TaxTMI 
TaxTMI 
2025 (12) TMI 74
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2014-15 and 2015-16. Under this scheme, the Petitioner was permitted to pay its tax liability in certain installments. The total tax liability of the Petitioner under the IDS, 2016 was calculated at Rs. 1,87,55,741/- and which was to be paid by 31st January 2020. It is undisputed before us that the Petitioner paid the first installment [under the IDS, 2016] of Rs. 25 Lakhs on 30th December 2017 and the second installment of Rs. 25 Lakhs on 15th February 2018. Though the Petitioner could have made the entire payment latest by 31st January 2020, no further payment was made by the Petitioner. Hence, the Petitioner was not entitled to any benefit under the IDS, 2016. 3. For A.Y. 2017-18 (the Assessment Year under consideration) the Petitioner filed its Return of Income on 15th February 2018. For this Assessment Year, on 31st March 2021, a Notice under Section 148 of the Act came to be issued. The said Notice inter alia stated that the Assessing Officer had reason to believe that income chargeable to tax for A.Y. 2017-18 had escaped assessment within the meaning of Section 147 of the IT Act, 1961. He, therefore, proposed to re-assess the income for the said Assessment Year and calle....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntentions raised before him. The discussion by the 1st Respondent can be found from paragraph 5 onwards of the impugned order. As far as the characterization of the income is concerned, the 1st Respondent came to the conclusion that the provisions of Section 69A of the Act get attracted when an Assessee fails to offer a satisfactory explanation about the nature and source of acquisition of money, bullion, jewellery, etc. found to be in the Assessee's ownership and not recorded in its books of account, if maintained by him. The 1st Respondent, after analyzing the facts on record, came to the conclusion that no ITR was filed by the Petitioner for A.Y.2014-15 and 2015-16. Further, no explanation about the sources of the undeclared income for the said Assessment Years was given by the Petitioner. The 1st Respondent also noted that during the re-assessment proceedings minimal compliance to the Notices issued under Section 142(1) was made by the Assessee. It was only at the fag end of the proceedings that an ITR was filed on 8th March 2022. The 1st Respondent noted that in the said ITR filed, the total income of Rs. 4,16,85,136/- was declared by it, but no supporting evidence about the s....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... "8. In the following situations, a declaration shall be void and shall be deemed never to have been made : (a) If the declarant fails to pay the entire amount of tax, surcharge and penalty within the specified date, i. e., November 30, 2016; (b) Where the declaration has been made by misrepresentation or suppression of facts or information. Where the declaration is held to be void for any of the above reasons, it shall be deemed never to have been made and all the provisions of the Income-tax Act, including penalties and prosecutions, shall apply accordingly. Any tax, surcharge or penalty paid in pursuance of the declaration shall, however, not be refundable under any circumstances." This circular, in effect, only says what is there in the scheme. 11. In the year 1997, the Government of India had announced a Voluntary Disclosure of Income Scheme, 1997 (VDIS) in which section 67(2) and 70 read as under : "67. (1). .. (2) If the declarant fails to pay the tax in respect of the voluntarily disclosed income before the expiry of three months from the date of filing of the declaration, the declaration filed by him....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... tax in respect of the voluntarily disclosed income before the expiry of three months from the date of filing of the declaration, the declaration filed by him shall be deemed never to have been made under this scheme.' In the several appeals which have been filed before us, some of the appellants are the assessees. In each of their cases it is not in dispute that they had not paid the tax within the time prescribed either under section 66 or within the extended time under section 67(1). The period of default is varied and the explanations given in each of the assessees' cases are also different. All of them, however, have contended that the reason for non-payment was beyond their control. The assessees have relied upon those decisions referred to earlier which held that the period mentioned in section 67(1) was extendable. According to the assessees, the purpose of the scheme was to unearth black money which was in circulation. The time fixed under section 67(1) is not rigid according to the assessees, not only because there was express provision for making payment of interest in case of delayed payment but also because the Revenue would be benefited by disclosure of undis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ept the payment as having been made under the Scheme, and if not, refund the same to the assessees. In some of the appeals, the appellants are the Revenue authorities. They have contended that the scheme did not form part of the Income-tax Act, 1961, but formed a self-contained code in which there was no provision whatsoever for extension of time in the event the period under section 67(1) lapsed. According to learned counsel appearing on behalf of the Revenue, the provisions of the scheme make it clear that the scheme envisaged the payment to be made first whereafter the declaration was to be filed with proof of such payment. It is only with a view to dilute the rigidity of this requirement that section 67 allowed the assessee to make payment subsequent to the making of the declaration but subject to making payment of interest at the rate of two per cent. per month up to a period of three months and not further. Apart from the reasoning adopted by the various High Courts in the decisions in favour of the Revenue, it has been contended that the language used in section 67(2) makes it amply clear that the period specified was mandatory. Even if there were any doubt, accordi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....quences of non-compliance with the provisions of section 67(1) relating to the payment have been provided. It is well-settled that when consequences of the failure to comply with the prescribed requirement is provided by the statute itself, there can be no manner of doubt that such statutory requirement must be interpreted as mandatory (see Maqbul Ahmad v. Onkar Pratap Narain Singh, AIR 1935 PC 85, 88).. .. 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 accordingly disposed of without any order as to costs." (emphasis supplied). 13. This court in an unreported judgment dated June 13, 2005 [Sajan Enterprises Vs. CIT in Writ Petition No.4132....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Department is illegal and the petitioner is entitled to refund of the same (emphasis supplied). This court in Shankarlal v. ITO [1998] 230 ITR 536 (AP), while considering the scope and effect of the scheme, has, on a consideration of section 70 and the limitations on the tax refund contemplated thereunder, held that if this is understood as forfeiting the tax paid in cases where the declarations are ineligible under section 64(2), such a forfeiture would be confiscatory and unconstitutional, unless it is properly qualified. It was further held (page 555) : 'It appears to us that the intention of this section was only to state that there will be no cash refund of the tax paid in pursuance of the declaration made under subsection (1). It will not, however, stand in the way of adjustment of the amount if the declaration itself is not acceptable as not falling under section 64(1)'. (emphasis supplied). Therefore, in view of the above reasons, it cannot be said that the Revenue can retain the tax paid and the petitioner is not entitled for the refund." 15. The Karnataka High Court in Smt. Atamjit Singh v. CIT [2001] 247 ITR 356 (Karn); [1999....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oner is entitled to an adjustment by giving credit to the amount of Rs. 82,33,874 paid under Income Declaration Scheme. Respondent No. 3 is directed to rectify form 3 issued under the Direct Tax Vivad Se Vishwas Act read with Direct Tax Vivad se Vishwas Rules, to give credit to this amount of Rs. 82,33,874 and issue fresh form 3, within two weeks from the day, an authenticated copy of this order is served upon respondent No. 3 by the petitioner. The petitioner to make payment of disputed tax in accordance with revised/rectified form-3 within a period of two weeks from the issuance of revised form 3. (emphasis supplied) 9. In the light of the aforesaid decision in Pinnacle, we are of the view that the Petitioner would be entitled to credit of the tax paid by it under the IDS, 2016. As far as this aspect is concerned, we find that the order of the Commissioner is contrary to the law laid down by this Court and hence it is hereby set aside. As far as the issue of giving credit of advance tax, TDS, and self-assessment tax is concerned, the Assessing Officer has been directed to further verify and take into account the latest Judicial Precedents on this issue. In other words, what....