TaxTMI 
TaxTMI 
2026 (1) TMI 80
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....us or any other appropriate Writ, Order or direction, directing the Respondents, its servants, subordinates, agents and successors in office: i. to forthwith issue Form 4 in respect of the Form 1 filed by the Petitioner on 26.09.2016; ii. to give consequential effect to the issuance of Form 4, by ignoring the revised return filed on 31.03.2018 and to consider the original return of income filed on 01.11.2017; iii. to give consequential effect to the issuance of Form 4, by setting aside the assessment order, computation sheet and notice of demand all dated 11.12.2019 for AY 2017-18;" 3. The essential facts, as pleaded in the Petition, are as follows: a) The Petitioner is an individual engaged in the business of a restaurant and bar. On 26th September 2016, the Petitioner availed the benefit of the Income Declaration Scheme, 2016, by filing a declaration in Form-1, disclosing undisclosed income of Rs. 3,51,10,300/-. The total liability under the Scheme, comprising tax, surcharge, and penalty, was computed at Rs. 1,57,99,635/-. b) The payment under the Scheme was to be made in three instalments. The first instalment was to be paid on or ....
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.... income offered in the revised return was accepted, however, in the computation of the income sheet, the system did not allow credit of tax paid under the scheme, and as a result, a demand of Rs. 1,26,35,707/- was raised in the notice of demand dated 11th December 2019. i) Subsequently, the Finance (No. 2) Act, 2019, introduced a proviso to Section 187(1) of the Finance Act, 2016, empowering the Central Government to provide a further opportunity to the declarants under the Scheme who had defaulted on their payments. Pursuant to this, Notification No. 103/2019 dated 13th December 2019 was issued, allowing such declarants to pay the balance amount with interest by 31st January 2020. j) Accordingly, Respondent No. 1 issued a letter dated 29th December 2019, informing the Petitioner of this opportunity. Seizing this second chance, the Petitioner decided to pay the balance amount due under the Scheme. While calculating the balance of the third instalment, the Petitioner considered Rs. 45,00,000/- already paid as Self-Assessment Tax as part of the payment towards the Scheme's liability. Accordingly, the Petitioner paid the remaining amount of Rs. 34,00,000/- along ....
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....al assessed income of the Petitioner in terms of Section 188 of the Finance Act, 2016. Further, the credit of taxes paid under the scheme and the credit of self-assessment tax should be ignored while computing tax liability for A.Y. 2017-18, and the income should be recomputed, and so also the tax liability and the tax demand. In this regard, he relied upon the clarification issued by CBDT in Circular No. 25/2016 dated 30th June 2016. c) Alternatively, he submitted that, if for any reason the declaration under the Scheme is not accepted and Form-4 is not issued, then all payments made by the Petitioner, including the two initial instalments and the final payment made in January 2020, must be credited against the tax demand raised in the assessment for A.Y. 2017-18. The Government cannot retain taxes paid under the Scheme while simultaneously raising a demand for the same income under the IT Act. d) In support of the aforesaid submissions, the learned Counsel for the Petitioner placed reliance on the following decisions: i) [2022] 443 ITR 148 (Bom) Kamla Chandrasingh Kabali vs. Principal Commissioner of Income Tax; ii) [2017] 393 ITR 599 (Del) Kum....
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....ment, through the Finance (No. 2) Act, 2019, and the subsequent notification, provided a second opportunity to declarants, the intent was clearly to allow them to regularise their declarations and come clean. This was a beneficial provision aimed at resolving disputes and collecting revenue. The objective was not to penalise declarants with double taxation arising from procedural complexities. 9. The argument of the Revenue that there is no specific provision for such an adjustment is hyper-technical and ignores the substance of the transaction. The Petitioner paid Rs. 45,00,000/- towards the tax liability on the undisclosed income. When the Scheme was revived for the Petitioner, the liability for the same undisclosed income was restored under the Scheme. This is more so when Respondent No. 1 himself issued a letter to the Petitioner to avail of the second opportunity under the Scheme. It would therefore be unjust to require the Petitioner to pay this amount again under the Scheme while the Revenue retains the same amount paid earlier for the very same income. Such an approach would be contrary to the principles of equity and fairness, and would violate Article 265 of the Consti....