Court rejects Petitioner's tax declarations for 2013-14 and 2014-15, allows appeal for 2011-12 and 2012-13.

The Court upheld the Revenue Authority's rejection of the Petitioner's declaration for assessment years 2013-14 and 2014-15 due to the inability to adjust advance tax, self-assessed tax, and TDS under the Income Tax Declaration Scheme, 2016. However, the Petitioner's declaration for assessment years 2011-12 and 2012-13 was accepted, leading to the setting aside of reassessment orders and prosecution notices for those years. The Petitioner was permitted to appeal for the failed declarations by a specified date, and the Court did not grant the return of deposited amounts for the failed declarations.

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Issues Involved:
1. Validity of the Revenue Authority's rejection of the Petitioner's declaration under the Income Tax Declaration Scheme, 2016.
2. Legality of reassessment notices and orders issued by the Assessing Officer for the assessment years covered under the declaration.
3. Validity of prosecution notices issued under Section 276CC of the Income Tax Act, 1961.
4. Adjustment of advance tax, self-assessed tax, and TDS towards the Petitioner's liability under the Scheme.
5. Segregation of declaration for different assessment years under the Scheme.

Issue-Wise Detailed Analysis:

1. Validity of the Revenue Authority's Rejection of the Petitioner's Declaration:
The Petitioner challenged the Revenue Authority's decision to not accept his declaration under the Income Tax Declaration Scheme, 2016. The Scheme, framed under Section 183 of the Finance Act, 2006, allowed assessees to declare undisclosed income and avoid penalties and prosecution, provided they fulfilled the conditions of the Scheme. The Petitioner declared undisclosed income for the assessment years 2011-12 to 2014-15 and paid the required tax, surcharge, and penalty, albeit with a minor shortfall of Rs. 4 due to an oversight. The Court noted that this shortfall was not the central controversy. The main issue was whether advance tax, self-assessed tax, and TDS paid prior to the declaration could be adjusted towards the Petitioner's liability under the Scheme. The Court held that the Scheme did not provide for such adjustments and emphasized that the Scheme is a complete code with specific provisions for declaration, tax, surcharge, and penalty payments.

2. Legality of Reassessment Notices and Orders:
The Petitioner also challenged the reassessment notices and orders issued by the Assessing Officer for the assessment years covered under the declaration. The Court examined the provisions of the Scheme and concluded that the Scheme did not allow for the adjustment of advance tax or self-assessed tax towards the liability under the Scheme. Consequently, the declarations for the assessment years where such adjustments were claimed failed, and the reassessment notices and orders for those years were upheld.

3. Validity of Prosecution Notices Issued Under Section 276CC:
The Petitioner challenged the prosecution notices issued under Section 276CC of the Income Tax Act, 1961. The Court held that for the assessment years where the Petitioner's declaration under the Scheme was accepted, the prosecution notices would be set aside. However, for the assessment years where the declaration failed, the prosecution notices were upheld.

4. Adjustment of Advance Tax, Self-Assessed Tax, and TDS:
The Petitioner argued that the advance tax, self-assessed tax, and TDS paid prior to the declaration should be adjusted towards his liability under the Scheme. The Court analyzed the provisions of the Scheme and relevant case law, including the decision in Earnest Business Services Pvt. Ltd. v/s. Commissioner of Income Tax and Others, which held that the Scheme is distinct from the Income Tax Act, 1961, and does not allow for such adjustments. The Court also considered the CBDT Circular No. 25 of 2016, which allowed for the adjustment of TDS under specific conditions but did not extend this benefit to advance tax or self-assessed tax. The Court concluded that the Scheme did not provide for the adjustment of advance tax or self-assessed tax and rejected the Petitioner's contention.

5. Segregation of Declaration for Different Assessment Years:
The Petitioner contended that the declarations for different assessment years should be considered separately. The Court held that the Scheme did not require a composite declaration for multiple assessment years and allowed for separate declarations. Therefore, the declarations for the assessment years where the Petitioner did not claim adjustments of advance tax or self-assessed tax and made sufficient payments were accepted.

Judgment Summary:
The Court disposed of the petitions with the following directions:
1. In Writ Petition No. 14709 of 2018, the Petitioner's declaration for assessment years 2013-14 and 2014-15 failed, and the Revenue Authority's action was confirmed.
2. In Writ Petition No. 14710 of 2018, the Petitioner's declaration for assessment years 2011-12 and 2012-13 was accepted, and the reassessment orders and prosecution notices for those years were set aside.
3. In Writ Petition No. 14710 of 2018, the Petitioner's declaration for assessment years 2011-12 and 2014-15 failed, and the Revenue Authority's action was confirmed.
4. In Writ Petition No. 14710 of 2018, the Petitioner's declaration for assessment years 2012-13 and 2013-14 was accepted, and the reassessment orders and prosecution notices for those years were set aside.
5. The Petitioner was allowed to file appeals before the Appellate Commissioner for the assessment years where the declaration failed, without objection on limitation, if filed by April 30, 2019.
6. The Court did not entertain the Petitioner's request for the return of deposited amounts for the failed declarations, leaving it open for the Petitioner to pursue remedies under the law.

Both petitions were disposed of accordingly.

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