In a recent ruling, a Division Bench of Bombay High Court directed the Income Tax Authorities to issue a fresh Form-3 subsequent refund of the amount paid under the Income Declaration Scheme (IDS) and the balance amount, if any.
The bench of Justice Kamala Khata and Justice Dhiraj Singh Thakur observed that the amount deposited by the petitioner under the IDS could not have been forfeited and have neither been refunded nor adjusted.
The petitioner, Sunil Wamanrao Sakore with a view to seek benefit under the IDS filed up Form-1, dated 30th for the relevant year and disclosed an undisclosed income of Rs.15,50,000.
Chapter IX of the 2016 Finance Act created the Income Declaration Scheme (IDS), allowing people the chance to come forward and declare any concealed earnings they may have and pay the appropriate tax, surcharge, and penalty on that income. Along with other benefits, the Scheme offered this type of declarant immunity from prosecution.
The revenue thereafter issued a Form-2 acknowledgment requesting payment of Rs. 6,97,500 from the petitioner. The petitioner did, however, submit Rs. 3,48,752 through two challans but was unable to deposit the remaining money due to a claimed personal issue.
An order of assessment came to be passed, whereby the total income of the petitioner was assessed at Rs.38,22,910. Penalty proceedings against the petitioner also resulted in levying a penalty of Rs.6,97,500 upon the petitioner.
However, Form No.3 was issued by the designated authority under the Direct Tax Vivad se Vishwas Act, 2020 which required the petitioner to pay a sum of Rs.6,97,500 on or before 31st March 2021 and if the said amount was not paid by that date, an amount of Rs.7,67,250 after 31st March 2021.
The petitioner had objected to the issuance of Form-3 as it did not take into consideration an amount Rs.5,07,480 which was paid by virtue of various challans, details whereof weare provided in the petition.
Further, the specified authority and a revised Form-3 issued on 21st september 2023, asked the petitioner to deposit an amount of Rs.1,90,000/- before 30th September 2021 and Rs.2,59,750/- after 30th September 2021.
The bench noted that the petitioner had acknowledged not paying the full amount due in accordance with the updated Form-3, dated September 27, 2021. However, the petitioner’s entire argument is that if the revised Form-3 under the Direct Tax Vivad se Vishwas Act’s Scheme were to be adjusted against the amount of Rs. 3,48,752 that was deposited and was lying with the respondents under the IDS, the petitioner’s claim under the said Scheme could not be denied.
It was also added that this is a simple case where the money which was lying in the corpus of the revenue had simply to be adjusted by way of a mathematical exercise and benefit accorded to the petitioner under the Direct Tax Vivad se Vishwas Act.
The Bombay High Court opined that it would be strictly in accordance with the purpose, intent and the spirit of the Direct Tax Vivad se Vishwas Act aimed at eliminating and resolving the disputes between the assessee and revenue.
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