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Virag Tiwari Vs. Principal Commissioner Of Income Tax-21 & Others
March, 20th 2018
$~
*       IN THE HIGH COURT OF DELHI AT NEW DELHI

+                        WRIT PETITION (CIVIL) NO. 6312/2017

                                        Reserved on : 21st November, 2017
                                       Date of decision: 12th March, 2018

        VIRAG TIWARI                                            ..... Petitioner
                             Through     Mr. Balbir Singh, Sr. Advocate with
                             Mr. Rajesh Jain and Ms. Rubal Bansal, Advocates.

                             versus

        PRINCIPAL COMMISSIONER OF INCOME TAX-21 & OTHERS
                                                  ..... Respondents
                     Through      Mr. Zoheb Hossain, Sr. Standing
                     Counsel for the Revenue.

        CORAM:
        HON'BLE MR. JUSTICE SANJIV KHANNA
        HON'BLE MS. JUSTICE PRATHIBA M. SINGH


SANJIV KHANNA, J.:

        The writ petitioner, an advocate by profession and a professed
income-tax practitioner, has filed the present writ petition strafed by
intimation F No. Pr. CIT/Delhi-21/2017-18/619 dated 28th June, 2017 of the
Principal Commissioner of Income Tax, Delhi-21 rejecting his application
dated 31st March, 2017 under the Pradhan Mantri Garib Kalyan Yojna,
2016 (PMGK Scheme, for short).
2.      Rejection of the declaration under the PMGK Scheme, implies that
the petitioner would forgo or forfeit without refund Rs.34,48,954/- deposited

W.P. (C) No. 6312/2017                                                Page 1 of 32
as tax, surcharge and penalty. Similarly Rs. 60,11,500/- deposited by the
petitioner as Pradhan Mantri Garib Kalyan Cess would be meaningless,
refundable without interest after 4 years.

3.      PMGK Scheme was notified in the Gazette of India dated 15 th
December, 2016 vide Taxation Laws (Second Amendment) Act, 2016
[Amendment Act, for short] as an aftermath and in wake of the
demonetization of Rs.500 and Rs.1000 currency notes, which had ceased to
be legal tender post midnight between 8th and 9th November, 2016.

4.      The petitioner, like many others, stuck with unaccounted demonetized
currency notes had thought that they could side-step adverse impact of
demonetization by offering for tax undisclosed cash deposited in bank
accounts as income for the current year, i.e. Financial Year 2016-17, at the
rate mentioned in Section 115BBE of 30% plus the applicable surcharge and
cess. The expectation was that they would pay normal incidence of tax and
escape the rigours of penalty and prosecution. This is a matter of common
knowledge of which judicial notice should be taken.

5.      The petitioner accepts and admits to having deposited substantial sum
of Rs.2,40,46,000/- in cash in Indian Overseas Bank, City Union Bank and
Punjab National Bank between 13th November, 2016 and 13th December,
2016. The petitioner had also deposited advance tax of Rs.85,50,000/- for
the Assessment Year 2017-18 on different dates between 1st December,
2016 and 15th December, 2016 i.e. on or before introduction of PMGK
Scheme vide Amendment Act on 15th December, 2016.

6.      The Amendment Act was enacted with a definitive purpose and
objective to suppress and stifle such deception and prevent misuse of the
W.P. (C) No. 6312/2017                                              Page 2 of 32
existing provisions by suitable substitutions and insertions of Sections
115BBE, 271AAB and 271AAC to the Income Tax Act, 1961 (Act, for
short) prescribing higher rate of tax at 60%, surcharge of 25% on tax, and
applicable cess. Thereby effective rate of tax on such deposits covered by
section 115BBE was increased to 77.25% of the income referred to in
Section 68, 69, 69A, 69B, 69C and 69D of the Act. In addition penalty of
10% could also be imposed.

7.      To understand the impact and effect of the amendments made we
would reproduce Sections 115BBE and 271AAC of the Act, which read as
under:-

           "(1) Where the total income of an assessee,--
             (a) includes any income referred to in section 68, section 69,
                 section 69A, section 69B, section 69C or section 69D and
                 reflected in the return of income furnished under section 139; or
                    (b) determined by the Assessing Officer includes any income
                    referred to in section 68, section 69, section 69A, section 69B,
                    section 69C or section 69D, if such income is not covered under
                    clause (a),
                    the income-tax payable shall be the aggregate of--
              (i)          the amount of income-tax calculated on the income
                    referred to in clause (a) and clause (b), at the rate of sixty per
                    cent.; and
              (ii)     the amount of income-tax with which the assessee would
                 have been chargeable had his total income been reduced by the
                 amount of income referred to in clause (i)."
                    XXX
                    "271AAC. (1) The Assessing Officer may, notwithstanding
                    anything contained in this Act other than the provisions of
W.P. (C) No. 6312/2017                                                      Page 3 of 32
                 section 271AAB, direct that, in a case where the income
                 determined includes any income referred to in section 68,
                 section 69, section 69A, section 69B, section 69C or section
                 69D for any previous year, the assessee shall pay by way of
                 penalty, in addition to tax payable under section 115BBE, a
                 sum computed at the rate of ten per cent. of the tax payable
                 under clause (i) of sub-section (1) of section 115BBE:
                 Provided that no penalty shall be levied in respect of income
                 referred to in section 68, section 69, section 69A, section 69B,
                 section 69C or section 69D to the extent such income has been
                 included by the assessee in the return of income furnished
                 under section 139 and the tax in accordance with the provisions
                 of clause (i) of sub-section (1) of section 115BBE has been paid
                 on or before the end of the relevant previous year.
                 (2) No penalty under the provisions of section 270A shall be
                 imposed upon the assessee in respect of the income referred to
                 in sub-section (1).
                 (3) The provisions of sections 274 and 275 shall, as far as may
                 be, apply in relation to the penalty referred to in this section."


        For the purpose of the present decision, as it is not a search case, we
need not refer to Section 271AAB of the Act.

8.      Section 115BBE of the Act provides that where the total income
declared by an assessee in his return includes income referred to in Sections,
68, 69, 69A, 69B, 69C & 69D, or is determined by the Assessing Officer to
include such income, the assessee would be liable to pay tax at the rate of
60% on such income. In other words, such assessee would not get benefit of
the lower rate of tax earlier prescribed. Under Section 271AAC, Assessing
Officer is entitled to levy penalty of 10% of the tax payable under Section
115BBE(1)(i) in addition to the tax already payable under Section 115BBE.
W.P. (C) No. 6312/2017                                                   Page 4 of 32
This penalty is not payable where the assessee has declared such income
referred to in Sections, 68, 69, 69A, 69B, 69C & 69D in his return of income
furnished under Section 139 of the Act and has paid tax in accordance with
Section 115BBE(1)(i) of the Act on or before end of the relevant previous
year.

9.      Amendment Act had also omitted the figures/letters 115BBE in the
third proviso in Chapter II, in Section 2(9) of the Finance Act and inserted
Seventh proviso to the said Sub-Section for imposition of surcharge @25%
on the tax. Seventh proviso to Section 2(9) of the Finance Act, reads ;-

         "Provided also that in respect of any income chargeable to tax under
        clause (i) of sub-section (1) of Section 115BBE of the Income-tax
        Act, the "advance tax" computed under the first proviso shall be
        increased by a surcharge, for the purposes of the Union, calculated at
        the rate of twenty-five per cent of such advance tax;"

        Thus, an assessee was also liable to pay surcharge @ 25% on tax on
the income chargeable to tax under clause (i) of Section 115BBE (1) of the
Act in addition to 60% tax. In addition cess under Sub-sections (11) and
(12) to Section 2 of the Finance act of 2% and 1% of the income tax and
surcharge was also payable.

10.     Amendment Act also introduced PMGK Scheme by adding Chapter
IXA to the Finance Act, 2016 (Finance Act) with the heading `Taxation and
Investment Regime for Pradhan Mantri Garib Kalyan Yojna, 2016 , albeit as
a second option for the delinquent assessee. We begin by reproducing
Sections 199A to 199G of the Finance Act enacted and introduced by the
Amendment Act, which read:-

W.P. (C) No. 6312/2017                                              Page 5 of 32
             "199A. (1) This Scheme may be called the Taxation and
             Investment Regime for Pradhan Mantri Garib Kalyan Yojana,
             2016.
             (2) It shall come into force on such date as the Central Government
             may, by notification, in the Official Gazette, appoint.

             199B. In this Scheme, unless the context otherwise requires,-
             (a) "declarant" means a person making the declaration under sub-
             section (1) of section 199C;
             (b) "Income-tax Act" means the Income-tax Act, 1961;
             (c) "Pradhan Mantri Garib Kalyan Deposit Scheme, 20 16"
             (hereinafter in this Chapter referred to as "the Deposit Scheme")
             means a scheme notified by the Central Government in
             consultation with the Reserve Bank of India in the
             Official Gazette; and
             (d) all other words and expressions used in this Scheme but not
             defined and defined in the Income-tax Act shall have the meanings
             respectively assigned to them in that Act.

             199C. (1) Subject to the provisions of this Scheme, any person
             may make, on or after the date of commencement of this Scheme
             but on or before a date to be notified by the Central Government in
             the Official Gazette, a declaration in respect of any
             income, in the form of cash or deposit in au account maintained by
             the person with a specified entity, chargeable to tax under the
             Income-tax Act for any assessment year commencing on or before
             the 1st day of April, 2017.
             (2) No deduction in respect of any expenditure or allowance or set-
             off of any loss shall be allowed against the income in respect of
             which a declaration under sub-section (1) is made.

             Explanation.- For the purposes of this section, "specified entity"
             shall mean-
             (i) the Reserve Bank of India;
             (ii) any banking company or co-operative bank, to which the
             Banking Regulation Act, 1949 applies (including any bank or
             banking institution referred to in section 51 of that Act);
             (iii) any Head Post Office or Sub-Post Office; and

W.P. (C) No. 6312/2017                                                Page 6 of 32
             (iv) any other entity as may be notified by the Central Government
             in the Official Gazette in this behalf.

             199D. (1) Notwithstanding anything contained in the Income-tax
             Act or in any Finance Act, the undisclosed income declared under
             sub-section (1) of section 199C within the time specified therein
             shall be chargeable to tax at the rate of thirty per cent. of the
             undisclosed income.
             (2) The amount of tax chargeable under sub-section (1) shall be
             increased by a surcharge, for the purposes of the Union, to be
             called the Pradhan Mantri Garib Kalyan Cess calculated at the rate
             of thirty-three per cent. of such tax so as to fulfil the commitment
             of the Government for the welfare of the economically weaker
             sections of the society.

             199E. Notwithstanding anything contained in the Income-tax Act
             or in any Finance Act, the person making a declaration under sub-
             section (1) of section 199C shall, in addition to tax and surcharge
             charged under section 199D, be liable to pay penalty at the rate of
             ten per cent. of the undisclosed income.

             199F. (1) Notwithstanding anything contained in the Income-tax
             Act or in any other law for the time being in force, the person
             making a declaration under sub-section (1) of section 199C, shall
             deposit an amount which shall not be less than twenty-five per
             cent. of the undisclosed income in the Pradhan Mantri Garib
             Kalyan Deposit Scheme, 2016.

             (2) The deposit shall bear no interest and the amount deposited
             shall be allowed to be withdrawn after four years from the date of
             deposit and shall also fulfil such other conditions as may be
             specified in the Pradhan Mantri Garib Kalyan Deposit Scheme,
             2016.

             199G. (1) A declaration under sub-section (I) of section 199C shall
             be made by a person competent to verify the return of income
             under section 140 of the Income-tax Act, to the Principal
             Commissioner or the Commissioner notified in the Official

W.P. (C) No. 6312/2017                                                 Page 7 of 32
             Gazette for this purpose and shall be in such form and verified in
             such manner, as may be prescribed."

         Any person could make a declaration under the PMGK Scheme in the
form prescribed on or before the first day of April, 2017 in respect of any
income in the form of cash or deposit in an account maintained by the
person chargeable to tax under the Act for any assessment year commencing
on or before 1st day of April, 2017.       Declaration was to be made to the
Principal Commissioner or the Commissioner notified in the Official
Gazette and the form could be signed by the person competent to verify the
return of income under Section 140 of the Act.      No deduction in respect of
any expenditure, allowance or set-off of any loss was allowed. As per Sub-
section (1) to Section 199D tax at the rate of 30% was chargeable on the
undisclosed income.       In addition, as per Sub-section (2) to Section 199D,
the declarant was liable to pay 33% of such tax as surcharge called Pradhan
Mantri Garib Kalyan Cess so as to fulfil the commitment of the Government
for welfare of the economically weaker sections of the society. Further, as
per Section 199E, in addition to tax of 30% and the cess equal to 33% of the
tax, the declarant was liable to pay penalty @10% on the undisclosed
income.        In other words, the total amount of tax, surcharge and penalty
payable on the undisclosed income was 49.90 per cent.              Lastly, the
declarant under sub-section (1) to Section 199F was to deposit 25% of the
undisclosed income under Pradhan Mantri Garib Kalyan Yojna, 2016 and
comply with the conditions specified in the PMGKY Scheme. The deposits
made were to earn no interest and could be withdrawn only after four years.
Sections 199D and 199E imposing payment of tax @ 30% and surcharge @
33% of the tax payable and penalty of 10% began and were conferred with
W.P. (C) No. 6312/2017                                               Page 8 of 32
non obstante primacy to override anything to the contrary contained in the
Acts i.e. the Income-tax Act or the Finance Act.

11.     Sections 199H, 199I, 199K and 199M are relevant and, therefore, are
being reproduced below:-

            "199H. (1) The tax and surcharge payable under section 199D and
            penalty payable under section 199E in respect of the undisclosed
            income, shall be paid before filing of declaration under sub-section
            (1) of section 199C.
            (2) The amount referred to in sub-section (1) of section 199F shall
            be deposited before the filing of declaration under sub-section (1)
            of section 199C.
            (3) The declaration under sub-section (1) of section 199C shall be
            accompanied by the proof of deposit referred to in sub-section (1)
            of section 199F, payment of tax, surcharge and penalty under
            section 199D and section 199E, respectively.
            199-I. The amount of undisclosed income declared in accordance
            with sub-section (1) of section 199C shall not be included in the
            total income of the declarant for any assessment year under the
            Income-tax Act.
            199K. Any amount of tax and surcharge paid under section 199D
            or penalty paid under section 199E shall not be refundable.
            199M. Notwithstanding anything contained in this Scheme, where
            a declaration has been made by misrepresentation or suppression of
            facts or without payment of tax and surcharge under section 199D
            or penalty under section 199E or without depositing the amount in
            the Deposit Scheme as per the provisions of section 199F, such
            declaration shall be void and shall be deemed never to have been
            made under this Scheme."
        As per Section 199H of the Finance Act, tax and surcharge payable
under Section 199D, and penalty payable under Sections 199E had to be

W.P. (C) No. 6312/2017                                                Page 9 of 32
paid before filing of the declaration. Deposit in the Deposit Scheme was also
to be made before filing the declaration. Every declaration as per mandate
of Sub-section 3 to Section 199H was required to be accompanied with
proof of payment of tax, surcharge and penalty and proof of deposit under
the Deposit Scheme. As per Section 199-I the amount of undisclosed income
declared was not to be included in the total income of the declarant for any
assessment year. In terms of Section 199K, no amount of tax and surcharge
paid under Section 199D and penalty paid under Section 199E was
refundable. Section 199M states that where a declaration has been made by
misrepresentation or suppression of facts or without payment of tax,
surcharge and penalty or without depositing the amount in the Deposit
Scheme, such declaration shall be treated as void and shall be deemed to
have never been made under the Scheme.






12.     A reading of the aforesaid provisions introduced and enacted vide the
Amendment Act, would indicate that the guilty and remiss assessees had
two separate and distinct options. They could declare unaccounted cash
deposited in the bank accounts in the return of income filed under section
139 of the Act and pay tax, surcharge and cess as per Section 115BBE of the
Act and Section 2 of the Finance Act post amendment at the effective rate of
tax of 77.25%. Penalty @ 10% under the Section 271AAC could be
imposed by the assessing officer on conditions being satisfied. Alternatively,
the assessees could as a second option file a declaration under Section 199C,
which would require them to deposit tax at the rate of 30%, surcharge at the
rate of 33% on tax deposited and penalty of 10% on the undisclosed income
i.e. total of 49.9%. In addition the declarants were required to deposit 25%

W.P. (C) No. 6312/2017                                              Page 10 of 32
of the undisclosed income as per Sub-section (1) to Section 199F for a
period of four years under the Deposit Scheme, to be repaid without interest.

13.     Obviously the intention was to tax persons or assessees, who had tried
to circumvent and minimize consequences of demonetization by depositing
advance tax on the unaccounted for cash in the bank accounts, as a separate
class to be taxed differently. Such assessees could opt for the PMGK
Scheme by paying tax, surcharge and penalty under Sections 199D and
199E and deposit under Section 199F of the Finance Act, and thereafter seek
refund of the advance tax paid in accordance with law. PMGK scheme did
not envisage adjustment or credit of advance tax paid as tax, surcharge and
penalty paid under the PMGK Scheme.

14.     Distinction between the two options, real or effective rate of taxation
under the two options and the manner in which more beneficial PMGK
Scheme option could be exercised, appears to be clear and apparent with
benefit of hindsight and on in-depth and intricate interpretative examination.
However, facts of the present case exposit confusion and uncertainty that
had prevailed for the difference between the two options and the manner in
which PMGK option could be exercised was not appreciated and understood
by the petitioner and even by the enforcers i.e. tax authorities. This has
resulted and is the cause of the present litigation. It is important, at this
stage, to refer to the facts.

15.     In the evening of 24th March, 2017 a team of income tax officers from
Range-61, being aware of the cash deposits made by the petitioner had
visited his office at Laxmi Nagar, Delhi. As the petitioner had by then left
his office, he was followed and traced at his colleague's office in Safdarjang
W.P. (C) No. 6312/2017                                               Page 11 of 32
Enclave. The petitioner was asked to give details of his PAN, sources of
income, bank accounts etc. and his statement under Section 131 of the Act
was partly recorded at Safdarjang Enclave and continued at the office of the
petitioner at Laxmi Nagar till 3.a.m. on 25.3.2017. Relevant portion of the
statement reads:-


             "Q.16. Please explain the source of cash deposit of
             Rs.2,40,46,000/- in your different bank accounts after
             demonetization.

             A.17     Actually, the cash deposited indifferent bank accounts
             are my uncounted (sic) cash income which were deposited before
             the announcement of scheme PMGKY, 2016. Hence, I had no
             option except declare amount as my professional receipts, hence I
             deposited advance tax also at this income.

             Q.17.       Now what do you want to say?

             A.17.     Since cash deposit of Rs.2,40,46,000/- is my uncounted
             (sic) income, hence I would like to declare this income under the
             scheme PMGKY, 2016 with request to adjust the advance tax
             amount with this scheme which is approx Rs. 1 crore which I have
             already deposited.


             Q.19.       Do you want to say anything else?

             A.19.    Nothing specific once again, I repeat cash deposited of
             Rs.2,40,46,000/- is my uncounted (sic) income and I surrender the
             same in PMGKY, 2016 for the guarantee of the same. I am
             submitting the following mentioned post dated cheques.
            Sr. Cheque Bank                   A/c no.         Amount
            No. No.

W.P. (C) No. 6312/2017                                               Page 12 of 32
            1.     001475   City Union Bank 208001000627453      1,19,98,954/-
                            Ltd, Janakpuri

            2.     001476   Do               Do                  60,11,500/-

                                                                  "
                Though I have given the above two cheques for the total
             amount but on the amount of Rs.2,40,46,000/- I have deposited the
             advance tax to approx Rs. 1 crore and request to allow the credit of
             the same for the scheme."

        Thus, the petitioner had confirmed having deposited Rs.2,40,46,000/-
in demonetized notes in cash in           his bank accounts and having paid
Rs.1,00,00,000 approximately as advance tax with the intent to declare
unaccounted money as income in his income return for the current year.
Notwithstanding payment of advance tax, the petitioner had issued cheques
of Rs.1,19,98,954 and Rs.60,11,500/- towards 49.90% payable as tax,
surcharge and penalty and 25% to be deposited in the Bond Ledger Account.
The cheques were handed over and accepted by the officers. As per the
petitioner, he was told and directed by the officers to make declaration under
the PMGK scheme and pay taxes, surcharge etc. under the said scheme.
Petitioner had requested or rather pleaded that he should be given credit of
the advance tax and the same should be treated as tax paid under the PGMK
scheme. Officers did not inform and state that this was impermissible.

16.     Petitioner professes that as directed he had visited the office of the
second respondent, namely, Income Tax Officer, Ward-61 (3) on 27th
March, 2017 and was then supplied certified copy of his statement. The
petitioner thereafter wrote letter dated 29th March, 2017 to the Assessing
Officer requesting that he should be extended credit of advance tax of

W.P. (C) No. 6312/2017                                                  Page 13 of 32
Rs.85,50,000/- deposited in the month of December, 2016, as deposit under
PMGK Scheme. Copy of the said letter was also forwarded to the Principal
Commissioner of Income Tax-21 with a request to the said authority to
resolve the issue as the PMGK Scheme was going to close on 31st March,
2017. In the letter dated 29th March, 2017 addressed to the Income-tax
Officer, Ward No.61(3), the petitioner had referred to his predicament and
had requested for guidance in the following words:

           "On 24.3.2017, the team of officers of Income Tax Department
           visited my office at G-19, 2nd Floor, Vijay Chowk, Laxmi Nagar,
           Delhi-110092 and as well as office of my colleague at A-142, GF,
           S.J. Enclave, New Delhi-110029. During that visit, my statement
           was recorded and I was suggested to declare that income under
           PMGKY Scheme, 2016. As per that scheme, tax, cess and penalty
           makeup to 49.9% and declarant is also required to deposit 25% of
           the declared amount in separate Bank account in the shape of F.D.
           which is to remain locked up for four years without bearing interest
           thereon. To this applicant agreed and filed the Declaration also in
           Form h. However, during the course of proceedings, the applicant
           asked for giving credit of amount of tax to the tune of Rs.85.5 Lakhs
           out of the total 49.9% which is required to be deposited by
           31.03.2017. Once the amount of Rs.85.5 Lakhs is adjusted, the
           applicant would be required to deposit differential amount which
           works out to be Rs. 34,48,954/-. In the event, this proposal is not
           acceptable then the applicant would have to deposit 49.9% of the
           declared amount which is not only huge, double taxation but is also
           practically impossible to comply at this fag end of the closer of this
           scheme. For this purpose when the applicant appeared before your
           good self on 27.3.2017 and reiterated that this much accommodation
           be extended to him and he be allowed the credit of sum deposited
           prior to 17.12.2016. On 28.3.2017 also, the applicant visited your
           office making same request which you had considered
W.P. (C) No. 6312/2017                                                 Page 14 of 32
           sympathetically with an assurance that the matter would be put-up
           for consideration before the Ld.CIT.

                Madam, you would appreciate that each passing day, the
           window to deposit the amount is going to close soon and given the
           practical difficulty, the applicant is in no position to deposit this
           huge amount of Rs.1,19,98,954/- after deposit of Rs.85.5 Lakhs in
           December, 2016. The applicant will left with no choice but to
           withdraw his declaration in case credit of Advance Tax deposited
           before 17.12.2016 not extended to him. It is relevant to mention
           here that this fresh deposit of Rs.1,19,98,954/- would tantamount to
           double taxation which is not permissible in law."

17.     The petitioner thereafter wrote letter dated 31st March, 2017. This
letter is detailed one and refers to antecedent facts and meeting of the
petitioner with the Joint/Additional CIT, Range-61 on 28th March, 2017,
when his case was discussed.         The petitioner was required to visit the
Assessing Officer on the next day. Faithfully, on 29th March, 2017 the
petitioner met the Assessing Officer and submitted another letter. On the
same day he had a meeting with Joint/Additional CIT, Range-62, and was
asked to come again on 30th March, 2017 at about 11.30 A.M. On 30th
March, 2017, the petitioner had once again visited the office of the
Joint/Additional CIT, Range-62 and had pointed out difficulties in case the
petitioner was asked to deposit full amount of Rs.1,19,98,954/- under the
PMGK Scheme, as he had already deposited Rs.85,50,000/- as advance tax
on or before 15th December, 2016. It was highlighted that Rs.85,50,000/-
was deposited before the PMGK Scheme was notified. In the letter dated
31st March, 2017 written to the Principal Commissioner of Income-tax,
Range 21, the petitioner had stated as under:-

W.P. (C) No. 6312/2017                                                Page 15 of 32
             "6. Thereafter, a summon under section 131 of Income Tax Act
             1961 was issued on 25.03.2017 to appear before the Assessing
             Officer on 27.03.2017. Applicant had appeared on 27.03.2017 but
             because of your goodself being pre-occupied, he could not get
             audience. On 28.03.2017 the applicant again visited the office
             when he had the occasion to meet Shri Farhat Khan, Join / Addl.
             CIT, Range-61. He explained that he had already discussed the
             case with your goodself and issue would be resolved soon. The
             applicant was asked to visit the office of the Assessing Officer on
             the next day who will arrange a meeting with your good self.
             Appreciating the concern raised and given the fact that hardly 3
             days are left when the Scheme is going to close, the Joint / Addl.
             CIT, assured that all efforts would be made to resolve this issue.

             7. On the next day, i.e. 29.03.2017, applicant met the Assessing
             Officer and filed a letter with a copy marked to your goodself. The
             Assessing Officer as per your instructions arranged a meeting with
             Shri Vijay Choudhary Joint / Addl. CIT, Range-62 as Shri Farhat
             Khan was on leave. Shri Choudhary asked the applicant to come
             again on 30.03.2017 around 11.30 A.M. as he was hopeful that the
             matter would be resolved in a positive way.

             8. On 30.03.2017, the applicant again visited the office of the
             Assessing Officer as well as of Shri Vijay Choudhary, Joint / Addl.
             CIT, Range-62. After meeting him, the Joint / Addl. CIT was kind
             enough to appreciate the difficulty faced by the applicant if he is
             once again asked to deposit the entire amount of Rs.1,19,98,954/-
             when he had already deposited Rs.85,50,000/- on or before
             15.12.2016. The Joint / Addl. CIT was also of the opinion that the
             applicant cannot be taxed twice on the same income. He also
             appreciated that when the tax of Rs.85,50,000/- was deposited, the
             Scheme had not been notified and when it has been notified and
             the applicant on being asked, has agreed to file the declaration,


W.P. (C) No. 6312/2017                                                Page 16 of 32
             then he should not be made to suffer for no fault of his own as he
             has deposited the entire amount of tax, surcharge and cess.

             9. Resultantly, understanding the concern of the applicant, the
             Joint / Addl. CIT asked the applicant to deposit the differential
             amount of tax which works out to be Rs.34,48,954/-. This was
             deposited immediately on 30.03.2017 for which photocopy of
             challan is enclosed. So far as 25% of the declared income is
             concerned i.e. Rs.60,11,500/-, it may please be taken on record that
             a separate Bond Ledger Account had already been opened in the
             Indian Overseas Bank, Janakpuri, New Delhi vide Bond
             Ledger/Application Receipt No. IOB 054400000250 Dated
             31.03.2017. The same has been issued and the photocopy of
             which is enclosed for your ready reference and necessary
             compliance in the matter. It is also submitted that Rs.60,11,500/-
             debited to my Bank Account today.

             10.All this is being stated to demonstrate that the applicant has
             taken all necessary steps as told to him in all the meetings which
             took place between 24.03.2017 to 30.03.2017.

                You are therefore, requested to take these documents, challans,
             annexure, Bond Ledger Account / application receipt etc. on
             record as compliance of the applicant towards the Scheme and
             issue the declaration in Form No.2 as is envisaged under the
             Scheme.

             For this act of your goodself, the applicant will be deeply obliged.

             As in duty bound applicant prays accordingly."

        Thus, the petitioner in letter dated 31st March, 2017 had referred to
extensive previous discussions and understanding with the officers on tax to
be paid under the PMGK Scheme. Accordingly, the petitioner had paid and
enclosed Form No.1 challan for deposit of Rs.34,48,954/- towards tax,

W.P. (C) No. 6312/2017                                                  Page 17 of 32
surcharge and penalty, and receipt for deposit of Rs.60,11,500/- in a separate
Bond Ledger Account under the PMGK Scheme.

18.     No reply or answer to the letters was received. On the other hand, on
31 March, 2016 the Principal Commissioner accepted the said Form and
challans, which were not returned or rejected on the ground that the
petitioner had not paid and deposited full amount of Rs.1,19,98,954/-
towards tax, surcharge and penalty and had made part deposit of
Rs.34,48,954/-. It took the respondents nearly three months to discuss and
examine the case as vide letter dated 28th August, 2017, the declaration
made by the petitioner was rejected recording as under:-

                "In this regard, It is communicated that your application dated
             31.03.2017 regarding giving the credit of Advance Tax paid of
             Rs. 85,50,000/- (paid before the implementation of PMGKY-2016
             Scheme which was effective from 17.12.2016) was forwarded to
             the Pr. Chief Commissioner of Income Tax, Delhi for directions /
             clarifications.
                In response to this letter, the clarification has been received
             from 0/o Pr. CCIT, Delhi vide letter F. No. Joint CIT(Hq) (Co-
             ord)/PMGKY/2017- 18/3143 dated 05.06.2017 which is requoted
             as under:

                         "No credit for advance tax paid, TDS or TCS shall be
                         allowed under the Scheme."

                         It is further communicated that the said clarification is in
                         reference of clarification on the taxation and investment
                         regime for the Pradhan Mantri Garib Kalyan Yojana, 2016
                         issued by the Board vide circular no. 2 F. No. 142/33/2016-
                         TPL(Part) dated 18.01.2017 (copy enclosed).

                         In view of the above clarification, your application filed
                         under PMGKY -2016 is hereby rejected."
W.P. (C) No. 6312/2017                                                     Page 18 of 32
        This communication accepts that the issue regarding credit of advance
tax of Rs.85,50,000/- paid before implementation of the PMGK Scheme had
been forwarded to the Principal Chief Commissioner for directions and
clarifications. Response received on 5th June, 2017 had opined that credit of
advance tax paid, TDS or TCS was not to be allowed under the PMGK
Scheme. In other words in view of the said clarification, the petitioners
declaration was rejected.

19.     The petitioner submits that he should be given credit of the advance
tax of Rs.85,50,000/- under the PMGK Scheme. He has relied on judgment
of this Court in Kumudam Publications Pvt. Ltd. Acting Through Its
Managing Director Mr. P. Varadarajan Vs. Central Board of Direct Taxes
and Ors., (2017) 393 ITR 599 (Del). The petitioner and the tax officers had
understood that the ratio declared would equally apply to Rs.85,50,000/-
paid by the Petitioner as advance tax.

20.     Kumudam Publications Pvt. Ltd.(supra) holds that the assessee or
declarant under the Income Disclosure Scheme, 2016 was entitled to credit
of advance tax deposited relating to the assessment years or periods for
which the assessee seeks benefit under the said scheme. Contention of the
Revenue that the Income Disclosure Scheme was self-contained and a
complete code and, therefore, provisions relating to advance tax and credit
thereof were in-applicable was rejected in this decision. Judgment had
commented on the language of the Income Disclosure Scheme, for unlike
Kar Vivad Samadhan Scheme, 1998, the former scheme did not

W.P. (C) No. 6312/2017                                             Page 19 of 32
debar/prohibit adjustment or credit of the amounts paid in the past.
Contextually, it was observed that the basis of the two schemes were
different. It was held as under:-

             "15. Does the expression (the) "tax and surcharge payable under
             section 184 and penalty payable under section 185 in respect of the
             undisclosed income, shall be paid on or before a date to be notified
             by the Central Government in the Official Gazette" mean only
             amounts paid immediately prior to the declaration count, thus
             precluding any amounts paid for the relative or corresponding
             period, or does it include all such payments? Thereby hangs a tale.
             In the opinion of this court, there is no bar, express or implied,
             which precludes the reckoning or taking into account of previously
             paid amounts which have nexus with the periods sought to be
             covered by the scheme.
             16. Granted, such schemes are to be seen as containing special
             dispensations, etc and interpreted in a "stand alone" or sui generis
             manner. Equally, those who seek its benefits are to go by it. But
             there should be something which provides a clear insight that
             Parliament wished that such past amounts are not to be reckoned at
             all, for purposes of payments. 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. They are not limited in their
             meaning to only what is paid immediately before, or in the
             proximity of the declaration filed.
             17. The provision of Section 182 itself states that for the purposes
             of the IDS, undefined terms and expressions shall be in terms of
             the Income Tax Act, by incorporating those into the Finance Act
             and the scheme. "Undisclosed income" which is the foundational
             provision to be invoked by declarants, thus is based on the
             definition under the Income Tax Act (Section 132 (1) (c)) the
             provision reading as to include "money, bullion, jewellery or other
             valuable article or thing and such money, bullion, jewellery or
             other valuable article or thing represents either wholly or partly
             income or property [which has not been, or would not be,
W.P. (C) No. 6312/2017                                                 Page 20 of 32
             disclosed] for the purposes of the Indian Income-tax Act, 1922 (11
             of 1922), or this Act (hereinafter in this section referred to as the
             undisclosed income or property)". Undisclosed income is also
             defined in Section 158B (for the purposes of the chapter in which
             that provision is located) and Section 271 (for the purposes of that
             section). That apart, the only bar discernable under the scheme in
             question is evident from Section 189 is that no person declaring
             under the Act shall not be entitled to "claim any set off or relief in
             any appeal, reference or other proceeding in relation to any such
             assessment or reassessment." Also, under that provision the person
             so declaring shall not be entitled to " to re-open any assessment or
             reassessment made under the Income-tax Act or the Wealth tax
             Act, 1957 (27 of 1957)". Therefore, the court is of the opinion that
             there is no bar for an assessee or declarant to claim credit of
             advance tax amounts paid previously relative to the assessment
             years or periods for which it seeks benefits under the scheme. This
             interpretation is in no way inconsonant with the ratio of the
             Supreme Court's rulings, relied upon by the Revenue.
             18. The decision in Shelly (supra) is decisive that advance tax is a
             mode of tax recovery, which the assessee is bound to pay under the
             scheme of the Income Tax Act. The court, after considering
             Section 140A, Section 4, Section 139 and Section 240 of the
             Income tax Act, observed as follows:
                 "Section 4 of the Act creates the charge and provides inter alia
                 for payment of tax in advance or deduction of tax at source.
                 The Act provides for the manner in which advance tax is to be
                 paid and penalises any assessee who makes a default or delays
                 payment thereof. Similarly the deduction of tax at source is also
                 provided for in the Act and failure to comply with the
                 provisions attracts the penal provisions against the person
                 responsible for making the payment. It is, therefore, quite
                 apparent that the Act itself provides for payment of tax in this
                 manner by the assessee. The Act also enjoins upon the assessee
                 the duty to file a return of income disclosing his true income.
                 On the basis of the income so disclosed, the assessee is required
                 to make a self-assessment and to compute the tax payable on
                 such income and to pay the same in the manner provided by the
W.P. (C) No. 6312/2017                                                   Page 21 of 32
                 Act. Thus the filing of return and the payment of tax thereon
                 computed at the prescribed rates amounts to an admission of tax
                 liability which the assessee admits to have incurred in
                 accordance with the provisions of the Finance Act and the
                 Income Tax Act. Both the quantum of tax payable and its mode
                 of recovery are authorized by law. The liability to pay income
                 tax chargeable under Section 4 (1) of the Act thus, does not
                 depend on the assessment being made. As soon as the Finance
                 Act prescribes the rate or rates for any assessment year, the
                 liability to pay the tax arises. The assessee is himself required
                 to compute his total income and pay the income tax thereon
                 which involves a process of self-assessment."
             19. Furthermore, the court also is of the opinion that the
             clarification by the Revenue, that credit for TDS paid, can be
             enjoyed for availing the benefit (under the scheme in question)
             precludes any meaningful argument by it that advance tax
             payments relative for the assessment years covered by the
             declaration cannot be taken into consideration as payments under
             and for purposes of availing the benefits of the scheme."


21.     The petitioner relying upon the said decision had also drawn our
attention to the concept of advance tax as elucidated in Modi Industries Ltd.
Vs. CIT, (1995) 6 SCC 396. Reference was made to the judgment in Delhi
Chartered Accountants Society (Regd.) Vs. Union of India, (2013) 29 STR
461 (Del) on the question of taxable event or point of taxation and judgment
of the Supreme Court in Commissioner of Central Excise, Bolpur Vs.
Ratan Melting and Wire Industries, (2008) 231 ELT 22 (SC) on the effect
of the circulars issued by the department and Ahmed Ibrahim Sahigra
Dhoraji Vs. Commissioner of Wealth Tax, Gujarat, (1981) 3 SCC 77 on
the question of tax liability.



W.P. (C) No. 6312/2017                                                  Page 22 of 32
22.     Counsel for the Revenue, on the other hand, had submitted that the
PMGK Scheme was a complete and self contained code that had required
payment of full tax, surcharge and penalty and deposit under the Deposit
Scheme. PMGK Scheme did not envisage benefit of prior payment of taxes,
advance tax or the TDS.

23.     We are in agreement with the counsel for Revenue that the PMGK
Scheme in the form of Sections 199A to 199R is a self-contained complete
code. The scheme did not envisage grant of benefit or credit of advance tax
paid at any stage; before, during the pendency of the Scheme or thereafter.
Reliance placed by the petitioner on the judgment of this High Court in
Kumudam Publications Pvt. Ltd. (supra) is inappropriate. Revenue has
rightly pointed out that the scheme under consideration in the case of
Kumudam Publications Pvt. Ltd. (supra) had provided and allowed credit of
TDS, but had denied credit of advance tax. However, under the PMGK
Scheme, credit of neither TDS nor advance tax was postulated and
envisaged. Advance tax is treated as tax paid under the Act, whereas
undisclosed income declared under the PMGK scheme is not to be taxed
under the Act i.e. Income Tax Act. Section 199-I states that undisclosed
income was not to be treated as a part of the total income taxable under the
Act i.e. Income Tax Act. Provisions of the PMGK Scheme had created a new
and separate charge and had postulated payment of tax, surcharge, penalty
and requirement to make a deposit. We would be rewriting provisions of
Chapter IXA of the Finance Act if we direct grant of benefit of advance
tax paid under the Act i.e. the Income Tax Act for payment to be made
under PMGK scheme. The challans for payment under the Act and PMGK

W.P. (C) No. 6312/2017                                            Page 23 of 32
Scheme were separate. In Kumudam's case, as noticed above, there was an
anomaly and contradiction as benefit of TDS was available but credit of
advance tax was denied, though both were in nature of tax paid in advance.
Thus, the Division Bench had held that the distinction of TDS and advance
tax was congruous, as both were in the nature of pre-paid taxes. Further,
there was no express or implied provision that had precluded reckoning or
taking into account the previously paid amount. In view of the aforesaid
position, we would not accept the prayer of the petitioner to treat payment of
advance tax of Rs. 85,50,000/- as deposit of tax, surcharge and penalty
under Sections 199D and 199E of the Finance Act. Wide latitude is required
and available in matters relating to fiscal and economic regulations and
classification of objects, persons and things for the purpose of formulation
of taxation policy. Validity and vires of the statutory provisions is not under
challenge in the present writ petition. Interpretation of the provisions is in
question and examination.

24.     The effect of the above finding as per the Revenue is that Petitioner
would completely lose right to credit and benefit of Rs. 34,48,954/- under
PMGK Scheme. This amount would get forfeited without corresponding tax
benefit (Rs.60,11,500/-, though not clearly stated by the respondents, it
appears would be refunded after four years without interest). Petitioner
would be liable to pay 60% rate of tax as per the provisions of Section
115BBE amounting to Rs.1,44,27,600/- plus surcharge @ 25% on the tax of
Rs.36,06,900/- and cess of Rs.5,41,035. In other words, petitioner would
therefore land up paying tax, surcharge and cess of Rs.1,85,75,535/- towards
undisclosed income of Rs.2,40,46,000/- under Section 115BBE of the Act,

W.P. (C) No. 6312/2017                                               Page 24 of 32
and tax, surcharge and penalty of Rs. 34,48,954/- which as per the
respondents stands forfeited and deposit of Rs. 60,11,500/- under the
Deposit Scheme that would be possibly refunded without interest after four
years. We would now examine the said position and whether the petitioner
would be entitled to some benefit in view of the confusion and on
interpretation of the provisions.

25.     The writ petition exposits that notwithstanding economic complexities
and exceptional skills required for drafting tax provisions, it is imperative to
have simple and clear tax legislations on tax implications and procedures
which should be explicit and easily understood by commoners. The need
and advantage of having two schemes or options being a policy matter could
be beyond and outside the scope of judicial review. As recorded above
statutory provisions are not under challenge. Nevertheless as an adjudicator
we have to find a just, fair and equitable answer to the conundrum. The
petitioner must be penalised as a transgressor yet as long as the purpose
behind legislation is not incapacitated and impaired, the petitioner should
not be persecuted for the mistake in making the wrong choice when the
authorities were equally confounded. As an interpreter we need to believe
and accept as a principle that no legislation would like to penalise their
subjects for inoffensive and credulous mistakes given the complexities and
uncertainties that could prevail at the given point of time on interpretation,
provided the purpose and objective of the legislation is not sacrificed and
undermined. Legislations do not and cannot deal with all circumstances with
abstract symmetry. When interpretation and understanding of legal
provisions and applicability in a peculiar factual matrix was ambiguous and

W.P. (C) No. 6312/2017                                                Page 25 of 32
nebulous at the given point of time and confusion had prevailed, the Courts
should provide succour to the party who would suffer an infelicitous and
odious harm, subject to purpose of the legislation not being defeated and
subdued. In Shailesh Dhairyawan Vs. Mohan Balkrishna Lulla (2016) 3
SCC 619, referring to the principle of constructive interpretation or
construction, the Supreme Court observed that the court is supposed to
attach that meaning to the provision which serves the purpose behind the
provision and should ascertain what the provision is designed to accomplish.
This means examination of three components i.e. language, purpose and
discretion. Language though restrictive can reveal range of possibilities
given the semantic use. Therefore purpose is the core of the text. Within the
language which is designed to effectuate the purpose there is scope for the
court to exercise discretion. It is in this context we have interpreted PMGK
Scheme.

26.     In Parisons Agrotech (P) Ltd. v. Union of India, (2015) 9 SCC 657
after quoting and referring to R.K. Garg v. Union of India and Others,
(1981) 4 SCC 675, the Supreme Court had observed:-

             "The Court must always remember that ,,legislation is directed to
             practical problems, that the economic mechanism is highly
             sensitive and complex, that many problems are singular and
             contingent, that laws are not abstract propositions and do not relate
             to abstract units and are not to be measured by abstract symmetry;
             ,,that exact wisdom and nice adaption of remedy are not always
             possible and that ,,judgment is largely a prophecy based on
             meagre and uninterpreted experience. Every legislation
             particularly in economic matters is essentially empiric and it is
             based on experimentation or what one may call trial and error
             method and therefore it cannot provide for all possible situations or
             anticipate all possible abuses."
W.P. (C) No. 6312/2017                                                  Page 26 of 32
27.     On the question of confusion and doubt, respondents submit and rely
upon circular No.2 of 2017 issued by the Central Board of Direct Taxes
dated 18th January, 2017, wherein in response to question No.6, it was
clarified:

        "Question No. 6: Whether credit of advance tax paid, tax deducted
        at source (TDS), tax collected at source (TCS), in respect of an
        income declared under the Scheme would be available?

        Answer.     No credit for advance tax paid, TDS or TCS shall be
        allowed under the Scheme."


28.     In the present case we have rejected the petitioners contention tha t
the advance tax paid should be treated as payment under the PMGK
Scheme. The said circular in question No.9 had also dealt with the issue if a
person does not disclose his undisclosed income under PMGK Scheme,
whether the undisclosed deposit would attract tax under Section
115BBE.Question 11 had dealt with adjustment of cash seized during search
operations. Answer to question 9 and 11 and clarifications given to the
same circular are as under:






        "Question No. 9: If a person does not declare undisclosed cash
        deposited in an account between 01.04.2016 to 15.12.2016 under the
        Scheme, then whether such undisclosed deposit shall attract tax at the
        rate provided in the Taxation Laws (Second Amendment) Act, 2016?

        Answer:    The amended provisions of section 115BBE of the
        Income-tax Act, 1961 shall apply to A.Y.2017-18, relating to F.Y.
        2016-17. Hence, undisclosed deposits between 01.04.2016 to

W.P. (C) No. 6312/2017                                              Page 27 of 32
        15.12.2016 shall also attract tax at the rate provided in the Taxation
        Laws (Second Amendment) Act, 2016."

        XXX

         "Question No.11: Whether the cash seized during a search and
        seizure action of the Department and deposited in Public Deposit
        Account is allowed to be adjusted against the payments required to be
        made under the Scheme?

        Answer:      The adjustment of cash seized by the Department and
        deposited in the Public Deposit Account may be allowed to be
        adjusted for making payment of tax, surcharge and penalty under the
        Scheme on the request of the person from whom the cash is seized.
        However, the said amount shall not be allowed to be adjusted for
        making deposits under the Pradhan Mantri Garib Kalyan Deposit
        Scheme."


        Thus, in case of seized cash/money deposit adjustment for payment of
tax, surcharge and penalty was permitted.

29.     Despite the circular, facts narrated in some detail do show that the
Amendment Act had equally puzzled and flummoxed the tax law enforcers
with whom the petitioner was in constant interaction and had sought
guidance and assistance. Tax officers certainly had failed to appreciate and
understand the difference between the two options and the procedure, and
have substantially contributed to the muddle. The petitioner we would
accept was prompted, if not clearly directed to file declaration and make
deposits as made under the PMGK Scheme as the right course and option.
Role of an assessing officer or the Income-tax authorities has been described
as that of solicitude to the public exchequer with the inbuilt fairness to the

W.P. (C) No. 6312/2017                                              Page 28 of 32
assessee. Respondents as tax authorities being law enforcers and having
acted as facilitators should have explicated doubts, when they had
counselled the petitioner to make taxes etc. under the PMGK Scheme. On
the question of official guidance and proprietary of the officers' conduct,
reference can be appropriately made to Lord Browne-Wilkinson in Regina
v. Inland Revenue Commissioners [1994] 1 WLR 334;-

        ,,...taxpayers frequently need to know the tax consequences of a
        transaction before carrying it through. To meet this need, the
        Revenue are prepared in certain circumstances to give advance
        assurances as to the tax repercussions of a transaction so that the
        parties can proceed with confidence. This practice is of the greatest
        benefit to taxpayers and it would not be in the public interest to
        discontinue it...... If the Revenue have made it known that in
        particular categories of transaction advance clearance can only be
        given effectively at a particular level and clearance is not obtained
        from that level, there is in my judgment no abuse of power if the
        Revenue seek to extract tax on a basis different from that contained in
        the assurance. If the taxpayer either knows or (by reason of Revenue
        circulars) ought to have known that a binding clearance can only be
        obtained in a particular way and a purported clearance has been
        obtained in a different way, there is nothing unfair if the Revenue say
        that the purported clearance (being to the knowledge of the taxpayer
        given without authority) is of no effect and does not bind them.

30.     In the present case we perceive that an equitable resolution is possible
on interpretation of the provisions without undermining the object and
purpose behind the Amendment Act. Thus while we have rejected the
argument that advance tax of Rs.85,50,000/- can treated as payment of tax,
surcharge and penalty under PMGK Scheme, we would hold that the
declaration made under PMGK Scheme should not have been entirely
W.P. (C) No. 6312/2017                                                Page 29 of 32
rejected in view of the peculiar and specific factual background in the
present case. We have given the aforesaid direction and finding keeping in
mind and being sensitive to the petitioner's predicament and adverse
consequences propounded by the respondents though the law enforcers were
equally responsible in the lapse occasioned.

31.     In the aforesaid factual matrix, we would direct as under:-


        (i)      Deposit of Rs.34,48,954/- will be treated as payment of tax,
                 surcharge and penalty under the PMGK Scheme in respect of
                 undisclosed income of Rs.69,11,731.46.          Rs.34,48,954/- is
                 49.9% of Rs.69,11,731.46.
        (ii)     In      respect    of   the   balance   undisclosed   income      of
                 Rs.1,71,34,268.54, the petitioner would take recourse to the
                 first option under Section 115BBE.          The petitioner would
                 accordingly pay tax @ 60% on the aforesaid amount under
                 Section 115BBE, surcharge @25% of the tax and cess as
                 applicable.       Rs.85,50,000/- paid as advance tax would be
                 counted.
        (iii)    The petitioner would be also liable to pay interest on the late
                 payment of taxes, surcharge, cess and late filing of return.
        (iv)     Rs.60,11,500/- deposited by the petitioner under Section 199F
                 of the Finance Act will be refunded to the petitioner without
                 interest after a period of four years in accordance with the
                 deposit scheme.



W.P. (C) No. 6312/2017                                                   Page 30 of 32
        We perceive and believe that by giving the aforesaid directions, we
have not interfered with the provisions of the Amendment Act. We have not
directed refund of Rs.34,48,954/-, which would be contrary to Section 199K
of the Finance Act. We have also not directed that the advance tax of
Rs.85,50,000/- paid by the petitioner should be treated as payment of tax,
surcharge and penalty under the PMGK Scheme, which as held above, is
impermissible. It is possible to argue that we have interfered with the
declaration made by the petitioner in terms of Sections 199A and 199C of
the Finance Act, but on the said aspect flexibility and tolerance can be
exercised as we would read the contents of the declaration alongwith and
harmoniously with the letters written by the petitioner quoted above.
Violation of Section 199M on account of misrepresentation or suppression
of facts in the declaration is not alleged. Requirement of Section 199M of
payment of tax, surcharge and penalty under Sections 199D and 199E is not
violated when we treat the declaration as valid in respect of undisclosed
income of Rs.69,11,731.46 on which tax, surcharge and penalty was paid.
For the balance undisclosed income of Rs.1,71,34,268.54 the petitioner must
exercise first option and pay 60% tax, 25% surcharge on tax and cess under
Section 115BBE read with Section 2(9) of the Finance Act. No provision
prohibits or bars an assessee, who had made true and correct disclosure, to
partly take benefit of the option under Section 115BBE and partly exercise
the second option in the form of declaration under PMGK Scheme. The
sections do not prohibit part declarations under both options, provided entire
undisclosed income has been accounted for in the declaration made under
PMGK Scheme and Section 115BBE. Such recourse to both or any option
was available to the petitioner on or after the Amendment Act was notified
W.P. (C) No. 6312/2017                                              Page 31 of 32
on 15th December, 2016. Of course, if the petitioner does not make payment
as stipulated under Section 115BBE and applicable surcharge in respect of
the aforesaid undisclosed income of Rs.1,71,34,268.54/-, it will be open to
the respondents to treat the declaration under PMGK Scheme as invalid or
void on the ground of misrepresentation or suppression of facts. Similarly if
subsequently the declaration is found to be bad on account of suppression of
facts or misrepresentation. In case tax, interest etc. are paid we believe a fair
minded assessing officer would not initiate penalty proceedings under
Section 271AAC of the Act. We have made these observations in view of
the facts and to stall another round of unnecessary litigation.

32.     In view of the aforesaid discussion and observations, the writ petition
is partly allowed in terms of directions in paragraph 31 above. There would
be no order as to costs.



                                                 (SANJIV KHANNA)
                                                     JUDGE




                                               (PRATHIBA M. SINGH)
                                                    JUDGE
MARCH 12th , 2018
NA/VKR /ssn




W.P. (C) No. 6312/2017                                                 Page 32 of 32

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