TaxTMI 
TaxTMI 
2017 (4) TMI 359
X X X X Extracts X X X X
X X X X Extracts X X X X
....company and its directors etc. from the financial year 2009-2010. As a consequence, the petitioner could not appoint any statutory auditor. Accounts could not be made ready for subsequent years in deference to the disputes and pending litigation. The disputes related to the petitioner's share capital. Resultantly, in the absence of audited accounts, no return of income was filed from financial year 2009-10, i.e. assessment year (AY) 2010-11 till date. The petitioner avers that despite its inability to file income tax returns, it paid advance tax through various amounts, on 23 occasions in the past 5 years or so; details thereof are furnished in a tabular chart, which reveals that a total sum of Rs. 14,98,30,000/- was paid through advance tax. The petitioner says that in addition, a total sum of Rs. 1,50,93,433/- was paid on its account, for the same period. Thus a total sum of Rs. 16,49,23,433/- has been paid towards income tax liabilities by or on behalf of the petitioner. 3. Anticipating that proceedings may be initiated by the Income Tax Department for the Petitioner's failure to file returns required under Section 139 of the Income Tax Act, the petitioner applied under Sec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ned order of the respondents disregards the said credit even though complete details of the same were stated by Petitioner in the declaration in Form 1 along with required proof. Therefore, the petitioner urges that the impugned order is in disregard of the intent and ambit of the IDS and cannot be sustained. When TDS credit is specifically permissible, the denial of credit to advance tax paid, is illogical and illegal. The petitioner argues that there is no justification for denying the credit of advance tax paid and the TDS paid on its behalf of Petitioner in determining the tax payable under the Scheme. Any other interpretation would fall foul of the provisions of the Income Tax Act and would result in unjust enrichment of the Revenue and the petitioner assessee being subjected to double taxation without the authority of law. 6. Mr. S. Ganesh, learned senior counsel for the petitioner argued that the terms of IDS and its intent is to deal with a situation that tax would have been paid before declaration is made under Form I and the assessee is required to make a disclosure of the same in point 11 of the Form 1. Counsel states that the petitioner made complete disclosure of adva....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rates. The Revenue emphasizes and highlights Section 184(1), especially the non-obstante clause which overrides the provisions of the Act or in any Finance Act. Likewise, it is urged that Section 185 being a non-obstante clause to override other provisions of the Act or other Finance Acts, directs that one declaring undisclosed income in addition to tax and surcharge under Section 184 "shall be liable to penalty" @ 25% of such tax. Section 187 again is emphasized to say that it mandates that tax surcharge and penalty should be paid on or before the date notified by the Central Government. 9. It is submitted that the Central Government issued notification no. 32/2016 on 19.05.2016 - which was amended later on 20.07.2016. These provided for the time for payment of tax, surcharge and penalty. Similarly, reliance is placed upon Section 188 which states that income declared in accordance with Section 183 will not be included in the total income of declarant in any assessment year under the Income Tax Act if the surcharge and penalty is paid by the specified date under Section 187. To say that in such cases where Parliament intended that the provisions of a self-contained code are to op....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t has chosen to apply under. In short, submits the Revenue, if the petitioner were to be allowed to opt to the Scheme and given credit for amounts paid as advance tax, it would be allowed to achieve indirectly what it is forbidden to secure directly. 13. The relevant provision of the Scheme in the Finance Act, 2016 are as follows: "Provisions of the Scheme contained in the Finance Act, 2016 182. In this Scheme, unless the context otherwise requires,-- (a) "declarant" means a person making the declaration under sub-section (1) of section 183; (b) "Income-tax Act" means the Income-tax Act, 1961; (c) all other words and expressions used herein but not defined and defined in the Income-tax Act shall have the meanings respectively assigned to them in that Act. Declaration of undisclosed income. 183. (1) Subject to the provisions of this Scheme, any person may make, on or after the date of commencement of this Scheme but before a date to be notified by the Central Government in the Official Gazette, a declaration in respect of any income chargeable to tax under the Income-tax Act for any assessment year prior to the assessment year beginning on the 1st day of April, 2017- (a) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mpetent to act on his behalf; (b) where the declarant is a Hindu undivided family, by the Karta, and where the Karta is absent from India or is mentally incapacitated from attending to his affairs, by any other adult member of such family; (c) where the declarant is a company, by the managing director thereof, or where for any unavoidable reason such managing director is not able to sign the declaration or where there is no managing director, by any director thereof; (d) where the declarant is a firm, by the managing partner thereof, or where for any unavoidable reason such managing partner is not able to sign the declaration, or where there is no managing partner as such, by any partner thereof, not being a minor; (e) where the declarant is any other association, by any member of the association or the principal officer thereof; and (f) where the declarant is any other person, by that person or by some other person competent to act on his behalf. (3) Any person, who has made a declaration under sub-section (1) of section 183 in respect of his income or as a representative assessee in respect of the income of any other person, shall not be entitled to make any other declarati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ained in any declaration made under section 183 shall be admissible in evidence against the declarant for the purpose of any proceeding relating to imposition of penalty, other than the penalty leviable under section 185, or for the purposes of prosecution under the Income-tax Act or the Wealth-tax Act, 1957." The avowed objective of the Scheme is to enable assessees who did not file their returns, an opportunity to do so. In the words of the Supreme Court in various decisions (primarily relied upon by the Revenue) such schemes are tax composition schemes or tax litigation settlement schemes, by their nature and effect. 14. A salient- and perhaps most distinguishing feature which sets apart the present Scheme from the Kar Vivad Samadhan Scheme,1998 [hereafter "the 1998 Scheme"] is that there is no express bar to inclusion of previously paid amounts, or tax arrears. In the 1998 scheme, to the extent it provided for direct tax settlement, the following condition was stipulated: "(i) in relation to direct tax enactment, the amount of tax, penalty or interest determined on or before the 31st day of March, 1998 under that enactment in respect of an assessment year as modified in cons....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed by the scheme. 16. Granted, such schemes are to be seen as containing special dispensations, etc and interpreted in a "stand alone" or sui generis manner. Equally, those who seek its benefits are to go by it. But there should be something which provides a clear insight that Parliament wished that such past amounts are not to be reckoned at all, for purposes of payments. All that the words of the statute enjoin are that the tax and surcharge amounts under the scheme "shall be paid on or before a date to be notified". These words necessarily refer to all payments. They are not limited in their meaning to only what is paid immediately before, or in the proximity of the declaration filed. 17. The provision of Section 182 itself states that for the purposes of the IDS, undefined terms and expressions shall be in terms of the Income Tax Act, by incorporating those into the Finance Act and the scheme. "Undisclosed income" which is the foundational provision to be invoked by declarants, thus is based on the definition under the Income Tax Act (Section 132 (1) (c)) the provision reading as to include "money, bullion, jewellery or other valuable article or thing and such money, bullion,....