SUNIL DAMODAR NAIK ,THANE vs. DY COMMISSIONER OF INCOME TAX CIRCLE -3, THANE

Aggrieved, assessee preferred an appeal before learned CIT(A), on 22.12.2018. During first appellate proceedings, central government issued notification no. 103/2019/F.No. 370149/159/2019 TPL dated 13.12.2019 and extended the date of payment till 31.01.2020. The notification was made application with effect from 01.06.2016 i.e the date of commencement of Income Disclosure Scheme-2016. Appellant assessee paid the balance amount of Rs. 17,79,500/- on 21.01.2020 and submitted before learned CIT(A). However, learned CIT(A) partly allowed assessee’s appeal by directing the assessing officer to give credit to assessee for taxes paid under IDS-2016, but declined to grant relief in respect of assessee’s request for treating Rs. 80,00,000/- as disclosed income.

Aggrieved by the impugned order, appellant assessee has filed this second appeal before the Tribunal on the ground that the demand raised by the revenue is null and void as he has already paid all the taxes in accordance with the mandate of the Income Declaration Scheme-2016.

In response to the notice issued by the tribunal, learned DR appeared and participated in the proceedings.

We have perused the records and heard learned representatives for both the parties.

Learned representative for the assessee has submitted that learned CIT(A) has erred in confirming AO’s addition of assessee’s disclosed income of Rs. 80,00,000/- for A.Y. 2012-13 as undisclosed income, despite the entire compliance made by assessee by paying the balance tax within the stipulation period prescribed as per notification dated Sunil Damodar Naik 13.12.2019 r/w IDS-2016, which is made effective retrospectively with effect from 01.06.2016. Prayed to quash the impugned order along with reopening of the assessment and order passed in consequence thereof.

Learned DR has vehemently supported the impugned order.

The main point for consideration under appeal is as to whether the reopening of the assessment for the A.Y. 2012-13 and the assessment order passed in consequence thereof is bad in law.

It is worth noting that the Central Government framed the scheme for declaration of undisclosed income under the finance Act-2016 and was called The Income Declaration Scheme-2016. Section 183 of the said scheme envisages declaration of undisclosed income, the tax, surcharge and penalty payable under the scheme in respect of the undisclosed income, shall be paid on or before a date notified by the central Government in the official Gazette. The scheme subsequently provided that any amount of tax paid u/s. 184 in proceeding of the declaration made u/s. 183 shall not be reopened.

In the instant case, the assessee made declaration of the undisclosed Income for A.Y. 2012-13 by clubbing the income for A.Y. 2010-11, 2011-12 and 2014-15. The principal commissioner specified the amounts to be paid by the assessee as tax, surcharge and penalty and the date and percentage of amount was to be deposited in three instalments as stated hereinbefore. The assessee, made default of payment of Rs. 17,79,500/- in the payment of third instalment and could not pay by or before 30.09.2017, which was the stipulated date under the scheme and initial notifications. However notification dated 13.02.2019 was issued by the Central Government and extended date of payment of such amount till 31.01.2020, along with Sunil Damodar Naik interest on such amount @1% for every month. The notification was brought into force with effect from 01.06.2016 retrospectively. Assessee paid the balance tax of Rs. 17,79,500/- along with interest of Rs. 4,98,260/- on 21.01.2020 as per CBDT e-receipt for e-tax payment at page 29 of assessee’s paper book.

Learned CIT(A), while passing impugned order, has taken support from the judgement of the Hon’ble Supreme Court in Yogesh Roshanlal Gupta V. Central Board of Direct Tax [2022] 135 taxmann.com 209(SC), wherein the limited issue before Hon’ble Supreme Court was with respect to the adjustment of the amount deposited towards first two instalments so that in the tax liability computed by the department after revised assessment, appropriate relief could be afforded to the petitioner. Hon’ble Supreme Court granted this limited relief. The applicability of Central Government notification dated 13.12.2019 was not the issue before the Hon’ble Apex Court. Learned CIT(A) has, misread the judgement of Hon’ble Supreme Court and declined the relief sought by the assessee which was within the four walls of the aforesaid scheme/notification. Learned CIT(A) thus failed to consider the notification dated 13.02.2019 in its true sense. Revenue has neither disputed the genuineness of the aforesaid notification dated 13.12.2019 nor disputed the entire payment of Rs. 84,15,000/- along with interest of Rs. 4,98,260/- made by assessee as depicted at page 23 to 29 of assessee’s paper book.

In view of aforesaid discussion, we hold that the assessee has validly deposited the tax, surcharge, interest, penalty as required under IDS- 2016 r/w notification dated 13.12.2019. In such circumstances, learned CIT(A) has failed to appreciate that the default made by Sunil Damodar Naik assessee in the part payment of Rs. 17,79,500/- stood rectified retrospectively in view of notification dated 13.12.2019. In view of what we have held hereinabove, the main issue framed for consideration is thus determined in favour of the assessee and against the revenue.

In the result, the appeal is allowed. The impugned order dated 29.11.2023 is set aside to the extent of grounds raised by assessee. The reopening, as held bad in law, is quashed. The assessment order dated 03.12.2018 passed in consequence thereof also stands quashed. Order pronounced on 17.10.2024.

Sd/- Sd/- (BR BASKARAN) (SUNIL KUMAR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 17/10/2024 Anandi Nambi, Steno Copy of the Order forwarded to: