RAJENDRA LILACHAND SANGHAVI vs. THE PRINCIPAL COMMISSIONER OF INCOME TAX-2, PUNE AND ORS

PDF · subscribers
WP/5134/2022HC BombayHCBM01013396202211 March 2024Author: HON'BLE SHRI JUSTICE K.R. SHRIRAM,HON'BLE JUSTICE DR. NEELA KEDAR GOKHALE3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that credit for the self-assessment tax of Rs. 15,78,210/- paid for AY 2013-14 must be given. The Court reasoned that any amount paid by the Petitioner for the relevant assessment years should be credited. The Court found support for this view in its own judgments in Kamla Chandra Singh Kabali v. Principal Commissioner of Income Tax-27 & Ors. and CEAT Limited v. Commissioner of Income Tax. Consequently, the assessment order dated March 31, 2022, the demand notice dated March 31, 2022, and the penalty notice dated March 31, 2022, were quashed and set aside. The Respondents were directed to issue Form 4 under the IDS within four weeks from the date of the order, after giving credit for all amounts paid, including the advance tax and self-assessment tax. No issue was expressly left undecided.

What were the facts?

The Petitioner, Rajendra Lilachand Sanghavi, filed his return of income for Assessment Year 2017-18 on March 27, 2018, declaring an income of Rs. 8,36,800/-. He later received a notice dated March 31, 2021, under Section 148 of the Income Tax Act, 1961, for reopening the assessment. The reason for reopening was that the total tax liability of Rs. 26,05,390/- was payable on declared income of Rs. 57,89,755/- under the Income Declaration Scheme, 2016 (IDS). The Petitioner had paid Rs. 2,40,000/- on March 22, 2018, towards this liability, leaving a balance of Rs. 23,56,390/-. The Petitioner contended that if advance tax and self-assessment tax paid for AY 2012-13, 2013-14, and 2014-15 were considered along with AY 2017-18 IDS payments, the total paid would exceed the IDS liability. The Petitioner was informed that these prior tax payments could not be adjusted against the IDS liability. This led to the filing of the present writ petition.

What were the issues?

1. Whether advance tax and self-assessment tax paid by the Petitioner for Assessment Years 2012-13, 2013-14, and 2014-15 could be adjusted against the total tax liability determined under the Income Declaration Scheme, 2016 (IDS) for Assessment Year 2017-18, as per Section 148 of the Income Tax Act, 1961. Assessee's Contentions: The Petitioner argued that the total tax paid, including advance tax and self-assessment tax for earlier assessment years and payments made for AY 2017-18 under the IDS, exceeded the determined IDS liability. Therefore, credit for these prior payments should be given. Revenue's Contentions: The Revenue initially stated that advance tax and self-assessment tax paid by the Petitioner could not be adjusted against the liability under the IDS. Later, in their affidavit, the Respondents agreed to give credit for Rs. 4,50,000/- paid as advance tax. Regarding self-assessment tax of Rs. 15,78,210/- for AY 2013-14, they sought legal opinion and input from the CBDT, as it was a policy matter. The Revenue's counsel later indicated that the Board had expressed an opinion that credit for self-assessment tax could not be given.

Which sections of the Income-tax Act were involved?

Section 148

AI-generated summary — verify with the full judgment below

1/3 447-aswp-5134-2022.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.5134 OF 2022 Rajendra Lilachand Sanghavi …Petitioner Versus The Principal Commissioner of Income Tax-2, Pune & Ors. …Respondents Mr. Mihir Naniwadekar, with Mr. Rohan Deshpande, i/b. Ms. Farzeen Khambatta, for Petitioner. Mr. Suresh Kumar, for Respondent-Revenue. CORAM: K. R. SHRIRAM & DR. NEELA GOKHALE, JJ. DATED: 12th March, 2024 PC:-

1.

Petitioner had filed return of income (“ROI”) on 27th March 2018 for Assessment Year 2017-18 declaring an income of Rs.8,36,800/-. Petitioner had received notice dated 31st March 2021 under Section 148 of the Income Tax Act, 1961 (“the Act”). According to the reason for reopening the assessment, the total tax liability of Rs.26,05,390/- was payable on declared income of Rs.57,89,755/- in the Income Declaration Scheme, 2016 (“IDS”). Petitioner was called to discharge the total liability by 31st January 2020. Petitioner paid only Rs.2,40,000/- on 22nd March 2018 and, therefore, Petitioner was called upon to pay the balance amount of Rs.23,56,390/-.

2.

It is Petitioner’s case that if the advance tax and self assessment tax that Petitioner had paid for AY 2012-13, 2013-14 and 2014-15 Shivgan 2024:BHC-AS:12456-DB

2/3 447-aswp-5134-2022.doc together with the payments made for AY 2017-18 under the IDS are considered, Petitioner would have paid a total amount of Rs.26,74,784/- which was in excess of the liability determined under the IDS. Petitioner was informed that advance tax and self assessment tax paid by Petitioner could not be adjusted against the liability under the IDS. Therefore, this Petition was filed.

3.

An affidavit in reply of one Aparna M Aggarwal, Principal Commissioner of Income Tax-2, Pune, affirmed on 5th May 2022 is filed. In the said affidavit, Respondents have agreed to give credit to a sum of Rs.4,50,000/- that Petitioner had paid as advance tax. With regard to self assessment tax of Rs.15,78,210/- paid for AY 2013-14, it is stated that the legal opinion of the standing counsel has been sought in view of the decision of the Apex Court in Kumudam Publications (P) Ltd. v. Central Board of Direct Taxation1 and since it was a policy matter and opinion is yet to be received, input from the CBDT is also being sought. One thing is clear that Respondents are not averse to giving credit for the self assessment tax, but they wanted somebody to tell them to go ahead and give credit. In our view, credit for the self assessment tax of Rs.15,78,210/- paid for AY 2013-14 has to be given. Mr. Suresh Kumar states, his information is that the Board has expressed an opinion that credit for self assessment tax paid cannot be given. In our view, any amount paid by 1 (2017) 393 ITR 599. Shivgan

3/3 447-aswp-5134-2022.doc Petitioner for those relevant Assessment Years, credit has to be given and we find support for this view in judgments of this Court in Kamla Chandra Singh Kabali v. Prinicpal Commissioner of Income Tax-27 & Ors.,2 and CEAT Limited v. Commissioner of Income Tax.3

4.

Therefore, the assessment order dated 31st March 2022 has to be quashed and set aside. Ordered accordingly. Consequently, demand notice dated 31st March 2022 and penalty notice also dated 31st March 2022 are also quashed and set aside.

5.

Respondents shall issue Form 4 under the IDS within four weeks from today after giving credit to all amounts paid including the advance tax and self assessment tax.

6.

Petition disposed. (DR. NEELA GOKHALE, J.) (K. R. SHRIRAM, J.) 2 2022 (137) taxmann.com 346 (Bombay). 3 2024 SCC OnLine Bom. 557 Shivgan Signed by: Raju D. Gaikwad Designation: PS To Honourable Judge Date: 15/03/2024 12:52:20

More judgments on Section 148

All 35,022 judgments and leading authorities on Section 148 →

Recent GST High Court judgments

Search GST case law →