Supreme Court Allows Adjustment Of Installments Made Under Income Declaration Scheme For Computing Tax Liability
A Bench of Supreme Court, consisting of Justices U.U. Lalit and P.S. Narasimha, allowed the adjustment of installments made under the "Income Declaration Scheme, 2016" in computing the tax liability of the Assessee for the relevant assessment years. The Assessee, having made a declaration under the "Income Declaration Scheme, 2016", had made two installments of tax with respect to...
A Bench of Supreme Court, consisting of Justices U.U. Lalit and P.S. Narasimha, allowed the adjustment of installments made under the "Income Declaration Scheme, 2016" in computing the tax liability of the Assessee for the relevant assessment years.
The Assessee, having made a declaration under the "Income Declaration Scheme, 2016", had made two installments of tax with respect to the income disclosed under the Scheme, but defaulted in the payment of the final installment. The Assessee had made an application to the Principal Commissioner of Tax (PCIT) and the Central Board of Direct Taxes (CBDT) for extension of time limit for payment of the final installment, which was rejected by the PCIT on the ground that he had no authority to grant such extension under the Scheme. The Assessee approached the Supreme Court, challenging the Gujarat High Court order of 2021 dismissing Assessee's writ petition seeking extension of time to pay the final installment and continue to avail the benefit of the Scheme.
The counsel for the Assessee submitted that in pursuance of the Scheme, the Assessee had declared undisclosed income and showed willingness to pay tax as per the terms of the Scheme. The Assessee, however, having paid two of the three instalments, defaulted in the payment of the final installment. The counsel for the Assessee sought the relief of adjustment of amounts deposited under the Scheme towards computation of tax liability by the Revenue Department.
While the Income Declaration Scheme, 2016 gives an opportunity to citizens to declare undisclosed income and pay tax, surcharge and penalty as per the terms of the Scheme, Section 191 of the Scheme provides that any tax, surcharge and penalty paid in pursuance of the declaration shall not be refundable.
The Bench, observing the peculiarity of the facts of the present case, held that the benefit of adjustment of amounts deposited under the Scheme must be given to the Assessee by the Revenue, while computing his tax liability.
"In the peculiar facts and circumstances of the instant case, we direct that the appellant be given benefit of the amounts deposited towards first two installments while reckoning the tax liability of the appellant after revised assessment."
Case Title: Yogesh Roshanlal Gupta Vs CBDT