2020 (10) TMI 103 - HC - Income Tax

Court remands non-payment issue under Income Tax Declaration Scheme for merit-based assessment. Review required per Notification.

The Court remanded the issue of non-payment of the third instalment under the Income Tax Declaration Scheme, 2016 to the Principal Commissioner of Income ... Non-payment of the third instalment by the petitioner under the Income Tax Declaration Scheme, 2016 - Extension of period for completing payments under the declarations made vide sub-Section (1) of Section 183 of the Finance Act, 2016 - appropriate instructions connected to the Notification dated 13th September, 2019 and numbered as S.O. 4455(E) of the Ministry of Finance, Department of Revenue, Government of India - HELD THAT:- Such payment is required to be completed on and by 31st January, 2020, together with the applicable interest. This Court is of the further view that the prayer of the petitioner for extension of time deserves to be attended to by the Revenue Authority under the Notification dated 13th December, 2019 since such prayer was live and pending during the period of subsistence of the Notification entitling the petitioner to retrospective consideration. In the backdrop of the above discussion, on the particular facts of this case, the issue is remanded to the respondent no.2/the Principal Commissioner of Income Tax to consider the same on merits in the context of the observations made hereinabove. It is expected that the above directed exercise shall be completed not later than a period of six weeks from the date of communication of this order. Issues:Non-payment of third instalment under the Income Tax Declaration Scheme, 2016; Extension of time for payment under Notification dated 13th December, 2019; Retrospective effect of the Notification; Consideration of the petitioner's request for extension; Remand of the issue to the Principal Commissioner of Income Tax.Analysis:The petitioner failed to pay the third instalment under the Income Tax Declaration Scheme, 2016 by the due date of 30th September, 2017, citing illness as the reason for the delay. Despite acknowledging the petitioner's income declaration, the Revenue Authority demanded additional tax, surcharge, and penalty in three instalments. The petitioner paid the first two instalments but could not pay the third instalment on time due to illness. A representation seeking an extension of time to pay the third instalment was submitted to the Revenue Authority on 4th December, 2017, which remained undecided, leading to the filing of a writ petition.The petitioner relied on the Notification dated 13th December, 2019, which extended the payment period for declarations made under Section 183 of the Finance Act, 2016 until 31st January, 2020, with retrospective effect. The petitioner sought parity under this Notification, arguing that it was issued during the pendency of the writ petition, and neither party could act without the Court's leave. The Revenue Authority agreed to assess the impact of the Notification on the petitioner if directed by the Court within a reasonable time.The Court found it appropriate to reproduce the Notification dated 13th December, 2019, which allowed payment of tax and surcharge with interest by 31st January, 2020, for those who had declared income but not paid by the due date. The Court held that neither party could act during the Notification period without Court's leave, and the petitioner's request for extension deserved consideration under the Notification. Consequently, the issue was remanded to the Principal Commissioner of Income Tax for a merit-based assessment within six weeks from the date of the order's communication.In conclusion, the writ petition and connected applications were disposed of, emphasizing the need for the Revenue Authority to review the petitioner's case in light of the Notification dated 13th December, 2019, and make a decision within the stipulated timeframe.