Appeal allowed due to procedural error in tax declaration rejection under Voluntary Compliance Encouragement Scheme, 2013.

The appeal was allowed as the rejection of the tax declaration under the Voluntary Compliance Encouragement Scheme, 2013, was deemed erroneous due to the competent authority's failure to adhere to the prescribed notice issuance timeline. The court emphasized the importance of procedural compliance and set aside the impugned order, highlighting that the initiation of proceedings against the appellant did not preclude them from filing a declaration as per Section 106 of the Finance Act, 2013.

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Appeal against rejection of a declaration under the Voluntary Compliance Encouragement Scheme, 2013 for declared tax dues of Rs. 6,82,375 relating to the period Oct 2007-Dec 2012 concerning "construction of residential complex." Rejection rested on initiation of proceedings on 1st March 2013. Scheme conditions in Section 106, Finance Act, 2013 require that the declarant "should not have been subject to investigation or served with a notice as on 31st March 2013." Circular No. 170/5/2013-S.T. (8 Aug 2013) clarified there was "no bar on filing of declaration by an assessee against whom an inquiry, investigation or audit has been initiated after 1st March 2013." Reliance placed on precedents (Siddhi Vinayaka Enterprises; V.S. Enterprises). Record shows the show cause notice was issued on 18th August 2015, and the notice proposing rejection ought to have been issued within 30 days of filing the declaration. Since the competent authority failed to comply with the scheme's procedural timelines, the rejection was held erroneous; impugned order set aside and appeal allowed.

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