Court Upholds Denial of Time Extension & Refund Request Under Income Disclosure Scheme

The court rejected the writ application, upholding the decision to deny the extension of time for the payment of the last installment under the Income Disclosure Scheme, 2016 (IDS). Additionally, the court refused the request for a refund or adjustment of the amounts paid in the first and second installments, emphasizing the strict adherence to the scheme's provisions and the limited scope for condoning delays under section 119 of the Income Tax Act.

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Issues Involved:
1. Extension of time for payment of the last installment of tax under the Income Disclosure Scheme, 2016.
2. Refund or adjustment of the tax amount paid in the first and second installments under the Income Disclosure Scheme, 2016.

Detailed Analysis:

1. Extension of Time for Payment of the Last Installment of Tax:
The writ applicant sought an extension of time for the payment of the last installment of tax under the Income Disclosure Scheme, 2016 (IDS). The scheme required the declarant to pay the tax, surcharge, and penalty by specified dates. The applicant paid the first two installments on time but failed to pay the last installment due to being remanded in judicial custody. The applicant’s request for an extension was rejected by the Commissioner and later by the CBDT, stating that the declarant had sufficient time to arrange funds even while on bail and that the situation was not beyond the declarant’s control. The court upheld this decision, emphasizing that the scheme’s provisions, particularly regarding the finality of declarations and payments, must be strictly adhered to. The court noted that the powers under section 119 of the Income Tax Act to condone delays should only be exercised in rare and exceptional cases, which did not apply here.

2. Refund or Adjustment of the Tax Amount Paid in the First and Second Installments:
The writ applicant alternatively sought a refund or adjustment of the tax amount already paid in the first and second installments under the IDS. The court referred to Clause 191 of the scheme, which explicitly states that any amount of tax paid under the scheme is not refundable. The court also noted that the failure to pay the last installment resulted in the declaration being deemed never to have been made, as per Clause 187(3) of the scheme. The court distinguished this case from others cited by the applicant, such as the Madhya Pradesh High Court’s decision in Sangeeta Agrawal, where the Supreme Court directed the refund or adjustment of amounts paid under a non-compliant declaration. The court found that in the present case, the payments were made in accordance with the scheme, and the issue was the failure to pay the last installment on time. Therefore, the court concluded that the applicant was not entitled to a refund or adjustment of the amounts already paid.

Conclusion:
The court rejected the writ application, upholding the decision to deny the extension of time for the payment of the last installment under the IDS and refusing the request for a refund or adjustment of the amounts paid in the first and second installments. The court emphasized the importance of adhering to the scheme’s provisions and the limited scope for condoning delays under section 119 of the Income Tax Act.

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