INCOME DECLARATION SCHEME 2016 Archives - Tax Heal

Benefit of 2016 Income declaration scheme not available even if search proceedings under section 132 initiated after launching of scheme

CA Satbir Singh — Tue, 16 May 2017 13:18:28 +0000

Held

In the taxing statutes, the Court has to be very slow in interpreting the statutes where intention of the legislature is to curb the evasion of tax. This is a peculiar case where the Government has granted the benefit under the scheme only to the persons who are not covered under Section 132 of Act and other proceedings. If the class which has been debarred under the scheme and any person acquiring the same debar during the scheme can be granted the benefit of the scheme, the answer in is ‘No’. The terms are not which are prohibited by law prior to launching of the scheme. If anybody acquired any disqualification during the scheme, has to be treated equal otherwise that will create two class.

HIGH COURT OF RAJASTHAN

Surendra Pal Singh Sahni

Director General of Income-tax (Investigation), Jaipur

K.S. JHAVERI, ACTG.CJ.
AND VIJAY KUMAR VYAS, J.

D.B. SPECIAL APPEAL WRIT NO. 362 OF 2017

MARCH 24, 2017

Suresh Sahni and R.M. Sharma for the Appellant.

ORDER

1. By way of this appeal, the appellant has challenged the judgment and order of the learned Single Judge, whereby the learned Single Judge has dismissed the writ petition of the appellant/petitioner.

2. The appellant is an assessee and has challenged the action of the respondents not granting him the benefit of scheme, which was launched by the Central Government under the Finance Act, 2016.

3. Learned counsel for the appellant has contended that the Central Government has come with an Income Declaration Scheme, 2016 on 14.05.2016, which was made effective from 01.06.2016 to 30.09.2016. The appellant has faced in between the proceedings under Section 132 of the Income Tax Act, 1961 and a search warrant was also served upon him and a search was carried out from 30.06.2016 to 02.07.2016. In the meantime before 30.09.2016, the appellant has applied pursuant to the scheme which was launched by the Central Government and contended that in view of para/clause 196 of the scheme, he is entitled to be covered under clause 196(e)(ii), which reads as under:-

“Scheme not to apply to certain persons.

196. The provisions of this scheme shall not apply-

(a) to (d)**

(e) in relation to any undisclosed income chargeable to tax under the Income-tax Act for any previous year relevant to an assessment year prior to the assessment year beginning on the 1^st day of April, 2017-

(i)**

(ii) where a search has been conducted under section 132 or requisition has been made under section 132A or a survey has been carried out under Section 133A of the Income-tax Act in a previous year and a notice under sub-section (2) of section 143 for the assessment year relevant to such previous year or a notice under section 153A or under section 153C of the said Act for an assessment year relevant to any previous year prior to such previous year has not been issued and the time for issuance of such notice has not expired; or”

4. Since the raid and search proceedings under Section 132 were initiated after the launching of the scheme and clause (ii) covers only prior to the launching of the scheme and that too 01.06.2016, in that view of the matter the authority has misinterpreted the provisions and the appellant has been deprived of his legitimate and legal right of exercising power under the scheme. It is further contended that though first proceedings are pending before the learned Single Judge in S.B. Civil Writ Petition No.2481/2017, where the order of the designated authority dated 03.10.2016 is challenged, however in the meantime notice under Section 153A of the Act of 1961 was issued and the present writ petition was dismissed and his earlier writ petition has become infructuous in view of the order passed by the learned Single Judge.

5. Learned counsel for the appellant has raised the following questions for consideration:-

“1.		Whether the IDS, 2016 is a self contained code and can the designated authority go beyond the scope and mandate of the same?
“2.		Whether the designated authority and the Learned Single Judge has correctly interpreted the mandate of 196(e) (ii) ?
“3.		Whether the learned Single Judge was legally right in holding that the provisions of the Finance Act, 2016 (IDS,2016) cannot override the provisions of Income Tax Act, 1961 during the currency of the scheme?
“4.		Whether the scheme is a special legislation for a limited period i.e. 1^st June 2016 to 30^th September 2016 and shall prevail upon the general law i.e. Income Tax Act, 1961?
“5.		Whether despite the non-ambiguity in the language of 196(e)(ii), the designated authority or the courts can hunt for the aims and objects of the statute?”

6. Counsel for the appellant has taken us to the scheme and its clause 196(e)(ii) and contended that the Legislature while interpreting has not included a class which can make declaration if any proceedings are initiated under Section 132 of the Act after 01.06.2016.

7. We have heard the Counsel for the appellant.

8. Before proceedings with the matter, it will not be out of place to mention here that in the taxing statutes, the Court has to be very slow in interpreting the statutes where intention of the legislature is to curb the evasion of tax. This is a peculiar case where the Government has granted the benefit under the scheme only to the persons who are not covered under Section 132 of Act and other proceedings. If the class which has been debarred under the scheme and any person acquiring the same debar during the scheme can be granted the benefit of the scheme, the answer in is ‘No’. The terms are not which are prohibited by law prior to launching of the scheme. If anybody acquired any disqualification during the scheme, has to be treated equal otherwise that will create two class.

9. In our considered opinion, the scheme of 2016 will not override the provisions of the Income Tax Act and the scheme which has come by way of limited purpose cannot prevail over the Income Tax Act.

10. In that view of the matter, the order passed by designated authority is just and proper. We are in complete agreement with the view taken by the learned Single Judge. No interference is called for.

11. Hence, the appeal being devoid of merit deserves to be dismissed and the same is hereby dismissed.

12. At this stage, Counsel for the appellant has asked for a certificate under Section 134A of the Act. In our considered opinion, it is not a matter of general importance and has a very limited clause and interpretation put forth by us will cover the field. In that view of the matter, the certificate is rejected.

Time period of property declared under Income Declaration Scheme 2016 -Rules Notified

CA Satbir Singh — Thu, 01 Dec 2016 03:36:56 +0000

MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION No. 108/2016- INCOME TAX

New Delhi, the 29th November, 2016

G.S.R. 1100(E).—In exercise of the powers conferred by clause (ii) of Explanation 1 to clause (42A) of section 2, read with section 295 of the Income–tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1. (1) These rules may be called the Income-tax (34th Amendment) Rules, 2016.

(2) They shall come into force from the 1st day of June, 2016.

2. In the Income-tax Rules, 1962, in rule 8AA, after sub-rule (2), the following sub-rule shall be inserted, namely:‑

“(3) In the case of a capital asset, declared under the Income Declaration Scheme, 2016,‑

(i) being an immovable property, the period for which such property is held shall be reckoned from the date on which such property is acquired if the date of acquisition is evidenced by a deed registered with any authority of a State Government; and

(ii) in any other case, the period for which such asset is held shall be reckoned from the 1st day of June, 2016.”.

[Notification No. 108/2016/F. No.142/01/2016-TPL]

Dr. T. S. MAPWAL, Under Secy.

Note: The principal rules were published vide Notification S.O. 969 (E), dated the 26th March, 1962 and last amended vide Notification S.O. 3573(E), dated the 28th November, 2016.

Revised IDS 2016 declaration due to genuine Mistake : CBEC Clarify

CA Satbir Singh — Wed, 16 Nov 2016 05:08:11 +0000

Instruction No.12 of 2016

F.No.370142/8/2016-TPL (Part)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
(TPL Division)

***

New Delhi, the 11th November, 2016

To,

All Principal Chief Commissioners of Income-tax

Subject: – The Income Declaration Scheme, 2016 (the Scheme) -reg.

Instances have been reported by the field authorities that some of the assessees have filed revised declaration under the Scheme on or before 30.09.2016 to rectify error committed during filing of the original declaration. It has also been reported that the income declared under such revised declaration is lower than the income declared under original declaration on account of some typographical or bonafide error. Attention in this regard has been drawn with reference to reply to question No.1 contained in Circular No.27 of 2016 dated 14.07.2016 which reads that a revised declaration can be filed on or before the date of closure of the Scheme provided the undisclosed income in the revised declaration is not less than the undisclosed income declared in the declaration already filed.

2. The issue has been examined. It is clarified that where jurisdictional Principal Commissioner or Commissioner is satisfied that the mistake in filing original declaration in Form No.1 appears to be genuine and bonafide, the concerned Principal Commissioner or Commissioner may address the same while processing the declaration. In such cases a facility has been provided to the jurisdictional Principal Commissioner or Commissioner to generate rectified Form No.2 on the ITD Systems.

3. Queries have also been received as to how an Assessing Officer should address the cases where an assessee claims that the issue under pending assessment proceeding is covered by declaration made under the Scheme. In this context, it is clarified that in cases where the assessee claims that an issue under an assessment proceeding has nexus with the declaration filed under the Scheme, the Assessing Officer may obtain a written undertaking along with relevant documentary evidence from the assessee about the issues and quantum of amount covered under the declaration having bearing on the pending assessment proceeding.

4. The Assessing Officer on being satisfied about the nexus of the amount declared under the Scheme, either in whole or in part, with the issue raised in the assessment proceeding, shall provide the benefit of such amount in the pending assessment provided the assessee duly pays the tax, surcharge and penalty payable under the Scheme. However, in respect of cases getting barred by limitation on 31.12.2016, such benefit shall be provided, if the assessee pays the first instalment i.e. 25% of the amount payable on the declaration filed under the Scheme.

5. The instruction may be brought to the notice of all the officers concerned.

(Dr. T.S. Mapwal)

Under Secretary (TPL-IV)

CBDT committed to Strict Confidentiality of IDS 2016

CA Satbir Singh — Mon, 03 Oct 2016 13:23:56 +0000

CBDT committed to Strict Confidentiality under Income Declaration Scheme: 2016

While announcing the results of the Income Declaration Scheme 2016 on 1st October, 2016 at a press conference in Delhi, the Honourable Finance Minister Shri Arun Jaitley stressed that no break-up of these declarations on the basis of trades/cities/states shall be released in order to ensure absolute secrecy with respect to the identity of the declarants.

Central Board of Direct Taxes (CBDT) clarifies that no official list of region wise declarations has been issued. The Income Tax Department is committed to maintaining strict confidentiality of declarations made under the Income Declaration Scheme 2016. CBDT requests the general public not to pay any heed to such fraudulent messages circulating on social media.

Ministry of Finance 03-October, 2016

Rs.65250 crore declared under Income Declaration Scheme 2016

CA Satbir Singh — Sun, 02 Oct 2016 09:31:48 +0000

Income Declaration Scheme 2016 unearths Rs.65250 crore of hitherto Undeclared Income and Assets; 64275 declarations filed under IDS-2016 up to the midnight of 30th September, 2016

The Income Declaration Scheme, 2016 came into effect from 1^stJune, 2016. It provided an opportunity to persons who had not paid full taxes in the past to come forward and declare their domestic undisclosed income and assets. Declarations could be made online as well in printed copies of the prescribed form up to midnight on 30th September, 2016.

In order to facilitate the taxpayers and to spread awareness about the Scheme, the CBDT issued a number of FAQs to address various queries received. Major issues clarified included manner of declaration of fictitious liability, allowance of cost indexation and holding period benefit for registered immovable property, sanctity of valuation report etc. Difficulties with respect to payment of taxes in a short span were removed by permitting payment of tax in 3 instalments, the last being in September 2017. Absolute confidentiality of the declarations made was promised under the scheme to reassure the declarants.

An appeal was made by the Honourable Prime Minister of India to the general public to come clean on taxes due. The FM personally addressed stakeholders at many stations. More than 5500 public meetings in various cities were conducted by the department. Innovative publicity methods like Talkathons, Walkathons, Nukkad Nataks, were used to spread awareness about the Scheme. The Department’s strategic use of taxpayer information and data mining techniques further spurred the declarations.

These steps resulted in a tremendous response from the general public, especially in the last two months. As a consequence, 64275 declarations were filed upto the midnight of 30^th September, 2016 with an aggregate of Rs.65250 Crore worth of hitherto undeclared incomes in the form of cash and other assets being declared. With the final stock taking of declarations being filed in physical printed forms all over the country till late night on the last day, this number is likely to be further revised upwards.

This Scheme was the latest initiative of the Government of India towards tackling. The major steps taken by the Government against Black Money in the last 2-1/2 years include:

SIT: Many recommendations accepted such as mandatory quoting of PAN for cash transactions etc.

Legal Framework: Making tax crimes predicate offence under PMLA; Amendment of FEMA to provide for confiscation of domestic assets in place of foreign assets; Enactment of Black Money Law and Amendment to Benami Act.

International Treaties: Signing of FATCA with US; Amendment of Mauritius Treaty; Initiative for signing of Automatic Exchange of Information Treaty with all major countries including Switzerland, Initiatives under BEPS (Based Erosion and Profit Sharing) such as country by country reporting, PoEM ( Place of Effective Management) etc.

Detection and administration of tax evasion cases: Assessment of Rs.8000 crore in HSBC cases as well as filing of 164 prosecution complaints in l75 HSBC cases; detection of Rs.5, 000 crores of undisclosed deposits in foreign accounts made out of ICIJ cases, 55 prosecution cases filed in those cases; Big investigation in Panama cases has led to 250 references being made to other countries asking for details about tax evaders, bank accounts etc. The quantum jump in the searches and survey has resulted in seizure of Rs.1986 crores as well as undisclosed income of Rs.56, 378 crore in the last two and half years. The upgradation of IT capabilities has led to non-intrusive methods of detection of tax evasion. Rs.16, 000 crores received as tax out of one such system of Non-filers of Monitoring System (NMS). 3626 cases of prosecution and compounding in the last two and half years which is more than double as compared to previous two years.

The faith reposed by the Government in the CBDT and the Income tax Department strengthened the administration of the Scheme. This was a major step towards reigning in the parallel economy of the country and merging it with the mainstream. The CBDT endeavours to continuously use non-intrusive methods towards widening and deepening of the tax base.