TaxTMI 
TaxTMI 
2023 (3) TMI 156
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....claration Scheme, 2016" against his tax liabilities under the Income Tax Act, 1961. (ii) For issuance of an appropriate writ/order/direction including Writ of Declaration, declaring that the action of the Respondent-authority in not permitting the Petitioner to adjust an amount of Rs.90.00 lacs deposited pursuant to the Income Declaration Scheme 2016 as wholly arbitrary and in violation of Article 265 of the Constitution of India. 3. The brief facts of the case, as per the pleading made in the writ petition, which are required to be enumerated, reads hereunder as:- The fact of the case is that the writ petitioner is regular assessee under the Income Tax Department having PAN No. AOJPS8551F. The Government of India has framed a regulation known as the Income Declaration Scheme, 2016, in exercise of power conferred under Section 199 of the Finance Act, 2016, which has been brought in force for declaration of undisclosed income on the basis of the mode and manner stipulated under Section 183 of the aforesaid Act. Another Section has been provided i.e., Section 187 which provides that the tax, surcharge and penalty payable under the Scheme in respect of undisclosed income was to....
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....hat such declaration made under Section 183 became non est in the eye of law and, therefore, he is entitled for the refund of the aforesaid amount having been deposited up to two instalments on or before 30th November, 2016 and on or before 31st March, 2017, the total comes to Rs.90 lacs. The writ petitioner has made such submission on the ground that once the declaration so furnished by the writ petitioner due to non-deposit of the amount in entirety as required under the Finance Act, 2016 will be said to be non est in the eye of law due to deeming provision as under Sub-Section 3 of Section 187 of the Finance Act, 2016 and hence the amount which has been retained by the respondent Income Tax Department is nothing but in violation of the provision of Article 265 of the Constitution of India. The writ petitioner has repeatedly represented for refund of the said amount or its adjustment by filing representations, one of the representation filed on 11th September, 2018 has been appended as Annexure-6 to the writ petition but the grievance has not been redressed, therefore, the instant writ petition has been filed. 4. Mr. Sumeet Gadodia, learned counsel assisted by Mrs. Shilpi Sa....
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....spectively were accepted and computation of tax was made on the basis of said further income disclosed by the petitioner in its revised return. The petitioner, in the aforesaid background, has submitted that once the liability which has been shown by the own declaration made by the petitioner about the undisclosed income for the assessment years 2015-16 to the tune of Rs.1.50 crores and Rs.2.50 crores for the assessment year 2016-17 since has been assessed and the returns have also been filed which have been accepted, therefore, there is no reason for the respondent Income Tax Department to keep the money with them. It has been submitted that the provision as contained under Sub-Section 3 of Section 187 however provides that in pursuance to the declaration if the amount in entirety, has not been paid, the same will be said to be not a declaration under the provision of Section 183 since the condition sine qua non for considering the declaration to be a declaration in the eye of law only when the amount in entirety will be paid within the schedule date. Here, since the third instalment has not been paid and, as such, the declaration said to have been made by the writ petitioner w....
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....not in terms of the Scheme. However, direction has been passed upon the Revenue authorities to refund or adjust the amount already deposited by the assessee in purported compliance of the provision of Scheme to the assessee concerned in accordance with law. Similar view has been taken by the Andhra Pradesh High Court in the judgment rendered in the case of Patchala Seethramaiah v. Commissioner of Income Tax, Vijayawada and Ors. (Supra) and the Madhya Pradesh High Court in the judgment rendered in the case of Smt. Sangeeta Agarwal v. Principal Commissioner of Income Tax (Supra). Mr. Gadodia has also referred a judgment passed by Gujarat High Court in the case of Yogesh Roshanlal Gupta v. Central Board of Direct Taxes (R/Special Civil Application No.2148 of 2019) wherein different view has been taken from the judgment passed by Hon'ble Apex Court in the case of Hemalatha Gargya v. Commissioner of Income Tax, A.P. and Another (Supra) and by the Andhra Pradesh High Court and Madhya Pradesh High Court in Patchala Seethramaiah v. Commissioner of Income Tax, Vijayawada and Ors. (Supra) and Smt. Sangeeta Agarwal v. Principal Commissioner of Income Tax (Supra) respectively on the ground t....
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....de under Section 183 of the Finance Act, 2016 is not to be refunded in view of the provision as contained under Section 191 of the Finance Act, 2016. He has further submitted that the judgments upon which reliance has been placed rendered by Hon'ble Apex Court in the case of Hemalatha Gargya v. Commissioner of Income Tax, A.P. and Another (Supra) and by the Andhra Pradesh High Court and Madhya Pradesh High Court in Patchala Seethramaiah v. Commissioner of Income Tax, Vijayawada and Ors. (Supra) and Smt. Sangeeta Agarwal v. Principal Commissioner of Income Tax (Supra), are not applicable in the facts of the given case herein since, the said judgments have been passed by the Hon'ble Apex Court and the concerned High Courts on the basis of the Scheme 1997 where there is no express provision of not to refund the amount so deposited by virtue of declaration but herein, there is express provision in this regard under Section 191. He, therefore, has submitted that in the facts of the give case, the judgment rendered by Gujarat High Court in the case of Yogesh Roshanlal Gupta v. Central Board of Direct Taxes (Supra) will be applicable. 6. We have heard learned counsel for the parties, p....
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....section 139, or in response to a notice under Sub-section (1) of Section 142, the Assessing Officer or the prescribed income-tax authority, if, considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, shall serve on the assessee a notice requiring him, on a date to be specified therein, either to attend the office of the Assessing Officer or to produce, or cause to be produced before the Assessing Officer any evidence on which the assessee may rely in support of the return. Thereafter, the provisions have been made for the consideration of the objection and taking final decision subject to appeal before the higher authorities. Section 147 provides provision pertaining to income escaping assessment. The aforesaid provision is to be made applicable if any income chargeable to tax, in the case of an assessee, has escaped assessment for any assessment years, the Assessing Officer may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance or any other allowance or deduction for such assessmen....
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....y the assessee who has failed to furnish a return under Section 139 of the Income Tax Act; if he has failed to disclose in a return of income furnished by him under the Income Tax Act before the date of commencement of the Scheme; if the assessee has escaped assessment by reason of the omission or failure on the part of such person to furnish a return under the Income Tax Act or to disclose fully and truly all material facts necessary for the assessment or otherwise, for ready reference, the provision of Section 183 is being referred hereunder as :- "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) for which he has failed to furnish a return under section 139 of the Income-tax Act; (b) which he has failed to disclose in a return of income furnished by him under the Income-tax Act before the date of comme....
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.... that where the amount of tax, surcharge and penalty, has not been paid within the due date notified under this sub-section, the Central Government may, by notification in the Official Gazette, specify the class of persons, who may, make the payment of such amount on or before such date as may be notified by the Central Government, along with the interest on such amount, at the rate of one per cent for every month or part of a month comprised in the period commencing on the date immediately following the due date and ending on the date of such payment.] (2) The declarant shall file the proof of payment of tax, surcharge and penalty on or before the date notified under sub-section (1), with the Principal Commissioner or the Commissioner, as the case may be, before whom the declaration under section 183 was made. (3) If the declarant fails to pay the tax, surcharge and penalty in respect of the declaration made under section 183 on or before the date specified under sub-section (1), the declaration filed by him shall be deemed never to have been made under this Scheme." 9. This Court, after going through the Income Declaration Scheme, 2016 and the Voluntary Disclosure of Incom....
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....onstitution of India and, therefore, the Gujarat High Court has come to the conclusion by negating the claim of the writ applicant for adjusting of the amount already deposited. The judgment passed by the Gujarat High Court has travelled to the Hon'ble Apex Court and the Hon'ble Apex Court in the peculiar facts of the case, has directed for refund of the amount so deposited. There is no dispute that the judgment passed by Hon'ble Apex Court is having binding effect in view of the provision of Article 141 of the Constitution of India. The aforesaid judgment has been followed by the Madhya Pradesh High Court directing for refund even if there is provision under Section 70 of the Scheme of 1997. However, the Gujarat High Court has differed with the view and has held the applicant not entitled for refund. The judgment passed by Madhya Pradesh High Court is based upon the judgment passed by Hon'ble Apex Court. 11. This Court is now proceeding to examine in the facts of the given case that the writ petitioner can be held entitled of refund or adjustment of the amount so deposited even if due to the effect of the provision of Section 191 of the Scheme, 2016 which is the thrust of the ....
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.... taken recourse of the provision of Section 153A then the return has been filed on the basis of assessment so made by the authority, therefore, it is not the case of the Revenue and it cannot be since the return on the basis of the steps taken in pursuance to the provision of section 153A of the Act, 1961 has already been accepted. Therefore, the question would be that once the return so filed by the writ petitioner although not at the time of filing return in view of the provision of Section 139 but subsequent thereto i.e., when the recourse has been taken by the Income Tax Department under the provision of Section 153A clearing its liability so far as assessment for the assessment year 2015-16 and 2016-17 is concerned. Thereafter, retaining the amount which has been deposited by the writ petitioner by way of self-declaration given in view of the provision of Section 183 of the Act, 2016, according to our considered view will be arbitrary exercise of the respondent authority. 13. The Hon'ble Apex Court while taking into consideration the provision of Section 67 read with Section 70 of the Scheme 1997, even in absence of the fact about furnishing the return, at the subsequent sta....
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....he writ petition to that effect. 19. We have considered the submission made on behalf of the parties on the issue. The ground has been taken that there is no specific prayer pertaining to the interest, as would be evident from the prayer made in the writ petition and it is the settled position of law that in the writ petition if there is no prayer, there cannot be any direction under Article 226 of the Constitution of India as has been held by Hon'ble Apex Court in the case of State of Madhya Pradesh and Another v. Kedia Great Galeon Limited and Another reported in (2017) 13 SCC 836, at paragraph 38 which is quoted and referred as under :- "38. ... ... ... We are, thus, of the considered opinion that the something which the writ petitioner never intended or prayed for cannot be looked into in this appeal." 20. However, this Court deems it fit and proper to decide this issue also since this has been raised on behalf of the parties and, therefore, proceeding to decide. 21. The provisions related to interest on the Income Tax refund is contained in Section 244A of the Act. The provisions of Section 244A of the Act have been introduced by the Direct Tax Laws Act, 1987 (as amended ....
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....ered from the facts available that the petitioner has not submitted the return as per his liability and, therefore, he has availed the opportunity to give disclosure under Section 183 of the Scheme, 2016. This conduct of the petitioner shows the intention that somehow the petitioner wanted to suppress his income by filing return. He, however, has deposited two instalments but third instalment was not deposited by him. This further shows the conduct of the petitioner that he has not stick to the statutory provision as contained under Section 139 of the Income Tax Act, 1961 specially the duty casted upon the assessee under the provision of Section 139 of the Income Tax Act, 1961. Although reliance has been placed upon the judgment rendered in the case of Union of India through Director of Income Tax v. Tata Chemicals Limited (Supra) but it is settled position of law that applicability of judgment is to be seen on the basis of the facts and circumstances of the given case as has been held by the Hon'ble Apex Court in the case of Dr. Subramanian Swamy vs. State of Tamil Nadu and Others, (2014) 5 SCC 75, paragraph 47 of which reads hereunder as: "47. It is a settled legal proposi....
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....n an appeal. The Hon'ble Apex Court by taking the fact involved therein has held that the deductor/assessee had paid taxes pursuant to a special order passed by the assessing officer/Income Tax Officer. In the appeal filed against the said order the assessee has succeeded and a direction is issued by the appellate authority to refund the tax paid. The amount paid by the resident/deductor was retained by the Government till a direction was issued by the appellate authority to refund the same. When the said amount is refunded it should carry interest in the matter of course. As held by Hon'ble Apex Court while awarding interest, it is a kind of compensation of use and retention of the money collected unauthorisedly by the Department. When the collection is illegal, there is corresponding obligation on the Revenue to refund such amount with interest inasmuch as they have retained and enjoyed the money deposited. Even the object behind insertion of Section 244-A, that an assessee is entitled to payment of interest for money remaining with the Government which would be refunded. There is no reason to restrict the same to an assessee only without extending the similar benefit to a resid....
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.... assessment year to the date of grant of refund. No interest is, however, payable if the excess payment is less than 10 per cent of tax determined under Section 143(1) or on regular assessment. No interest is payable for the period for which the proceedings resulting in the refund are delayed for the reasons attributable to the assessee (wholly or partly). The rate of interest and entitlement to interest on excess tax are determined by the statutory provisions of the Act. Interest payment is a statutory obligation and non-discretionary in nature to the assessee. In tune with the aforesaid general principle, Section 244-A is drafted and enacted. The language employed in Section 244-A of the Act is clear and plain. It grants substantive right of interest and is not procedural. The principles for grant of interest are the same as under the provisions of Section 244 applicable to assessments before 1-4-1989, albeit with clarity of application as contained in Section 244-A. 37. A "tax refund" is a refund of taxes when the tax liability is less than the tax paid. As per the old section an assessee was entitled for payment of interest on the amount of taxes refunded pursuant to an orde....