TaxTMI 
TaxTMI 
2026 (1) TMI 42
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..... 2009-10 2,17,00,000 3. 2010-11 36,00,000 4. 2011-12 45,00,000 5. 2012-13 60,00,000 6. 2013-14 8,43,46,400 7 2014-15 68,69,000 8. 2015-16 70,00,000 9. 2016-17 75,00,000 Total 14,55,65,400 3. The assessee for all the years in aggregate made a declaration for a total undisclosed income of Rs. 14,55,65,400/-. The said declaration in Form 1 came to be filed on 30.09.2016. The said declaration also showed that the tax payable, the surcharge payable and the penalty payable as a result of the declaration to be as follows: Total amount of declaration of undisclosed income Rs.14,55,65,400 Tax payable thereon (30% of Rs. 14,55,65,400) Rs.4,36,69,620 Surcharge payable thereon (25% of Rs. 4,36,69,620) Rs.1,09,17,405 Penalty payable thereon (25% of Rs. 4,36,69,620) Rs.1,09,17,405 4. The assessee however had not paid the tax, surcharge and penalty reflected as payable in Form 1 within the time allowed under the Finance Act, 2016. Since the tax, surcharge and penalty payable in terms of the provisions of Finance Act, 2016 pursuant to the declaration in Form 1 filed u/s. 183 of the F....
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....late authorities and asked me to pay the demand. 6. As the assets of the appellant were already attached for the tax dues by the income tax department on 26.06.2018 and the appellant was not having enough source to discharge his huge tax liability, I was forced to look out for alternatives 7. Accordingly, I discussed the assessment order with some other tax consultants having expertise in the field and they informed me that there were bright chances of getting relief from the appellate authorities. Accordingly, I have decided to file the appeal belatedly with the petition for condonation of delay 8. In view of the above, the delay in filing this appeal is on account of wrong advice given by the Chartered Accountant, who was representing my case earlier." 9. The ld.CIT(A), disposed of the appeal vide order dated 17.04.2025 refusing to condone the delay in filing the appeal on the basis that no sufficient cause had been provided by the assessee for the delay and in the absence of sufficient cause, the delay could not be condoned. 10. Aggrieved by the order of the ld.CIT(A), the assessee preferred this appeal before us. 11. Before proceeding to adju....
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....d not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so. 13. The assessee also relied on the decision of the Hon'ble Jurisdictional High Court in Areva T and D India Ltd v JCIT [2006] 287 ITR 555 (Mad) where the Hon'ble Madras HC held that where the delay was on account of advice alleged to be given by his counsel even where the assessee could not get an affidavit from his counsel, the delay was to be condoned. 14. The Hon'ble HC in this case also held as follows: It is a well-settled law that in exercising discretion under section 5 of the Limitation Act the courts should adopt a pragmatic approach. A distinction must be made between a case where the delay is inordinate and a case where the delay is of a few days. Whereas in the former case the consideration of prejudice to the other side will be a relevant factor so the case calls for a more cautious approach in the latter case no such consideration may arise and such a case deserves a liberal approach. No hard and fast rule can be laid down in this regard. The court has to exercise the discretion on the facts of each case kee....
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....ndone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is con-doned the highest that can happen is that a cause would be decided on merits after hearing the parties. 14.6 The Hon'ble SC has also observed that a litigant does not ordinarily benefit by lodging an appeal late. 15. The Ld. DR on the other hand, on the issue of condonation of delay has urged before us, that the delay in filing the appeal before the Ld.CIT(A) does not deserve to be condoned and relied on the decision of the Hon'ble Madras High Court in Royal Stitches (P) Ltd v DCIT 2023 156 taxmann.com 361 (Mad). 16. In this case the Hon'ble Madras High Court has refused to condone the delay of 1072 days in filing the appeal, referring to the decision of the Hon'ble Supreme Court in Pundik Jalam Patil v Executive Engineer, Jalgaon Medium Projec [(2008) 17 SCC 448] where the Hon'ble Supreme Court has observed that the Court would help only those who are vigilant and not those who slumber over their rights. 17. It can be noted that this decision of the Hon'ble Madras High Court was rendered in the case where the asses....
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....heme, 2016 [IDS] and the non payment of tax / surcharge / penalty thereafter would constitute fresh tangible material since the Form 1 under the IDS 2016, clearly stated that the assessee had income which had not been disclosed. 24. The Ld.DR also stated that in the event of non payment of taxes under the IDS 2016, section 197(b) of the Finance Act 2016 would deem the amount of incomes stated in the Form 1 as income assessable in A.Y.2017-18 as per section 197(b) of the Finance Act 2016. 25. The Ld.DR therefore, contended that it was a clear case where the Form 1 itself constituted fresh tangible material which lead to the reopening of assessment. 26. We have perused the records and considered the arguments of both sides. It can be seen from the records that the assessee, in fact, has filed Form 1 under the IDS 2016 on 30.09.2016. The said Form 1 contains the income that the assessee wished to declare under the IDS 2016. 27. We also notice that section 197(b) of the Finance Act 2016 treats income which has been disclosed under IDS and on which tax / surcharge / penalty has not been paid within the time stipulated u/s. 187 of the Finance Act 2016 to be assessed as income....
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.... one of us (Chief Justice) that it is mandatory for the FAO to issue the concerned notices and issuance thereof by the JAO would make the notice invalid. 5. Counsels for assessee's are ad idem that the law as laid down in Hexaware Technologies Ltd (supra) will apply. Learned Additional Solicitor-General, however, submits that the Revenue does not accept the law as laid down in Hexaware Technologies Ltd (supra); and that there is a special leave petition filed against the order and judgment in Hexaware Technologies Ltd (supra) and the same is expected to be taken up after the Supreme Court reopens. 6. Admittedly, learned Additional Solicitor-General, in fairness, states that there is no stay. Therefore, the law as laid down by Hexaware Technologies Ltd (supra) applies. 7. It is clarified that if the Apex Court reverses the judgment of Hexaware Technologies Ltd (supra), parties will be governed by the decision of the Apex Court. 8. Keeping open all rights and contentions of parties, including liberty to apply to this Court, in case the Revenue succeeds before the Apex Court, for revival of these petitions, the notices issued in these petitions are ....
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....come Tax vide Ref No.: C No.882 / PCIT - 8 / 2002-23 dated 22.07.2022. 36. After a careful reading of the decision of the Hon'ble Supreme Court in Ashish Agarwal (supra) and in UOI v Rajeev Bansal [2024] 469 ITR 46 (SC) we note that in the present case the 3 year time limit for A.Y.2017-18 ended on 31.03.2021 which falls during the time between 20.03.2020 and 31.03.2021 as contemplated by section 3(1) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA). Since the 3 year period lapsed only on 31.03.2021 for the A.Y. 2017-18 and since it fell during the TOLA period, the authorities empowered u/s. 151(1) of the old regime i.e. the PCIT could have granted sanction to reopen the assessment till the extended period upto 30.06.2021. However in case where the sanction has to be given after 30.06.2021, then the provisions of section 151 of the new regime would apply and that the sanction ought to have been obtained from the authorities empowered u/s. 151(ii) of the Act of the new regime i.e. Principal Chief Commissioner or Principal Director General or Chief Commissioner of Director General of Income Tax. 37. In the instant case, admittedly....
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.... made u/s. 183 and tax / surcharge / penalty referred to in sections 184 and 185 of the Finance Act 2016 are not paid within the time specified in section 187, the undisclosed income shall be chargeable to tax under the Income Tax Act in the previous year in which the declaration is made. The declaration in the instant case has been filed on 30.09.2016 i.e. in the previous year relevant to A.Y.2017-18. 44. In the light of these facts, the Ld.AR submitted that while the taxes have not been paid within the dates specified u/s. 187(1), the provisions of section 192 of the Finance Act 2016 specifically provides that the declaration is not admissible in evidence against the declarant and that therefore the declaration cannot be used to reopen the assessment or to make any addition on the basis of such declaration. 45. The Ld.AR further contended that the Form 2 as contemplated by Rule 4(3) of the Income Declaration Scheme Rules, 2016 [IDS Rules], has not been served on the assessee and that therefore the question of payment of tax / surcharge / penalty does not arise. This being so, there was no scope for invocation of section 197(b) of the Finance Act 2016, the Ld.AR submitted. ....
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....re the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, we do not see any reason why the assessee should be prevented from raising that question before the Tribunal for the first time, so long as the relevant facts are on record in respect of that item. We do not see any reason to restrict the power of the Tribunal under section 254 only to decide the grounds which arise from the order of the Commissioner (Appeals). Both the assessee as well as the Department have a right to file an appeal/cross-objections before the Tribunal. We fail to see why the Tribunal should be prevented from considering questions of law arising in assessment proceedings although not raised earlier. 51. Further the Hon'ble Madras HC in CIT v Indian Bank 2015 55 taxmann.com 372 (Madras) has held that the assessee has the right to raise additional grounds and if the same is beneficial to the assessee, the same should be considered by the Tribunal 52. We find that the g....
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.... form of investment in any asset under section 183shall be made in Form-1. (2) The declaration shall be furnished:-(a) electronically under digital signature; or(b) through transmission of data in the form electronically under electronic verification code; or(c) in print form, to the concerned Principal Commissioner or the Commissioner who has the jurisdiction over the declarant. (3) The Principal Commissioner or the Commissioner shall issue an acknowledgement in Form-2to the declarant within fifteen days from the end of the month in which the declaration under section 183 has been furnished. (4) The proof of payment of tax, surcharge and penalty made pursuant to the acknowledgement issued by the Principal Commissioner or the Commissioner shall be furnished by the declarant to the such Principal Commissioner or Commissioner in Form 3. (5) The Principal Commissioner or the Commissioner shall grant a certificate in Form-4 to the declarant within fifteen days of the submission of proof of full and final payment of tax, surcharge along with penalty by the declarant under section 187 of the Act in respect of the income so declared. (6) The Pr....
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..../ surcharge / penalty are made pursuant to an acknowledgement received by a declarant in Form 2 from the ld.PCIT / CIT. Therefore, it is clear that if an acknowledgement in Form 2 is not received by a declarant the question of filing Form 3 and the payment of tax / surcharge / penalty pursuant to the declaration in Form 1 u/s. 183 of the FA 2016 does not and cannot arise. This being so, one will have to conclude that where the Form 2 is not served on the declarant the question of payment of tax / surcharge / penalty as contemplated by Sections 184 & 185 of IDS 2016 does not arise. 60. In the instant case there is no doubt that the Form 2 has been issued. Can in the circumstance there be a presumption that the Form 2 has been served on the assessee. In this connection one may notice the provisions of section 292BB of the Income Tax Act. Section 292BB of the Act specifically provides that where an assessee has appeared in any proceeding or co-operated in any enquiry under the Income Tax Act relating to an assessment or reassessment, such assessee shall be precluded from taking any objection in any proceedings or inquiry under the Income Tax Act that the notice was not served upon ....
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.... of tax imposed is increased from 30% to 60% and the same is applicable with effect from 01.04.2017 onwards as per the amendment. Therefore, the same is applicable to any transaction from 01.04.2017 onwards and nor prior to any transactions prior to 01.04.2017. Since in the present case all alleged transactions are for the period from 08.11.2016 to 30.12.2016, hence the erstwhile rate of tax 30% only is applicable. But the contention of the revenue is that the amendment was with effect from 01.04.2017 and hence the same is applicable for the financial year 2016-2017 and the assessment year 2017-2018. Further the amendment to section 115BBE is directly related to demonetization which would be evident from objects and reasons for such amendment. In order to consider the same, the objects and reasons of Taxation Laws (Second Amendment) Bill 2016 is extracted hereunder: ............ 17. In the aforesaid objects and reasons nowhere it is stated that due to "demonetization" the unaccounted money ought to be charged 60% rate of tax. It only states that step had been taken to curb black money by withdrawing Specified Bank Notes of denomination of Rs. 500 and Rs. 1000. And....