Madhya Pradesh High Court
Smt. Sangeeta Agrawal vs Principal Commissioner Of Income Tax I on 3 August, 2018
HIGH COURT OF MADHYA PRADESH :INDORE BENCH
W.P. No.16028/2018
(Smt. Sangeeta Agrawal Vs. Principal Commissioner of Income Tax-1 Aayakar Bhawan)
Indore dated: 03/08/2018
Shri Ashish Goyal, learned counsel for the petitioner.
Ku. Veena Mandlik, learned counsel for the respondent.
Heard on the question of admission.
By this writ petition under Article 226 of the Constitution of India, the petitioner is praying for quashment of communication dated 22/01/2018(Annexure-P/1) by which the respondent rejected the petitioner's application for adjustment or refund of the amount paid under Income Declaration Scheme - 2016.
2. The facts of the case are that the petitioner being an Assessee applied for the Scheme of Income Declaration Scheme - 2016, as declared by the Govt. of India, which came into effect from 1st June, 2016. It provides an opportunity to persons who have not paid full taxes in the past to come forward and declare their undisclosed income and assets.
3. Accordingly, the petitioner had to disclose her undisclosed income under Section 183 of Finance Act by 30/09/2016.
4. The petitioner has disclosed Undisclosed Income Rs.29,16,156/- for Assessment Year 2014-15 determining the total tax payable (including penalty) thereon at Rs.13,12,271/-.
5. The case of the petitioner was selected for scrutiny for HIGH COURT OF MADHYA PRADESH :INDORE BENCH W.P. No.16028/2018 (Smt. Sangeeta Agrawal Vs. Principal Commissioner of Income Tax-1 Aayakar Bhawan) Assessment Year 2014-15 and notice under Section 143(2) was issued on 18/09/2015 and, therefore, rejected the application.
6. Learned counsel for the petitioner has submitted that he has paid the first installment amounting to Rs.3,28,068/- on 19/11/2016 and after coming to know about the aforesaid, he prayed for refund of the amount.
7. As per Clause No.191 of the Finance Act, 2016, any amount paid under Scheme is not refundable and, therefore, he prayed for adjustment of the aforesaid amount.
8. To support his argument he has drawn our attention to the decision of the Hon'ble Apex Court in the case of Hemlatha Gargya Vs. CIT (2003) 128 Taxman 190 in respect of similar Scheme which was issued in the Year 1997 and submitted that in view of the law laid by the Apex Court, his application cannot be rejected and submitted that in the aforesaid matter the issue relates to Scheme VDIS, 1997 in which, it was held that the assessees were not entitled to the benefits of the scheme since the payments made by them were not in terms of the scheme, the revenue authorities were directed to refund or adjust the amounts already deposited by the assessees in purported compliance with the provisions of the scheme to the concerned asesseees in accordance with law. He further submitted that similar direction has been made by the Andhra pradesh High Court in the case of Patchala Seethramaiah vs. Commissioner HIGH COURT OF MADHYA PRADESH :INDORE BENCH W.P. No.16028/2018 (Smt. Sangeeta Agrawal Vs. Principal Commissioner of Income Tax-1 Aayakar Bhawan) of Income-tax (1999) 107 Taxman 305(AP) as well as Bombay High Court in the case of Sajan Enterprises vs. CIT (2006) 151 Taxman 164(BOM). With the aforesaid, he prays that the impugned order be quashed and respondent be directed to adjust the amount of tax already paid under the Income Declaration Scheme - 2016 against the demand which is outstanding in relation to the pending Assessment Year specifically Assessment Year 2014-15.
9. In the case of Patchala Seethramaiah(supra) the Apex Court has held that when Commissioner declined to grant certificate under Section 67(2) of the Finance Act, 1997(Voluntary Disclosure of Income Scheme 1997) on the ground that declarant paid tax beyond prescribed period, such declaration was non-est, and consequently, revenue was not entitled to retain amount of tax paid under such declaration. It was also held that the retention of tax contrary to the very scheme was in teeth of Article 265 of the Constitution of India, therefore, the provision under Section 70 could not have any application to a situation where the tax is paid beyond the prescribed period and accordingly the retention of the said tax by the department was illegal and the petitioner was entitled to refund the same.
10. In the case of Sajan Enterprises(supra), wherein the assessee filed a declaration under voluntary disclosure scheme,1997, but did not pay the entire tax liability within stipulated period of 3 months from date of filing of HIGH COURT OF MADHYA PRADESH :INDORE BENCH W.P. No.16028/2018 (Smt. Sangeeta Agrawal Vs. Principal Commissioner of Income Tax-1 Aayakar Bhawan) declaration. It was held by the Apex Court that any amount paid after 90 days cannot be accepted under the scheme, hence, the balance amount will have to be refunded back to the assessee.
11. Learned counsel for the respondent opposed the prayer and submitted that the Scheme of 2016 is very clear and there is no provision to adjust the amount and, therefore, no such direction can be issued and prays for dismissal fo the writ petition.
12. Para 14 of the decision of the Hon'ble Supreme Court in the case of Hemlatha Gargya(supra) is relevant which reads as under :-
14. As a consequence, in our view, the appeals preferred by the assessees must be and are hereby dismissed whereas the appeals preferred by the Revenue Authorities must be and are hereby allowed. However, having held that the assessees are not entitled to the benefit of the Scheme since the payments made by them were not in terms of the Scheme, we direct the Revenue Authorities to refund or adjust the amounts already deposited by the assessees in purported compliance with the provisions of the Scheme to the concerned assessees in accordance with law. All the appeals are accordingly disposed of without any order as to costs.
13. Considering the aforesaid, so also the law laid by the Bombay High Court in the case of Hemlatha Gargya(supra) as well as in Sajan Enterprises(supra), we quash the HIGH COURT OF MADHYA PRADESH :INDORE BENCH W.P. No.16028/2018 (Smt. Sangeeta Agrawal Vs. Principal Commissioner of Income Tax-1 Aayakar Bhawan) impugned order and direct the respondent - Revenue to adjust the amount of Rs.3,28,068/- which has been deposited by the petitioner in relevant Assessment Year 2014-15.
14. In the result, the writ petition stands allowed and disposed of, but without any order as to costs.
(P.K. Jaiswal ) (S.K. Awasthi)
Judge Judge
pn
Preetha Nair
2018.08.04
15:37:53 +05'30'