| Question And Answer | |
|---|---|
| Subject: | IDS- 2016 and Credit of Advance tax |
| Category: | Income-Tax |
| Querist: | Ruchi Bhansali |
| Answered by: | Research Team |
| Tags: | credit for advance tax, ids, Tax deduction at source |
| Date: | October 29, 2021 |
Assessee firm has filed a declaration under IDS where in they have disclosed for AY 2015-16: Rs. 9,82,24,010/- as Business Income and For AY 2016-17: Rs. 1,15,04,953/- as Business Income. In the said declaration the assessee firm claimed the credit for the Advance Tax and TDS for both the assessment year.
However CIT has denied the credit for the said payment on the ground that it is not permissible to give credit of advance tax in IDS.
On the basis of this information the AO issued Notice U/Sec.148 for A.Y. 2017-18, on the ground of Invalid declaration due to non payment of taxes as CIT has not considered the amount paid by the assessee towards advance tax .
whether assessee can file writ petition against the denial of credit of advance tax under IDS declaration?
whether the AO is correct in issuing notice U/SEc.148 for A.Y. 2017-18 when the income declared under IDS is business income for A.Y. 2015-16 and 2016-17?
please guide
Please refer Circular No 25 of 2016 dt 30 -6 2016 ( 2016) 385 ITR 19( St) , wherein the CBDT clarified as under Q. NO. 4. Whether credit for tax deducted , if any in respect of income declared shall be allowed ?
Answer: Yes ; credit for tax deducted shall be allowed only those cases where the related income is declared under the Scheme and the credit for tax has not already been claimed in the return of income file for any assessment year .
It seems the denial of credit for tax deducted at source and Advance tax paid is not justified , The CBDT circular is binding on the Commissioner . The assessee can file writ before the High Court as there is no other alternative remedy .
In Alluri Purnachandra Rao v. CIT ( 2019 ) 419 ITR 462 ( Telengana ) ( HC) after referring the Circular referred above , the Court allowed the writ petition of the assessee wherein the revenue has not adjusted the advance tax paid by the assessee towards amount due under the IDS .
As regards the reassessment notice is concern the assessee has to follow the due process of law before filing a writ before the High Court . It is desirable to approach the Tax Consultant who can advice properly after analysing the recorded reason and reading the order disposing of the objection , whether advisable to file writ or follow the normal appeal procedure .