· The petitioner company had been filing its return of income till the A.Y. 2009-10, however, due to serious disputes amongst its Directors, ex-Directors and certain shareholders, the accounts of the company could not be audited, and thus, no return was filed from A.Y. 2010-11 onwards. Despite its inability to file the return, the petitioner paid advance tax through various amounts, totaling to Rs.14,98,30,000/-.
· Anticipating that proceedings may be initiated by the Revenue for petitioner’s failure to file return of income, the petitioner applied u/s 119(2)(b) of the Act, seeking for permission to file the returns of income on the basis of unaudited accounts. The said application of the petitioner was still pending.
· Pending the disposal of the application filed u/s 119(2)(b) of the Act, the petitioner made a declaration under the Income Declaration Scheme 2016, and disclosed an income of Rs.43.55 crores. The total tax payable was Rs.19.60 crores, against which the advance tax and TDS deducted totaled to Rs.16.49 crores, leaving the net tax payable at Rs.3.11 crores. The petitioner, however, received an order from the Pr. CIT, demanding a tax of Rs.19.60 crores, not allowing the credit of advance tax and TDS already deposited and deducted.
· After considering the above facts, the Court stated that the admitted objective of the Scheme was to enable assessees who did not file their returns, an opportunity to do so. The Court further opined that there is no bar, express or implied, which precludes taking into account of previously paid amounts which have nexus with the periods sought to be covered by the scheme.
· The Court further stated that all that the words of the statute enjoin are that the tax and surcharge amounts under the scheme "shall be paid on or before a date to be notified". These words necessarily refer to all payments and are not limited in their meaning to only what is paid immediately before, or in the proximity of the declaration filed.
· Therefore, the court directed the Revenue to process the petitioner’s application under the IDS 2016, and give adjustment or credit of the amounts paid as advance tax and TDS, and accept the balance amounts.
For further reading, refer the attachment.
Further Reading