TaxTMI 
TaxTMI 
2021 (2) TMI 971
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....respondent to refund the tax amount paid in the first and second installment of IDS, 2016. (C)) Pass any other order(s) as this Hon'ble Court may deem fit and more appropriate in order to grant interim relief to the Petitioner. (D) Any other and further relief deemed just and proper be granted in the interest of justice; (E) To provide for the cost of this petition." 2. The writ applicant is an individual. The Central Government framed a scheme for declaration of undisclosed income. Such scheme was framed under the Finance Act of 2016 and was called "The Income Declaration Scheme 2016" (hereinafter to be referred to as 'the Scheme of 2016'). Clause 183 of the said Scheme envisages declaration of undisclosed income. Clause 184 of the said Scheme provides inter alia that notwithstanding anything contained in the Income Tax Act, the undisclosed income declared under clause 183 would be chargeable to tax at the rate of thirty percent of such income and amount of tax so chargeable would be increased by a surcharge with Krishi Kalyan Cess at the rate of twenty-five percent of tax calculated. Under clause 185 of the Scheme, the person making a dec....
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....but no tax, surcharge and penalty referred to in section 184 and section 185 has been paid within the time specified under. Section 187 the undisclosed income shall be chargeable to tax under the Income Tax Act in the previous year in which such declaration is made;" 5. In terms of clause 187 of the said Scheme, the Government of India published in the Official Gazette a notification dated 20.07.2016 specifying the last dates for depositing the tax and penalty in three installments. This shall in substitution of dates previously prescribed in an earlier notification dated 19.05.2016. By the said notification of 20.07.2016, the three dates specified were as under: "(ii) the date on or before which the tax and surcharge is payable under section 184, and the penalty is payable under section 185 in respect of undisclosed income shall be as follows, namely:- (a) the 30th day of November, 2016, for an amount not less than twenty-five percent of such tax, surcharge and penalty; (b) the 31st day of March 2017 for an amount not less than fifty percent of such tax, surcharge and penalty as reduced by the amount paid under clause (a); (c) the 30th day of....
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.....10.2017 that the Magistrate relaxed the condition of appearance before the Court. The writ applicant thereupon immediately reached Gujarat and applied to the departmental authorities under a letter dated 04.10.2017 for extension of time for payment of the last installment of the tax and surcharge and penalty under the said Scheme. Such an application was filed before the Jurisdictional Commissioner as well as before the CBDT. The Commissioner, by the impugned order dated 18.10.2017, conveyed to the petitioner that he had no authority to grant any such extension of time. The CBDT has not yet replied to the writ applicant. At this stage, the present writ application came to be filed. 8. The order dated 18th October, 2017 passed by the Commissioner, referred to above, came to be challenged by the writ applicant herein by filing the Special Civil Application No.22952 of 2017. A Coordinate Bench of this Court disposed of the petition holding as under; "8. Having heard learned counsel for the parties and having perused the documents on record, we may recall, the said Scheme itself contains a specific provision making the provision of section 119 of the Income Tax Act applica....
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.... Thus, nonpayment of any of the installments by the due dates would automatically annul the declaration made by the declarant. Thereupon, the consequences envisaged under the Scheme would follow. 11. Nevertheless, neither the Scheme in general nor section 195 of the said Act conveys any intention of the legislature that the powers of the Board for relaxation of the time limit in terms of sub-section (2) of section 119 of the Income Tax Act were meant to be taken away. In fact, section 195 of the Act made the provision of section 119 of the Income Tax Act specifically applicable to the Scheme. In rare and exceptional cases howsoever few and far between may be they, that may be the powers of the Board to condone delay in terms of subsection (2) of section 119 of the Income Tax Act are not shut out completely in their applicability to the scheme. 12. Counsel for the Revenue, however, vehemently contended that the Board has taken a conscious decision not to make any departure primarily in view of the finality sought to be attached to the declarations and payments envisaged under the Scheme and to avoid any discriminatory application of extensions. Our attention was in....
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....n and specified that in cases, where because of bank transactions failing though the amount was already deposited before the bank before the due date, the amount was not received by the department, time would be suitably extended subject to conditions contained therein.. 15.We are not concluding in this order whether the petitioner has made out sufficient grounds for exercise of the powers of the Board. Nevertheless, we have noted that the relevant facts which include the circumstances under which the petitioner claims incapacity to make the payment of the last installment. It would be for the Board to judge the facts on record and come to the conclusion whether this is a fit case for exercise of powers under sub-section (2) of section 119 of the Act. We request the Board to do so preferably within three months from the date of receipt of copy of this order. If the petitioner is willing to deposit such amount of third installment with reasonable interest as may be directed by the Board, he may indicate so in writing to the Board within 10 days from today. 16.With these observations and directions, the petition is disposed." 9. Pursuant to the aforesaid order pa....
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....hich are found to be solely attributable to the declarant. In view of the above, I am directed to state that it is not case for exercise of powers u/s.119 of the Act by the Board and therefore, request for granting further time, in case of the Petitioner, for effecting payment of third installment under iDS is hereby rejected." 10. Mr. Hardik Vora, the learned counsel appearing for the writ applicant would submit that he does not intend to raise the issue with respect to extension of the time for the payment of the third/last installment, more particularly, in view of the order dated 28th December, 2018, referred to above. Mr. Vora submits that he would like to confine his case only to the extent of adjusting the amount already deposited by the writ applicant for the relevant assessment year. In the aforesaid context, Mr. Vora seeks to rely upon the following judgments; "(i) Sangeeta Agarwal vs. Principal Commissioner of Income Tax-I, (2018) 409 ITR 254 (MP); This decision of the Madhya Pradesh High Court was challenged by the Revenue before the Supreme Court. The Revenue lost before the Supreme Court. The order of the Supreme Court is reported in 2019 103 Taxmann.com 4....
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....of Chapter V of the Wealth-tax Act, 1957 (27 of 1957) relating to liability in respect of assessment in special cases shall, so far as may be, apply in relation to proceedings under this Scheme as they apply in relation to proceedings under the Scheme not to apply to certain persons." 16. According to Mr. Bhatt, Clause 191 of the Scheme makes it abundantly clear that any amount of tax paid under clause 184 or penalty under clause 185 in pursuance of a declaration made under the clause 183 is not refundable. Mr. Bhatt would submit that the sub-clause (3) of clause 187 provides for a deeming fiction. If the declarant fails to pay the tax in respect of the declaration made under clause 183 on or before the dates specified under sub-section (1), the declaration filed by the declarant would be deemed never to have been made under the Scheme. Mr. Bhatt, thereafter, invited the attention of this Court to Article 265 of the Constitution. According to Mr. Bhatt, a Writ Court can order refund of tax or adjustment of the tax only if the same has been paid under mistake of law. He would submit that tax, if illegally levied, can also be ordered to be refunded. He would submit that the doctri....
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....nsel appearing for the writ applicant. In the said case, the writ applicant, being an assessee, applied under the Scheme of Income Declaration Scheme, 2016 as declared by the Government of India, which came into force from 1st June, 2016. The writ applicant disclosed an undisclosed income of a particular amount for the A.Y.2014-15. The case of the writ applicant was selected for scrutiny for the relevant assessment year, and notice under Section 143(2) of the Act was issued. His application, therefore, under the scheme came to be rejected. The writ applicant claimed that the first installment paid by him should be refunded. As the request was declined, the writ applicant approached the High Court of Madhya Pradesh. The Madhya Pradesh High Court allowed the writ application holding as under; "5. Learned counsel for the petitioner has submitted that he has paid the first installment amounting to Rs. 3,28,068 on 19-11-2016 and after coming to know about the aforesaid, he prayed for refund of the amount. 6. As per Clause No. 191 of the Finance Act, 2016, any amount paid under Scheme is not refundable and, therefore, he prayed for adjustment of the aforesaid amount. ....
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.... filing of declaration. It was held by the Apex Court that any amount paid after 90 days cannot be accepted under the scheme, hence, the balance amount will have to be refunded back to the assessee. 10. Learned counsel for the respondent opposed the prayer and submitted that the Scheme of 2016 is very clear and there is no provision to adjust the amount and, therefore, no such direction can be issued and prays for dismissal to the writ petition. 11. Para 14 of the decision of the Hon'ble Supreme Court in the case of Hemalatha Gargya (supra) is relevant which reads as under:-- "14. As a consequence, in our view, the appeals preferred by the assessees must be and are hereby dismissed whereas the appeals preferred by the Revenue Authorities must be and are hereby allowed. However, having held that the assessees are not entitled to the benefit of the Scheme since the payments made by them were not in terms of the Scheme, we direct the Revenue Authorities to refund or adjust the amounts already deposited by the assessees in purported compliance with the provisions of the Scheme to the concerned assessees in accordance with law. All the appeals are accordin....
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....cheme in the form of Clause 191. We find it difficult to accept the view of the Madhya Pradesh High Court. It is true that the decision of the Madhya Pradesh High Court has not been interfered with by the Supreme Court, but at the same time, we should not ignore the fact that the Supreme Court declined to dismiss the SLP summarily. The judgment of the Andhra Pradesh High Court in the case of Parchala Seethramaiah (supra) also, in our opinion, is of no avail to the writ applicant. It was a case under the Voluntary Disclosure of Income Scheme, 1997. The Andhra Pradesh High Court, while allowing the writ petition and directing the respondents to refund the tax paid under the declaration, held as under; "6. Thus, from a reading of the aforesaid provisions and the scope and ambit of the Scheme as contemplated, it is quite apparent that if one has to avail the benefit under the Scheme, he has to mandatorily comply with the requirements. It contemplates the payment of tax along with the declaration itself, but at the same time, making a provision for payment of tax at a later stage not beyond three months from the date of filing the declaration with interest. Further, sub-section....
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.... 8. I submit that it is pertinent to make reference to the relevant extracts of the Budget speech of the Hon'ble Finance Minister in 2016 while introducing the IDS scheme is reproduced below; "159. We are moving towards a lower tax regime with non-litigious approach. Thus, while compliant taxpayers can expect a supportive interface with the department, tax evasion will be countered strongly. Capability of the tax department to detect tax evasion has improved because of enhance. access to information and availability of technology driven analytical tools to process such information. ] want to give an opportunity to the earlier non-compliant to move to the category of compliant. 160. I propose a limited period Compliance Window for domestic taxpayers to declare undisclosed income or income represented in the form of any asset and clear up their past tax transgressions by paying tax at 30%, and surcharge at 7.5% and penalty at 7.5%, which is a total of 45% of the undisclosed income. There will be no scrutiny or enquiry regarding income declared in these declarations under the Income Tax Act or the Wealth Tax Act and the declarants will have immunity from prose....
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....y delay in discharging the liability towards tax, penalty and surcharge. There is no provision for interest under IDS, as the declarants under the IDS were expected to adhere to the prescribed time limits. Any relaxation to the declarants who defaulted in timely payment of any of the installment as per the prescribed schedule without imposing any condition upon those defaulters, would in factt be discriminatory against those declarants who managed to adhere to the prescribed time schedule. It is not within the ambit of CBDT to impose additional conditions of payment of interest for late payment as there is no such provision under the IDS. Therefore, it is reiterated that the Respondent-CBDT was right in rejecting delay condonation application. Moreover, as mentioned in earlier paras, IDS contains provisions for taxation of income so declared under IDS as per the provisions of Income-tax Act if the declaration becomes void. 10. I submit that the Petitioner has prayed in the alternative that the taxes, surcharge and penalty paid under the first and second installment of IDS be refunded to the Petitioner. I humbly submit that such prayer may not be entertained in view of subs....