Credit for advance and self-assessment tax payments against Income Declaration Scheme 2016 liability upheld; denial order quashed.

The dominant issue was whether taxes already paid as advance tax and self-assessment tax for the relevant AY could be given credit against liability under the Income Declaration Scheme, 2016. The Revenue accepted credit for advance tax but withheld credit for self-assessment tax citing a contrary Board view and awaiting policy clarification. HC held that amounts paid for the relevant AYs must be credited against IDS liability, relying on prior HC precedents that mandate such adjustment notwithstanding administrative hesitation. Consequently, denial of credit for self-assessment tax was held unsustainable and the impugned assessment order was quashed and set aside.

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Petitioner filed ROI for AY 2017-18 declaring Rs. 8,36,800. Respondent issued notice under Section 148, alleging liability of Rs. 26,05,390 on declared income under the Income Declaration Scheme, 2016 (IDS); Petitioner had paid only part and was called to pay balance. Petitioner contended advance tax and self-assessment tax paid for prior years and payments under IDS amounted to Rs. 26,74,784, exceeding the IDS liability; Respondent initially refused to adjust those amounts. Respondent agreed to credit Rs. 4,50,000 (advance tax) but sought legal/CBDT opinion on crediting self-assessment tax of Rs. 15,78,210. Court held that "any amount paid by Petitioner for those relevant Assessment Years, credit has to be given" and found support in precedent. Assessment order, demand notice and penalty dated 31-03-2022 were quashed and set aside. Respondent directed to issue Form 4 under the IDS within four weeks after giving credit to all amounts paid, including advance and self-assessment tax.

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