Question And Answer
Subject: IDS- 2016 and Credit of Advance tax
Querist: Ruchi Bhansali
Answered by:
Tags: , ,
Date: October 29, 2021
Query asked by Ruchi Bhansali

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

File Uploaded: Not Available

Answer given by

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 .

Disclaimer: This article is only for general information and is not intended to provide legal advice. Readers desiring legal advice should consult with an experienced professional to understand the current law and how it may apply to the facts of their case. Neither the author nor and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any inaccurate or incomplete information in this article nor for any actions taken in reliance thereon. No part of this document should be distributed or copied (except for personal, non-commercial use) without express written permission of

Leave a Reply

Your email address will not be published. Required fields are marked *