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2019 (3) TMI 1268
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....declaration as well as orders of assessment passed pursuant to such notices. Petitioner has also challenged notices for prosecution issued by the competent authority under Section 276CC of the Income Tax Act, 1961 (in short "the Act"). 3. The Union Legislature framed said Scheme under Section 183 of the Finance Act, 2006, giving an opportunity to the assessees to make declarations under the said Scheme of undisclosed income. Subject to the declarant fulfilling the conditions contained in the said Scheme and acceptance of the declaration by the authority, the declarant would be spared the penalty and prosecution. We would advert to the provisions of the said Scheme in detail later. 4. The Petitioner, desirous of taking benefit of the said Scheme made a common declaration of undisclosed income for the Assessment Years 2011­12 to Assessment Years 2014­15 on 29th September, 2016. The Petitioner declared his un­disclosed income for the subject Assessment Years, as under:­ Sr. No. A.Y. relevant to undisclosed income Amount of undisclosed income 1 AY 2011­-12 Rs.7,88,617/­ 2 AY 2012-­13 Rs.9,60,883/­ 3 ....
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....s liability to pay tax, surcharge and penalty under the said Scheme. The department contends states that such adjustment can be made only in relation to the tax deducted at source, if the co­relation between such TDS and the declaration of undisclosed income under the Scheme can be established. 10. There is another angle to this controversy. Counsel for the Petitioner pointed out that, in relation to Assessment Years 2011­12 and 2012­13, the amounts deposited by the Petitioner would be sufficient as per the requirements of the said Scheme, even ignoring the Petitioner's main contention of adjustment of advance tax and self assessed tax, since in these years, the Petitioner does not claim benefit of either advance tax or self assessment tax. The department contends that, the declaration of an assessee under the said Scheme would be composite and not­severable for different Assessment Years. Once the Petitioner has made such a declaration for several Assessment Years, said declaration would either to be accepted in its entirety or rejected in toto. In other words, according to the Department, the Petitioner can not claim the benefit of the declaration in relati....
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....rt has laid down certain important principles which have direct applicability in the present case; (iv) Counsel submitted that, in any case, the Petitioner cannot segregate the declaration since the Scheme does not envisaged any such segregation. 13. Having heard the learned Counsel for the parties, we may first take note of the provisions of the said scheme. (a) The Scheme is contained in Chapter IX of the Finance Act, 2016. Section 182 contained in such Chapter defines certain terms for the purpose of the said Scheme. The declarant under clause (a) - means the person making the declaration under sub­section (1) of Section 183. Clause (c) of Section 182 provides that all other words and expressions which are not defined in the said Chapter but defined in the Act would have the same meaning as assigned in the Act; (b) Section 183 of the Act pertains to declaration of undisclosed income. A person desirous of making such a declaration of undisclosed income would make a declaration as provided in subsection (1) of Section 183 of the Act, which reads as under:­ "183.(1) Subject to the provisions of this Scheme, any person may make, on or after the ....
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....the declarant tails to pay the tax, surcharge and penalty before the due date as specified in sub­section (1), the declaration filed by him shall be deemed never to have been made under the Scheme. Section 188 of the Act pertains to undisclosed income declared not to be included in the total income and reads as under:­ "188:­ The amount of undisclosed income declared in accordance with section 183 shall not be included in the total income of the declarant for any assessment year under the Income Tax Act, if the declarant makes the payment of tax and surcharge referred to in Section 184 and the penalty referred to in section 185, by the date specified under sub­section (1) of section 187." Section 189 of the Act provides that a declarant under the said Scheme shall not be entitled in respect of undisclosed income declared or any amount of tax or surcharge paid to re­open any assessment or reassessment made under the Income Tax Act or the Wealth Tax Act or claiming any set off or relief in any appeal in other proceedings in relation to any such assessment or re­assessment. Section 191 of the Act provides that any amount of tax and surcharge or pena....
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....rescribed rates. In other words, Sections 184 and 185 of the Act which are charging provisions of tax, surcharge and penalty respectively are concerned. 16 This Court in case of Earnest Business Services Pvt. Ltd., (supra) in the context of the VDIS had brought out such distinction. It was a case, in which, assessee claimed benefit of TDS for depositing the tax and penalty liability, arising out the declaration under the VDIS 1997. The Court referred to Section 64 of the said Scheme which pertain to charge of tax on voluntarily disclosed income and held and observed as under:­ "We note that the Scheme is a part of the Finance Act, 1997 and it is self contained. The Scheme of 1997 Act is a different and distinct statute from the 1961 Act. The subject matter of tax and rate of tax are different under the Scheme of 1997 Act and under the 1961 Act. Therefore, even though the tax which is payable under the Scheme of 1997 Act, is a tax on income, it is not a charge to tax under Section 4 of the 1961 Act, but an income tax charged to tax under section 64 of the Scheme of 1997 Act. As held by the Supreme Court in Mathuram Agarwal v/s. State of MP [1998] 8 SCC 667, a taxi....
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....ovision in the scheme granting benefit of tax voluntarily paid, or deposited as self­assessed tax or by way of advance tax, a declarant under the scheme cannot claim set off such tax against his liability to pay tax in terms of the provisions contained in the scheme. When as in the present case, the assessee was either depositing or paying such tax, the said scheme was nowhere in horizon. The said scheme makes special provisions for declaration of undisclosed income under Section 187 which provides for the time frame for deposit of tax, surcharge and penalty. Immediately preceding Section 188 provides that the amount of undisclosed income declared would not be included in the total income of the declarant in any assessment year under the Income Tax Act, 1961. Section 184 provides that the declarant under the said scheme shall not be entitled in respect of undisclosed income declared or any amount of tax and surcharge paid to reopen the assessment or reassessment under the Income Tax Act or the Wealth Tax Act. Section 191 provides that any amount of tax and surcharge and penalty paid pursuant to the declaration shall not be refundable. Thus, the scheme ma....
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....atutory provisions. Even otherwise the very nature of tax deducted at source is different from the other two categories namely advance tax and self assessment tax, since tax deducted at source is always relatable to certain income which the assessee would disclose under the said scheme. 21. We have perused the decision of the Delhi High Court in the case of Kumudam Publications Pvt Ltd (supra). The judgment mainly proceeds on the basis of the clarification of CBDT Circular dated 30.6.2016. After taking note of the said clarification, the Court expressed an opinion that the Revenue had made such a clarification which would preclude it from arguing that the advance tax payments in relation to the declaration covered in this scheme cannot be taken into consideration. The Court observed as under:­ "14. Furthermore, the court also is of the opinion that the clarification by the Revenue, that credit for tax deducted at source paid, can be enjoyed for availing the benefit (under the scheme in question) precludes any meaningful argument by it that advance tax payments relative for the assessment years covered by the declaration cannot be taken into consideration as pa....