since the taxes could not be paid it was not possible to upload the return. Further, in his reply, the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee is with respect to treatment of the capital gains as undisclosed U/s. 68 r.w.s 115BBE of the Act and levying a higher tax rate of 60%. The assessee also raised the ground regarding the levy of interest U/s. 234A, B and C of the Act. 4. With respect to the first issue, the Ld. AR submitted that the assessee has filed a declaration under IDS-2016 on 28/09/2016 and in Annexure to Form-1 Statement of undisclosed income the assessee has declared an amount of Rs. 50,59,580/- as income from capital gains. Further, the assessee could not pay the taxes as admitted. The ld. AR further submitted that the amount declared in IDS, 2016 shall be eligible to tax under the Income Act, 1961 in the previous year in which such declaratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the IDS, 2016 after availing the deduction U/s. 54F of the Act. These facts were not disputed by the Ld. Revenue Authorities. However, we find that the Ld. AO while framing the assessment has stated the same as undisclosed income U/s. 68 r.w.s 115BBE of the Act instead of taxing the same under capital gains. Merely because the assessee failed to discharge the tax liability under IDS-2016 as declared cannot change the character of the income under which it was declared under the IDS-2016. Further, IDS-2016 is also silent on the nature of income to be taxed in the event of failure by the declarant to pay the taxes. In these circumstances, we are of the considered view that the income of the assessee shall be taxed as capital gains in the han ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
