2022 (2) TMI 941

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....by the revenue filed under Section 260A of the Income Tax Act, 1961, (the Act for brevity) is directed against the order dated 15th January, 2020 passed by the Income Tax Appellate Tribunal "B" Bench, Kolkata (Tribunal) in ITA No. 707/Kol/2019 for the assessment year 2014-2015. 5. The revenue has raised the following substantial questions of law for consideration : i) Whether the Ld. ITAT has committed substantial error in law in holding that once the income offered and IDS (Income Declaration Scheme), 2016 is accepted by the Department an order under Section 143(3) of the Act cannot be revised as the items of addition in question directed by the Learned Principal Commissioner of Income Tax was part of IDS, 2016 application and not part of the order passed under Section 143(3) of the Act? ii) Whether the Learned Tribunal has committed substantial error in law in holding that the order under Section 263 of the Act was without jurisdiction as such as the items of addition directed by the Learned Principal Commissioner of Income Tax was part of IDS, 2016 and not part of order under Section 143(3) of the Act? iii) Whether the Learned Tribunal is perverse i....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... a declaration under sub Section (1) of Section 180. Section 183(1) states that subject to the provisions of the scheme any person may make, on or after the date of commencement of the scheme (IDS), 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 first day of April 2017. The circumstances enumerated in clauses (a), (b), (c) to Section 183(1) enumerates the types of assessees who would be entitled to file such declaration. Section 184 deals with charge of tax and surcharge. Sub Section (1) of Section 184 commences with a non-obstante clause stating that notwithstanding anything contained in the Income Tax Act or in any Finance Act, the undisclosed income declared under Section 180 within the time specified therein shall be chargeable to tax @30% of such undisclosed income. Section 185 deals with penalty. Section 186 speaks about the manner of declaration and sub Section (2) of Section 186 enumerates as to who has to sign the declaration. Section 187 deals with time for payment of tax. Section 188 d....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....irect Taxes (CBDT) had framed the Income Declaration Scheme Rules 2016. In terms of Rule 4(1) a declaration of income or income in the form of investment in any asset under Section 183 shall be in Form 1. Form 2 is the acknowledgement of declaration under Section 183 of the Finance Act 2016 in respect of IDS. The said Form while acknowledging the receipt of the declaration determines the amount payable with regard to the declaration made by the assessee under the scheme. The assessee is required to pay an amount of not less than 25% of the amount quantified on or before 30.11.2016; an amount not less than 50% on or before 31.03.2017 and the whole of the sum payable reduced by the amount paid earlier on or before 30.09.2017. The assessee is required to give an intimation of payment made under Section 187(1) in respect of IDS in Form 3. After the proof of payment is intimated in Form 3, the certificate of declaration under Section 183 of the Finance Act, 2016 is issued in Form 4. In the said Form it is stated that it is an acknowledgement that a declaration under Section 183 of the Finance Act, 2016 has been accepted. 12. It would be relevant to note that in Form 2, which is the a....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....been included in the total income and the total amount should have been Rs. 75,24,379/- and not Rs. 74,24,379/- as declared by the assessee under the IDS. Further, the PCIT opined that the assessee would have paid commission to the entry operators and brokers etc. at 5% for making accommodation entries. The assessee in her submission dated 15th January, 2019 had denied having paid any commission. Nevertheless, the PCIT taking note of certain material which was culled out from the Investigation wing of the Department during the course of search and seizure proceedings against certain stock brokers there appears to have been statements recorded that they have been paid commission. The statements relied on were not furnished to the assessee, nor there is any finding that the assessee paid commission to any stock broker. Thus, the Assessing Officer was directed that the purchase price of Rs. 1 Lac is to be added back though PCIT accepted the fact that the sum of Rs. 74,24,380/- has been offered by way of declaration under the IDS and accepted and apart from that a sum of Rs. 3,76,219/- has to be added back under Section 69(c) of the Act. With these findings the Assessing Officer was di....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ent and directing a fresh assessment. Thus, the power under Section 263 could be invoked to examine the records of any proceedings under the Income tax Act and if the authority finds that the order is erroneous in so far as it is prejudicial to the interest of revenue, he may revise such order after opportunity to the assessee. In the case at hand, the tax paid by the assessee is under the IDS which is a scheme framed under the provisions of the Finance Act, 2016. That apart, in the declaration filed by the assessee in terms of Section 183 of the Act, in Form 1 the assessee has mentioned about the undisclosed income and also the undisclosed income which is eligible under the scheme (IDS). This declaration was considered by the appropriate authority, who incidentally is the PCIT and having been satisfied that the assessee is eligible to the benefit of IDS, the acknowledgement of declaration was given in Form 2 mentioning the undisclosed income as declared by the assessee in Form 1 and the undisclosed income eligible for the Scheme. The acknowledgement issued in Form 2 is issued after consideration of relevant material and the determination is made by the PCIT on the amount payable b....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....r dated 29th January, 2019 under Section 263 of the Act has accepted the fact that the amount of Rs. 75,24,380/- has been entered in the books of accounts. Nevertheless, the assessee while availing the declaration had mentioned the amount as Rs. 74,24,379/-. Therefore, the authority while examining the declaration filed by the assessee under the IDS could have very well noted this aspect of the matter. However, such course was not adopted, the declaration was processed and a certificate of declaration was issued on 13th October, 2017 accepting the declaration filed by the assessee. Therefore, the power under Section 263 could not have been invoked. That apart, the PCIT was of the view that the assessee would have paid commission to the stock brokers for making those accommodation entries in spite of the assessee's specific stand in her letter dated 15th January, 2019 that no commission had been paid. Therefore, this presumption is not based on any evidence directly linking the assessee, rather the PCIT himself would accept that he has come to such conclusion based upon certain statements which were recorded from certain other stock brokers during the search and survey operations co....