RAVI VIJAYVARGIYA @ RAVI SHASTRI vs. UNION OF INDIA

[2023:RJ-JP:30903-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No.9052/2019 Ravi Vijayvargiya @ Ravi Shastri, M/s MVJ Infraprojects, Iscon Road, Muhana Mandi Road, Mansarover, Jaipur. ----Petitioner Versus 1. Union Of India, Through The Principal Secretary, Ministry Of Finance, Department Of Revenue, Union Of India, North Block, New Delhi. 2. The Principal Commissioner Of Income Tax, Central Circle, Central Revenue Building, Statue Circle, Jaipur. ----Respondents For Petitioner(s) : Mr. R.C. Agarwal, Advocate Mr. Ashindra Gautam, Advocate For Respondent(s) : Mr. Siddharth Bapna, Advocate HON'BLE MR. JUSTICE MANINDRA MOHAN SHRIVASTAVA HON'BLE MR. JUSTICE ASHUTOSH KUMAR Order REPORTABLE 04/09/2023 1. This petition has been filed by the petitioner seeking following reliefs:- “1. Direct the respondent No.2 to issue certificate of declaration of income in Form-2 as per the provisions of rule 3 (4) of the Taxation and Investigation Regime for Pradhan Mantri Garib Kalyan Yojna Rules, 2016. 2. Any other appropriate order, which may be found just and proper in the facts and circumstances of the case, be passed in favour of the petitioner.” 2. Necessary factual matrix giving rise to present petition are in narrow encompass. The officers of the respondents conducted search and seizure operation under Section 132 of the IT Act, 1961 (hereinafter referred to as “the Act of 1961”) at the premises of the petitioner on 23.12.2016 and found cash of Rs.31,00,000/- in the possession of the petitioner. After preparing inventory of the

[2023:RJ-JP:30903-DB] (2 of 12) [CW-9052/2019] cash seized from the petitioner on 23.12.2016, the amount was deposited in PD Account on 28.12.2016. 3. The petitioner intended to take the benefit of Pradhan Mantri Garib Kalyan Yojna Scheme, 2016 (‘PMGKY Scheme’) by filing an application before respondent No.2 on 28.03.2017 along with an affidavit. It is the case of the petitioner that on the basis of such application, treating the same to be a statutory declaration, department adjusted and transferred an amount to the tune of Rs.15,46,900/- out of the seized amount kept in PD Account as per requirement of Section 199D and 199E of the PMGKY Scheme, which comes to 49.9% of the total declared income. It is also the case of the petitioner that he also deposited an amount of Rs.7,75,000/- on 31.03.2017 as 25% of the declared income as per the provisions of Section 199F of the PMGKY Scheme and explanatory note dated 27.12.2016 in order to purchase the bonds. Thereafter, the amount of Rs.15,46,900/- and Rs.7,75,000/- was treated as receipt under PMGKY Scheme and 7750 units of ZCB bonds were also issued. Thus, the case of the petitioner is that all the necessary formalities in order to avail benefits of PMGKY Scheme, 2016 were substantially complied with. Even then, the department did not issue any certificate in terms of provisions contained in Rule 3(4) of the Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojna Rules, 2016 (hereinafter referred to as “the Rules of 2016”). When despite representation, certification of declaration was not issued, the petitioner filed the present petition. 4. Learned counsel for the petitioner argued that even though the petitioner had not submitted an application in the statutory

[2023:RJ-JP:30903-DB] (3 of 12) [CW-9052/2019] form as prescribed under the law, nevertheless, out of the total amount seized from him, appropriate adjustment were made meaning thereby, the respondents had acted upon petitioner’s application for extension of benefit of PMGKY Scheme. Having thus adjusted amount payable under the PMGKY Scheme, respondents were duty bound to issue certificate of declaration. 5. On the other hand, learned counsel for the respondents resisted the claim of the petitioner mainly on the ground that the the purpose of availing the benefit of PMGKY Scheme, the petitioner was required to fulfill the mandatory requirements of the law. 6. It was highlighted that Para 3(4) of the notification prescribes the prerequisite for issuance of certificate by the Principal Commissioner of Income Tax in Form-2. In Para 3(1) of the noting PMGKY Scheme, it has been clearly mentioned that the declaration has to be made in Form-1 and Para 3(2) prescribes method of filing. The aforesaid statutory declaration was required to be submitted on or before the prescribed date i.e. 10.05.2017 (extended date). He would further submit that the statutory form is not an empty formality as it requires certain statutory declaration to be made. A simple application submitted by the petitioner without containing statutory declaration as mandated in the statutory form does not entitle the petitioner to get the benefit of the PMGKY Scheme and if any amount has been adjusted under that PMGKY Scheme, the said amount is to be dealt with in accordance with law but that cannot be made a basis to extend the benefit of PMGKY Scheme. He would further submit that explanatory note date 27.12.2016 is not applicable to the present

[2023:RJ-JP:30903-DB] (4 of 12) [CW-9052/2019] case and the petitioner is not entitled to the benefit of the Scheme despite having failed to fulfill the statutory requirements. It is also submitted that petitioner’s representation was duly responded vide letter dated 13/14.05.2019 and claim was rejected on the basis that he was required to file declaration upto 10.05.2017 in Form-1. As the petitioner failed to submit any such form, certificate of declaration has not been issued in favour of the petitioner. Learned counsel for the respondents submits that, even though, the said order rejecting his representation was passed, copy of which has also been placed on record, petitioner has chosen not to challenge the same nor has amended relief clause. As the petition was filed subsequent to rejection order, without challenging the same, the petition is not maintainable. 7. We have heard learned counsel for the parties and perused the records. 8. Vide the Taxation Laws (Second Amendment) Act, 2016 (No.48 of 2016) published in the Extraordinary Gazette of India on 15.12.2016, Income Tax Act, 1961 and the Finance Act, 2016 were amended by adding new chapter ‘IX A’ providing for Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojna, 2016. Section 199C provides for declaration of undisclosed income as below:- “199C. (1) Subject to the provisions of this Scheme, any person may make, on or after the date of commencement of this Scheme but on or before a date to be notified by the Central Government in the Official Gazette, a declaration in respect of any income, in the form of cash or deposit in an account maintained by the person with a specified entity,

[2023:RJ-JP:30903-DB] (5 of 12) [CW-9052/2019] chargeable to tax under the Income-tax Act for any assessment year commencing on or before the 1st day of April, 2017. (2) No deduction in respect of any expenditure or allowance or set-off of any loss shall be allowed against the income in respect of which a declaration under sub-section (1) is made. Explanation.-For the purposes of this section, “specified entity” shall mean— (i) the Reserve Bank of India; (ii) any banking company or co-operative bank, to which the Banking Regulation Act, 1949 applies (including any bank or banking institution referred to in section 51 of that Act); (iii) any Head Post Office or Sub-Post Office; and (iv) any other entity as may be notified by the Central Government in the Official Gazette in this behalf.” 9. The PMGKY Scheme shows that in order to avail benefit, a person is required to make on or before a date to be notified by the Central Government in the Official Gazette, a declaration in respect of any income, in the form of cash or deposit in an account maintained by the person with a specified entity, chargeable to tax under the Act of 1961 for any assessment year commencing on or before the 1st day of April, 2017. Therefore, the submission of declaration is prerequisite for availing the benefit of the PMGKY Scheme. 10. Section 199G provided for manner of declaration as below:- “A declaration under sub-section (1) of section 199C shall be made by a person competent to verify the return of income under section 140 of the Income- tax Act, to the Principal Commissioner or the

[2023:RJ-JP:30903-DB] (6 of 12) [CW-9052/2019] Commissioner notified in the Official Gazette for this purpose and shall be in such form and verified in such manner, as may be prescribed.” 11. Therefore, any person who seeks to avail the benefit of PMGKY Scheme 2016 is required to submit declaration as required under Section 199G. 12. In exercise of powers conferred under sub-section (2) of Section 199A & sub-section (1) of Section 199C of the Finance Act, 2016, the Central Government issued notification on 16.12.2016 & appointed the 17th day of December, 2016, the date on which the Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojna, 2016 was to come into force. It further appointed 31st day of March, 2017, as the date on or before which, a person could make a declaration under sub-section (1) of the said section 199C. 13. Rules were also framed in exercise of rule making power conferred under Section 199R of the Finance Act, 2016 vide notification dated 16.12.2016, called “The Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojna Rules, 2016”. Rule 3 provides for declaration of income in the form of cash or deposit in an account maintained with a specified entity, under sub-section (1) of Section 199C in Form-1. Sub-Rule (3) of Rule 3, however, provides that if any person, having furnished a declaration under sub-rule (2) of Rule 3, discovers any omission or any wrong statement therein, he may furnish a revised declaration on or before the date notified for filing declaration under sub- section (1) of Section 199C. 14. Sub-Rule (4) of Rule 3 requires the Principal Commissioner or the Commissioner to issue certificate in Form-2 to the declarant

[2023:RJ-JP:30903-DB] (7 of 12) [CW-9052/2019] within thirty days from the end of the month in which a valid declaration under sub-section (1) of Section 199C has been furnished. The statutory Form-1 appended and referable to Rule 3 of the Rules 2016, amongst various columns, provides for verification and solemn declaration as below:- VERIFICATION I …………………………. (Full name in block letters) son/daughter/wife of Shri ………………………….(Name of father/husband) hereby solemnly declare that— (a) the information given in this declaration is correct and complete to the best of my knowledge and belief; (b) the provisions of clause (a) of Section 199-O of the Finance Act, 2016 in respect of Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 are not applicable to me; (c) the provision clause (b) of section 199-O of the Finance Act, 2016 in respect of Indian Penal Code, the Narcotic Drugs and Psychotropic Substances Act, 1985, the Unlawful Activities (Prevention) Act, 1967, the Prevention of Corruption Act, 1988, Prohibition of Benami Property Transactions Act, 1988 and the Prevention of Money Laundering Act, 2002 are not applicable to me; (d) I am not notified under section 3 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992; (e) the income declared is not chargeable to tax under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015; I further declare that I am making this declaration in my capacity as………………………………. (Designation) and that I am competent to make this declaration and verify it. …………………………………….. (Signature) Place ..……. Date ……….. 15. It is, thus, seen that while submitting an application for availing the benefit of PMGKY Scheme, 2016 apart from making various deposits towards tax payable, surcharge and penalty, statutory declaration is necessary.

[2023:RJ-JP:30903-DB] (8 of 12) [CW-9052/2019] 16. Further, it is not in dispute that the cut off date for submitting an application so as to avail the benefit of the PMGKY Scheme, as notified vide notification dated 16.12.2016 was declared as 31st March, 2017, which was, later on, extended upto 10.05.2017. Therefore, if the petitioner intended to avail the benefit of statutory PMGKY Scheme, he was required under the law to submit proper application in statutory Form-1 not only giving various details of deposits but also solemn statutory declarations which were mandatory. Unless an application is made in the manner prescribed under the law, the benefit of PMGKY Scheme prescribed under the law could not be claimed. 17. The petitioner never submitted application in statutory Form- 1 much less any verification with solemn declaration, statutorily required. The petitioner banks upon a simple application placed on record, said to have been filed on 28.03.2017 (Annexure-3). The contents of the said application states that the petitioner offered to deposit the amount, by declaring that out of the seized cash proper adjustment towards payment of tax, surcharge and penalty may be made but there was nothing in the said application or in the affidavit annexed along with the same containing solemn declaration as required under the law. Present is not a case that, though, the application is not strictly in Form-1, as required under the Rules, it otherwise contains all necessary descriptions and declarations required under the law. 18. It is, thus, clear that the petitioner neither submitted statutory form nor submitted solemn declaration required under the law by way of due verification. Statutory provision requiring verification and solemn declaration on various aspects cannot be

[2023:RJ-JP:30903-DB] (9 of 12) [CW-9052/2019] treated as directory but is mandatory in nature. Even if it is argued that the petitioner offered payment of tax, surcharge and penalty by adjusting the same out of seized cash of Rs.31,00,000/-, non- submission of mandatory statutory declaration dis-entitled the petitioner to seek the benefit of PMGKY Scheme. The PMGKY Scheme being statutory in nature, benefit could be availed only by fulfilling prerequisite requirements provided under the law and not otherwise. 19. The petitioner did not avail the liberty to furnish proper declaration as required from him under sub-rule (3) of Rule 3 of the Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojna Rules, 2016. The aforesaid provision clearly provides that if any person, having furnished a declaration under sub-rule (2), discovers any omission or any wrong statement therein, he may furnish a revised declaration on or before the date notified for filing declaration under sub-section (1) of Section 199C. Therefore, on or before extended date for submission of application i.e. 10.05.2017, it was still open for the petitioner to file proper application containing all necessary details on verification and solemn statutory declaration as provided in the statutory Form-1 appended to the Rules. 20. Even in this petition also, the petitioner has not come out with any pleading with reference to the declarations enumerated in clauses (b), (c), (d) and (e) under verification clause provided in Form-1. What is important is that the declaration on the aforesaid aspect was required to be submitted on or before 10.05.2017. The statutory Scheme envisages that only those who do not suffer from any of the disqualifications as provided in clauses (b),

[2023:RJ-JP:30903-DB] (10 of 12) [CW-9052/2019] (c), (d) and (e) under verification clause provided in Form-1 would be entitled to benefit of the Scheme. That being so, solemn declaration was indeed a mandatory requirement and prerequisite to avail benefit of PMGKY Scheme. The object and purpose of verification and seeking declaration is to ensure that the applicant is a person of unblemished record and not a person with blemish indicated under clauses (b), (c), (d) and (e). Therefore, we are of the considered opinion that non-submission of solemn statutory declaration in the prescribed performa is fatal and no mandamus could be issued in favour of the petitioner so as to issue a command to the respondent-authority to extend benefit of a statutory scheme even though the law does not contemplate extension of such benefits. 21. Reliance placed on the decision of the Karnataka High Court in the case of Vijayakiran Constructions Pvt. Ltd. Versus Deputy Commissioner of Commercial Tax (Recovery 41) BCD 2 and 4, Bangalore and Ors., Writ Petition No.4491 of 2010 is misconceived both on facts and law. In that case, placing reliance upon the decision of the Supreme Court in the case of Uday Shankar Triyar Versus Ram Kalewar Prasad Singh, (2006) 1 SCC 75 that non-compliance with any procedural requirement relating to pleading, memorandum of appeal or application or petition for relief should not entail automatic dismissal or rejection, unless the relevant statute or rule so mandates, relief was granted. However, in the present case, as has been held hereinbelow, the petitioner has failed to comply with the mandatory statutory requirement for availing the benefit of

[2023:RJ-JP:30903-DB] (11 of 12) [CW-9052/2019] statutory PMGKY Scheme. Therefore, the aforesaid decision is not applicable in the present case. 22. There is yet another reason why we are not inclined to grant relief. We note that though respondents passed the order of rejection of petitioner’s claim vide communication/order dated 13/14.05.2019, the petitioner has not amended the petition to challenge the said order. The petition was filed on 15.05.2019 i.e. after the date of passing of the said order. Therefore, the petition suffers from the aforesaid defect as well. We would, however, have allowed the petitioner to amend his petition but in view of our consideration on merits, we are of the view that petitioner otherwise is not intended to any relief. 23. We also notice from the reply of the respondents that an assessment order for the relevant assessment year 2017-18 in the case of the petitioner was also passed on 24.12.2018 under Section 143(3) read with Section-153B (1) (b) of the Income Tax Act by the Assessing Officer. In the said assessment order, against total returned income at Rs.4,04,680/- income was determined at Rs.36,74,660/-, which includes amount of Rs.31,00,000/- as added in his total income on account of unexplained money under Section 69A read with Section 115 BBE of the IT Act, 1961 and taxed @ 60% and added to his total income for the Assessment Year 2017-18. Consequently, penalty proceedings under Section 271AAB (1A) (b) were initiated against the petitioner on various demands have been raised towards income tax to the tune of Rs.24,23,005/-. The sum of Rs.15,59,930/- has been adjusted against the said demand generated against the petitioner. The petitioner had filed an appeal, which has also been dismissed by

[2023:RJ-JP:30903-DB] (12 of 12) [CW-9052/2019] the Commissioner of Income Tax (Appeals)- 4 upholding the assessment order and appeal against the aforesaid order is pending before Ld. ITAT, Jaipur. 24. Accordingly, we do not find any merit in the petition and the same is dismissed. (ASHUTOSH KUMAR),J (MANINDRA MOHAN SHRIVASTAVA),J Karan/57