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Facts
The assessee had declared undisclosed income under the Income Declaration Scheme (IDS), 2016, but failed to pay the required taxes within the specified time, rendering the declaration invalid. The Assessing Officer reopened the assessment and made an addition of Rs. 95,19,377/- based on this invalid declaration. The CIT(A) upheld the addition.
Held
The Tribunal noted that an identical issue in the assessee's own case for AY 2017-18 was restored to the CIT(A) for fresh adjudication. Following this precedent, the Tribunal restored the current appeals to the CIT(A) for fresh adjudication with similar directions.
Key Issues
Whether the addition made by the Assessing Officer based on an invalid IDS declaration is sustainable, and if the matter should be restored to the CIT(A) for fresh adjudication based on precedent.
Sections Cited
148, 142(1), 143(3), 147, 197(b)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI R. K. PANDA & Ms. ASTHA CHANDRA
O R D E R PER ASTHA CHANDRA, JM:
The above 2 appeals filed by the assessee are directed against the separate orders dated 15.10.2025 of the Ld. CIT(A) / NFAC, Delhi relating to assessment years 2011-12 and 2012-13 respectively. Since identical grounds have been raised in both the appeals, therefore, for the sake of convenience, these were heard together and are being disposed of by this common order.
2011-12 as the lead case. Facts of the case, in brief, are that the assessee is an individual and engaged in the business of construction and cement trading. He filed his return of income for the impugned assessment year on 03.12.2012 declaring total income of Rs.38,37,950/-. The Assessing Officer observed that the assessee has filed declaration under Income Declaration Scheme (IDS), 2016 before the Pr.CIT-3, Pune on 27.09.2016 declaring total undisclosed income of Rs.72,16,49,949/- for various assessment years including the assessment year 2011-12. However, due to non-payment of taxes within the specified time, the declaration made has become invalid as per the provisions of the IDS, 2016. The Assessing Officer, therefore, after recording reasons, reopened the assessment and issued notice u/s 148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) on 31.03.2018. The assessee in response to the same submitted that the return already filed on 03.12.2012 may be treated as return of income filed in response to the notice issued u/s 148 of the Act. Thereafter, the Assessing Officer issued notice u/s 142(1) of the Act along with a questionnaire. The assessee in response to the same filed certain details. However, rejecting the various explanations given by the assessee, the Assessing Officer made addition of Rs.95,19,377/- to the total income which was declared by the assessee under the IDS, 2016 for the impugned assessment year as undisclosed income of the assessee.
In appeal, the Ld. CIT(A) / NFAC dismissed the appeal.
Aggrieved with such order of the Ld. CIT(A) / NFAC the assessee is in appeal before the Tribunal by raising the following grounds:
On the facts and in the circumstances of the case and in taw a learned Assessing Officer erred making addition of Rs.95,10,377/- on account of declaration made under IDS 2016, without appreciating the fact that, it is not in conformity with IDS 2016 scheme, and without appreciating the fact that, same addition has also been made in the year of declaration, resulting into double addition of the same amount, your appellant prays for appropriate relief as per the provisions of law. Your appellant prays for deletion of entire addition. Your appellant craves for to add, alter amend modify, delete any or all grounds of appeal before or during the course of hearing in the interest of natural justice.
The Ld. Counsel for the assessee at the outset submitted that an identical issue had come up before the Tribunal in assessee’s own case for assessment year 2017-18 and the Tribunal vide order dated 23.06.2025 has restored the issue to the file of the Ld. CIT(A) / NFAC for fresh adjudication. He submitted that since the facts of the instant case are identical to the facts of the case already decided by the Tribunal in assessment year 2017-18, therefore, he has no objection if the matter is restored to the file of the Ld. CIT(A) / NFAC with similar directions.
The Ld. DR on the other hand while supporting the order of the Ld. CIT(A) / NFAC fairly conceded that the Tribunal in assessee’s own case for assessment year 2017-18 has restored the issue to the file of the Ld. CIT(A) / NFAC for fresh adjudication of the issue afresh with certain directions.
We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. It is an admitted fact that the assessee in the instant case had filed a declaration under the IDS, 2016 on 27.09.2016 before the Pr. CIT-3, Pune wherein he disclosed the total sum of Rs.72,16,49,949/- for various assessment years which includes an amount of Rs.95,19,377/- pertaining to the assessment year 2011-12. This amount was described as ‘advance (credit) appearing in the books not payable’ i.e. in the nature of cash credits that were ultimately not genuine. Since the assessee was required to discharge the liability towards tax, surcharge and penalty in three intalments with the final instalment payable on or before 30.09.2017 but failed to make the requisite payment within the prescribed timeline, therefore, the declaration made under the IDS, 2016 was rendered invalid. As per provisions of section 197(b) of the Finance Act, 2016 where the declarant fails to make the prescribed payment, the declaration stands void ab initio, and the disclosed income becomes chargeable to tax under the regular provisions of the Income Tax Act, 1961. Consequently, the declaration made by the assessee lost its legal sanctity and the amount of Rs.95,19,377/- for assessment year 2011-12 became liable to be assessed under the normal assessment machinery of the Act. The Assessing Officer, therefore, after recording reasons, reopened the assessment and issued notice u/s 148 of the Act. In the order passed u/s 143(3) r.w.s. 147 of the Act, the Assessing Officer made addition of Rs.95,19,377/- as income from undisclosed sources which has been upheld by the Ld. CIT(A) / NFAC.
We find an identical issue had come up before the Tribunal in assessee’s own case for assessment year 2017-18 and the Tribunal vide order dated 23.06.2025 has restored the issue to the file of the Ld. CIT(A) / NFAC for adjudication of the issue afresh with certain directions. The relevant observations of the Tribunal from para 5 onwards read as under: “5. We have heard the rival contentions and perused the record placed before us. We notice that assessee who is an individual did not file the return of income for A.Y. 2017-18 and the assessment u/s.144 of the Act was finalized on 29.12.2019 at a total income of Rs.1,01,58,000/-. As per the information, assessee declared income of Rs.72,16,49,949/- under IDS, 2016 but did not pay tax. Further during the course of investigation, it was found that assessee has deposited cash of Rs.1,01,48,000/- in the current account at Karad Urban Coop. Bank Ltd. For carrying out the re-assessment proceedings, valid notice u/s.148 of the Act have been issued and duly served upon the assessee and valid re- reassessment proceedings have been carried out by the AO. However, assessee failed to make any compliance to the various notices of hearing and ld. AO concluded the assessment assessing income at Rs.81,03,78,658/- in the following manner : Sl.No. Description Amount (in INR) 1. Income as per Return of Income filed Nil 2. Income as per assessment order passed 1,01,58,000 u/s 144 dated 29.12.2019 3. Variation in respect to (i) Disallowance of Interest payment 5,07,75,898/- (ii) Addition on account of declaration 72,16,49,949/- made under IDS, 2016 (iii) Addition on account of unexplained 2,77,94,811/- source for purchase of immovable property TOTAL ASSESSED INCOME Rs.81,03,78,658/- 6. Assessee challenged all the additions made by AO before CIT(A) but the assessee failed to appear before Ld.CIT(A). Assessee sought adjournment but did not file any details in support of its grounds of appeal. As a result, ld.CIT(A) had no option except to confirm the action of the AO. Further, in the addition made by ld. AO, major amount pertain to the additions on account of declaration made under IDS, 2016 but not offered to tax and therefore added in the hands of assessee. Before us, ld. Counsel for the assessee has furnished details of other assessment years where the appeals are pending before ld.CIT(A) and one of the common issue for all those years falling in the period A.Yrs. 2011-12 to 2020-21 are the additions made for income declared under IDS, 2016 but not offered to tax
and they are still pending for adjudication. Considering the fact that in the instant appeal also ld.CIT(A) has passed exparte order solely for the non-compliance on the part of assessee but then since other years having similar issue are pending for adjudication before the First Appellate Authority and it is also claimed that duplicate additions have been made for the very same amount in some years, we considering the prayer of the assessee and there being no objection raised by the ld. DR deem it appropriate to remit back all the issues raised in the instant appeal to the file of ld.CIT(A) for necessary adjudication along with other appeals pending before ld.CIT(A) as detailed above and carry out adjudication in accordance with law after providing reasonable opportunity of hearing to the assessee. Grounds of appeal raised by the assessee are allowed for statistical purposes.”
9. Respectfully following the decision of the Tribunal in assessee’s own case for assessment year 2017-18 and in absence of any contrary material brought to our notice by the Ld. DR, we restore the issue to the file of the Ld. CIT(A) / NFAC for adjudication of the issue afresh in the light of the direction of the Tribunal cited (supra). The grounds raised by the assessee are accordingly allowed for statistical purposes.
ITA No.2749/PUN/2025 (A.Y. 2012-13)
After hearing both the sides, we find the grounds raised by the assessee in the instant appeal are identical to the grounds raised in . We have already decided the issue and restored the same to the file of the Ld. CIT(A) / NFAC for fresh adjudication. Following similar reasonings, we restore the issue to the file of the Ld. CIT(A) / NFAC for fresh adjudication with similar directions. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, both the appeals filed by the assessee are allowed for statistical purposes.
Order pronounced in the open Court on 30th March, 2026.