| Question And Answer | |
|---|---|
| Subject: | Reassessment proceedings U/sec. 148 on the basis of rejection of IDS declaration |
| Category: | Income-Tax |
| Querist: | Prerna bora |
| Answered by: | Research Team |
| Tags: | advance tax, IDS declaration, Reassessment |
| Date: | November 12, 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 ,self assessment tax paid prior to date of IDS 2016 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 and self assessment 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 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 which is regular income earn and chargeable to tax U/Sec 4 and 5 for A.Y. 2015-16 and 2016-17 ? Pl guide
In Umesh D. Ganore v. PCT [2019] 263 Taxman 727 / 413 ITR 66 (Bom) High Court following the judgement in Earnest Business Services (P.) Ltd. v. CIT ( 2017 ) 393 ITR 453 ( Bom) ( HC) after considering the Judgement of Delhi High Court in Kumudam Publications P. Ltd. v. CBDT (2017) 393 ITR 599 /247 Taxman 25/294 CTR 54 /150 DTR 33 (Delhi) (HC) SLP of revenue is dismissed ; CBDT v Kumudam Publications P. Ltd ( 2020) 269 Taxman 207 (SC) the Court held that tax paid or deposited by assessee as self assessment tax or by way of advance tax could not be adjusted or set off against tax payable under Income Declaration scheme, 2016 on undisclosed income. However, in Atluri Purnachandra Rao v. PCIT (2019)419 ITR 462 / (2020) 188 DTR 339 (Telangana)(HC) the Court held that the amounts paid as advance tax can be adjusted towards amounts due under scheme. Rejection of application is held to be not valid .
The issue being debatable , the notice issued u/s 148 may not be good in law . The assessee may have to file the return under protest in respect of notice issued u/s 148 of the Act following the due process of law . Request for recorded reasons , after receiving the recorded reasons file an objection . After disposal of objection file a writ before the High Court.