Income Declaration Scheme 2016, Assessee Deposited Amount, Dept. Claim Erroneous; Bombay High Court

The Bombay High Court has directed the department to issue certificates as the assessee deposited all amounts under the Income Declaration Scheme, 2016 (IDS).

The bench of Justice G. S. Kulkarni and Justice Somasekhar Sundaresan has observed that the petitioner or assessee in fact complied with all the requirements under the IDS, and the appropriate amount of tax deposited is sufficient to accept the case of the petitioner. Thus, the assessment order cannot be held to be legal. It would be required to be quashed and set aside on the department's own, showing that the petitioner had deposited all the amounts under the IDS. The petitioner, accordingly, had become entitled to the benefit under a scheme.

The petitioner/assessee has sought the direction for the department to act in furtherance of the declaration made by the petitioner under IDS and issue the appropriate Form 4 Certificate of Declaration.

The petitioner submitted that the entire basis for the assessing officer to issue the notice and pass the assessment order was that the petitioner had not deposited the tax amounts that would be liable to be deposited. However, the petitioner had made a declaration in Form 1 under the Income Declaration Scheme, 2016 (IDS), which came into effect on June 1, 2016.

The petitioner contended that the entire basis for the assessing officer to proceed on the assumption that the petitioner had not deposited the tax was incorrect. The petitioner had deposited the tax amounts on November 30, 2016, March 30, 2017, and September 30, 2017. There was no question of any mismatch and/or such payments not being taken into consideration while issuing the notice, as well as the passing of the reassessment order under Section 147, read with Sections 144 and 144B.

The department admitted that, as per the details of the challans furnished by the assessee, the seven payments were made by the petitioner, totaling Rs. 1,48,50,000 towards the liability against the declaration made under the IDS.

The court held that the basis on which the assessing officer had concluded that the petitioner had not complied with the terms and conditions of the IDS and had not deposited the tax was certainly erroneous.

The court allowed the petition and directed the department to issue an appropriate certificate of the deposit of tax under IDS to the petitioner within a period of four weeks.

Counsel For Appellant: Sanket S. Bora

Counsel For Respondent: Suresh Kumar

Case Title: Arihant Developers Versus Principal Commissioner of Income Tax

Case No.: Writ Petition No. 575 Of 2023

Click Here To Read The Order