Referred Sections:
Section 183 of the Finance Act,
Section 193 of the FA,
Sections 183, 184, 185 of the FA,
section 139 of the Income-tax Act;
section 187 of the Act
Section 24 (4) of the PBPT Act
Section 190 of the PBPT Act
Section 132
Referred Cases / Judgments:
East India Commercial Communication Company Ltd. Calcutta v. The Collector of Customs, Calcutta AIR 1962 SC 1893,
Union of India v. Madhumilan Syntex Private Limited (1988) 3 SCC 348
Metal Forgings. v. Union of India (2003) 2 SCC 36,
C.B. Gautam v. Union of India (1993) 1 SCC 78.
Hemlatha Gargya v. CIT (2003) 259 ITR 1 (SC).
Hemalatha Gargya v. Commissioner of Income Tax (2003) 259 ITR 1 (SC).
Tanna & Modi v. CIT, Mumbai (2007) 7 SCC 434
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 1st August, 2019
Decided on: 21st August, 2019
+ W.P. (C) 6541/2017
ANKUSH JAIN ..... Petitioner
Through: Mr. Rakesh Tikku, Senior Advocate
with Mr. P. Roy Choudhary, Mr.
Lokesh Bhardwaj, Ms. Jyotsna Mehta
and Mr. Sushil Kumar Gupta,
Advocates.
versus
PR. COMMISSIONER OF INCOME TAX-4 ..... Respondent
Through: Ms. Maninder Acharya, ASG with
Mr. Zoheb Hossain, Senior Standing
Counsel for Revenue.
+ W.P. (C) 6543/2017
VAIBHAV JAIN ..... Petitioner
Through: Mr. Rakesh Tikku, Senior Advocate
with Mr. P. Roy Choudhary, Mr.
Lokesh Bhardwaj, Ms. Jyotsna Mehta
and Mr. Sushil Kumar Gupta,
Advocates.
versus
PR. COMMISSIONER OF INCOME TAX-4 ..... Respondent
Through: Ms. Maninder Acharya, ASG with
Mr. Zoheb Hossain, Senior Standing
Counsel for Revenue.
CORAM:
JUSTICE S. MURALIDHAR
JUSTICE TALWANT SINGH
W.P. (C) 6541/2017 & 6543 of 2017 Page 1 of 18
JUDGMENT
%
Dr. S. Muralidhar, J.:
1. These are two writ petitions arising out of a similar set of facts and are
being disposed of by this common judgment.
The issue
2. The short issue involved here is whether the Principal Commissioner of
Income Tax-4 (,,PCIT-4) was justified in passing the impugned order dated
9th June, 2017 under Section 183 of the Finance Act, 2016 (,,FA, 2016) in
respect of the Income Declaration Scheme, 2016 (,,IDS), holding the
declaration made by each of the Petitioners under the IDS to be void under
Section 193 of the FA, 2016 on the ground that it was made both by
misrepresenting and suppressing facts.
The IDS
3. The facts in brief are that, the IDS became operational in terms of
Chapter-IX of the FA, 2016 with effect from 1st June, 2016. The object of
the IDS was to encourage disclosure of hitherto undisclosed income and
payment of surcharge and penalty on such undisclosed income. This was
provided for in terms of Sections 183, 184, 185 of the FA, 2016. Section 183
(1) of the FA, 2016 reads as under:
"Declaration of undisclosed income.
183. (1) Subject to the provisions of this Scheme, any person
may make, on or after the date of commencement of this
Scheme but before a date to be notified by the Central
Government in the Official Gazette, a declaration in respect of
any income chargeable to tax under the Income-tax Act for any
W.P. (C) 6541/2017 & 6543 of 2017 Page 2 of 18
assessment year prior to the assessment year beginning on the
1st day of April, 2017-
(a) for which he has failed to furnish a return under section 139
of the Income-tax Act;
(b) which he has failed to disclose in a return of income
furnished by him under the Income-tax Act before the date of
commencement of this Scheme;
(c) which has escaped assessment by reason of the omission or
failure on the part of such person to furnish a return under the
Income-tax Act or to disclose fully and truly all material facts
necessary for the assessment or otherwise.
(2) Where the income chargeable to tax is declared in the form
of investment in any asset, the fair market value of such asset as
on the date of commencement of this Scheme shall be deemed
to be the undisclosed income for the purposes of subsection (1).
(3) The fair market value of any asset shall be determined in
such manner, as may be prescribed.
(4) No deduction in respect of any expenditure or allowance
shall be allowed against the income in respect of which
declaration under this section is made."
4. The declaration had to be made to the Principal Commissioner or the
Commissioner in Form-1 as per Rule 4 (1) of the Income Declaration
Scheme Rules, 2016 (,,IDS Rules, 2016). After the issuance of
acknowledgement in Form 2 that the declarant had paid the tax, surcharge
and penalty, the Principal Commissioner or the Commissioner had to grant
the declarant a Certificate in terms of Form-4. Rule 4 of the IDS Rules reads
as under:
W.P. (C) 6541/2017 & 6543 of 2017 Page 3 of 18
"Declaration of income or income in the form of investment in
any asset.
4. (1) A declaration of income or income in the form of
investment in any asset under section 183 shall be made in
Form-1.
(2) The declaration shall be furnished:
(a) electronically under digital signature; or
(b) through transmission of data in the form electronically
under electronic verification code; or
(c) in print form, to the concerned Principal Commissioner or
the Commissioner who has the jurisdiction over the declarant.
(3) The Principal Commissioner or the Commissioner shall
issue an acknowledgement in Form-2 to the declarant within
fifteen days from the end of the month in which the declaration
under section 183 has been furnished.
( 4) The proof of payment of tax, surcharge and penalty made
pursuant to the acknowledgement issued by the Principal
Commissioner or the Commissioner shall be furnished by the
declarant to the such Principal Commissioner or Commissioner
in Form 3.
(5) The Principal Commissioner or the Commissioner shall
grant a certificate in Form-4 to the declarant within fifteen days
of the submission of proof of full and final payment of tax,
surcharge along with penalty by the declarant under section 187
of the Act in respect of the income so declared.
(6) The Principal Director-General of Income-tax (Systems) or
Director-General of Income-tax (Systems) shall specify the
procedures, formats and standards for ensuring secure capture
and transmission of data and shall also be responsible for
W.P. (C) 6541/2017 & 6543 of 2017 Page 4 of 18
evolving and implementing appropriate security, archival and
retrieval policies in relation to furnishing the form in the
manner specified in sub-rule(2).
Explanation. For the purposes of this rule "electronic
verification code" means a code generated for the purpose of
electronic verification of the person furnishing the return of
income as per the data structure and standards specified by
Principal Director General of Income-tax (Systems) or Director
General of Income-tax (Systems)."
5. Section 193 of the FA, 2016 begins with a non-obstante clause and reads
as under:
"Declaration by misrepresentation of facts to be void.
193. Notwithstanding anything contained in this Scheme, where a
declaration has been made by misrepresentation or suppression of
facts, such declaration shall be void and shall be deemed never to
have been made under this Scheme."
Background facts
6. Each of the Petitioners availed of the IDS by filing a declaration under
Section 183 of the FA, 2016 in Form-1 on 27th September, 2016. Each of the
Petitioners, declared an income of Rs.8,26,91,750/- as investment in shares
of various companies in the assessment years (AYs) 2011-2012, 2012-2013
and 2016-2017.
7. After the filing of the above declarations, the Designated Authority
(,,DA) issued an acknowledgement in Form-2 under Rule 4 (3) of the IDS
Rules. As far as Ankush Jain, the Petitioner in W.P. (C) No. 6541/2017 is
concerned, the DA issued an acknowledgement in Form-2 under Rule 4 (3)
of the IDS Rules determining the amounts payable as under:
W.P. (C) 6541/2017 & 6543 of 2017 Page 5 of 18
"Tax- 2,48,07,525/-
Surcharge- 62,01,881/-
Penalty- 62,01,881/-."
8. A separate acknowledgement was issued by the DA in respect of Vaibhav
Jain, the Petitioner in W.P. (C) No. 6543/2017. Thereafter, the Petitioners
made full payment of the tax, penalty and surcharge and submitted Form- 3
to the PCIT (9), New Delhi on 19th December, 2016.
9. The PCIT, CPC, Bangalore accepted the two declarations made by the
Petitioners under Section 183 of FA, 2016, with reference to the
undisclosed income of Rs.8,26,91,750/- for each petitioner and issued a
certificate in Form-4 read with Rule 4 (5) of the IDS Rules.
Impugned order of the PCIT
10. Subsequently, the PCIT (4), New Delhi passed the impugned order on 9th
June, 2017 under Section 183 of the FA 2016, holding that the above
declaration of income of Rs.8,26,91,750/- by each of the Petitioners was
made "by suppression and misrepresentation of facts." Therefore, both
declarations were held to be ,,void.
11. The PCIT referred to the report submitted by the ACIT, Special Range-4
dated 7th June, 2017 with regard to the assessment proceedings in the case of
M/s Akinchan Developers Private Limited, M/s Indo Metal Impex Private
Limited, M/s Prayas Infosolutions Private Limited and Mr. Satyender Kumar
Jain. In the said report, it was noted in paras 6 & 7 as under:
W.P. (C) 6541/2017 & 6543 of 2017 Page 6 of 18
"6. As per the report, assessment proceedings in the case of M/s
Akinchan Developers Pvt. Ltd. (A.Y. 2011-12 and 2012-13),
M/s Indo Metal Impex Pvt. Ltd (A.Y. 2011-12 and 2012-13) and
M/s Paryas lnfosolutions Pvt. Ltd (A.Y. 2012-13) were initiated
u/s 148 of the I.T. Act by the Assessing Officer, Addl. ClT
Special.Range-4, New Delhi, on the basis of information
received from the Office of Principal DIT Investigation, Kolkata
in August 2016, that these companies have taken
accommodation entries in the form of share capital from Kolkata
based shell companies. Subsequently, on the basis of further
investigation, the Assessing officer issued notices u/s 148 for
A.Y: 2011-12 and 2012-13 to Shri Satyendar Kumar Jain
(AAMPJ5555B) after recording reasons.
7. The information regarding accommodation entries was also
received by the Initiating officer for further examination and
necessary action under the Prohibition of Benami property
Transaction Act, 1988. The Initiating officer, after making
necessary inquiry and considering evidence issued provisional
attachment orders u/s 24(4) of the Prohibition of Benami
property Transaction Act, 1988 on 24.05.2017 by holding Shri
Satyendar Kumar Jain as the beneficial owner of the bogus share
capital introduced in the companies mentioned earlier. The
details of the orders passed by the Initiating Officer are as under:
S.No. Name of Benamidar Name of Beneficial Amount
Owner
1. Akinchan Developers P. Shri Satyender Kumar 4,85,83,200/-
Ltd. Jain
2. Indo Metal Impex p. Ltd. Shri Satyender Kumar 7,14,00,000/-
Jain
3. Paryas Inforsolutions P. Ltd. Shri Satyender Kumar 2,49,00,300/-
Jain
4. Goodview Tradecom P. Ltd. Shri Satyender Kumar 42,00,000/-
Jain
W.P. (C) 6541/2017 & 6543 of 2017 Page 7 of 18
5. Mubarak Lubricants P. Ltd. Shri Satyender Kumar 12,00,000/-
Jain
6. Puniya Leather P. Ltd. Shri Satyender Kumar 35,00,000/-
Jain
7. Virat Vintrade P. Ltd. Shri Satyender Kumar 40,62,500/-
Jain
8. R.P.Vyapaar P.Ltd. Shri Satyender Kumar 15,37,500/-
Jain
9. Salona Dealtrade P.Ltd. Shri Satyender Kumar 22,50,000/-
Jain
10. Swarnim Commosale P. Shri Satyender Kumar 22,50,000/-
Ltd. Jain
12. The PCIT in the impugned order noted that provisional attachment
orders under Section 24 (4) of the PBPT Act were passed on 24th May, 2017
and in respect of the same, observed that "on careful consideration of all
material available," it had been decided that each of the Petitioners had made
declaration of undisclosed income under the IDS "by misrepresentation and
suppression of facts".
13.The PCIT adverted to Form No.1 submitted by the Petitioners and noted
that in the 3rd Column where the names under which the shares were held
had to be mentioned, it was written, ,,multiple names. According to the
PCIT, the investment in shares declared by each of the Petitioners actually
belonged to one Mr. Satyender Kumar Jain. Reliance was placed upon the
provisional attachment order under Section 24 (4) of the PBPT Act. It was
pointed out that although the Petitioners had declared an investment in the
W.P. (C) 6541/2017 & 6543 of 2017 Page 8 of 18
shares of Akinchan Developers Private Limited (ADPL); it was held that the
said investments did not actually belong to the Petitioners, Ankush Jain and
Vaibhav Jain, but in fact to Mr. Satyender Kumar Jain.
14. The PCIT in the impugned order placed reliance on the report
submitted by ACIT, Special Range-4, New Delhi dated 7th June, 2017 with
regard to assessment proceedings in the case of M/s Akinchan Developers
Private Limited (,,ADPL), M/s Indo Metal Impex Private Limited
(,,IMIPL), M/s Prayas Infosolutions Private Limited and Mr. Satyender
Kumar Jain. A similar proceeding was initiated in the case of Mr. Vaibhav
Jain. While Mr. Ankush Jain stated that he came to know about the
proceedings only after the receipt of the impugned order dated 9th June,
2017, a similar order was passed in the case of companion writ Petitioner
Vaibhav Jain. It is in the above circumstances that these writ petitions were
filed challenging the impugned order dated 9th June, 2017 of the PCIT, who
had rejected the declaration of undisclosed income on the ground that each
of the Petitioners had both misrepresented as well as suppressed facts.
15. This Court has heard the submissions of Mr. Rakesh Tikku, learned
senior counsel appearing on behalf of the Petitioners and Ms. Maninder
Acharya, the learned ASG of India appearing on behalf of the Respondent,
PCIT.
Submissions on behalf of the Petitioners
16. One of the grounds of challenge raised by the Petitioners is that the
impugned order was passed in violation of the principles of natural justice,
W.P. (C) 6541/2017 & 6543 of 2017 Page 9 of 18
since no prior notice was issued to either of the Petitioners before passing
the impugned order rejecting the declarations of undisclosed income under
the IDA scheme. It is also contended that the order passed under Section 183
of the Act was a quasi-judicial one and could not have been passed without
prior notice to each of the Petitioners. In support of this proposition, reliance
is placed on the decisions in East India Commercial Communication
Company Ltd. Calcutta v. The Collector of Customs, Calcutta AIR 1962
SC 1893, Union of India v. Madhumilan Syntex Private Limited (1988) 3
SCC 348 and Metal Forgings. v. Union of India (2003) 2 SCC 36, C.B.
Gautam v. Union of India (1993) 1 SCC 78.
17. It is further submitted that the impugned order was based on a report, a
copy of which was never provided to either of the Petitioners. Thirdly, it is
submitted that the PCIT-4, New Delhi or the DA had no jurisdiction to pass
the impugned order since a declaration was made to the PCIT, CPC,
Bangalore. This was a jurisdictional defect which went to the root of the
matter. It is pointed out that each of the Petitioners had given full particulars
of the shares invested and the declarations had in fact been accepted by the
PCIT, CPC, Bangalore, by issuing an acknowledgement in Form No.4.
18. It is submitted that the reliance on the order dated 24 th May, 2017 passed
under the PBPT Act was misplaced. According to the Petitioners, the
proceedings under the PBPT Act, which were with respect to one of the
companies in which the Petitioners has invested, had no effect on the
declaration made by each of them under the IDS. Reference is made to
Section 190 of the PBPT Act to urge that the provisions thereof had no
W.P. (C) 6541/2017 & 6543 of 2017 Page 10 of 18
applicability to income disclosed under the IDS. Lastly, it is submitted that
the IDS is a beneficial scheme and has to be construed liberally.
Submissions on behalf of the Respondents
19. On behalf of the Respondents, Ms. Maninder Acharya, ASG of India
submitted as under:
(i)The admitted fact was that each of the Petitioners had under the column in
Form-1 which is titled "names in which, the shares were held" simply stated
,,multiple names. Such a declaration ex facie amounted to suppression of
facts.
(ii) There was no option with the Respondent No.1 but to pass the impugned
order since Section 193 of the FA, 2016 was straightaway attracted.
(iii) Under Rule 4 (5) of the IDS Rules, the issuances of Form- 4 constituted
receipt of the proof of full and final payment of tax, surcharge and penalty
by the declarant. The mere acceptance of the declaration under Form-4 did
not mean that power under Section 183 of the FA, 2016 could not be
exercised.
(iv) There was no question of violation of the principles of natural justice.
The IDS was a one-time measure giving the Assessees an opportunity to
make a complete and full disclosure. Section 183 of the FA, 2016 did not
envisage issuance of any show cause notice (SCN) before passing an order
under Section 193 of the FA, 2016 for failure to comply with the
W.P. (C) 6541/2017 & 6543 of 2017 Page 11 of 18
requirements of the IDS.
20. Ms. Acharya explained that the consequence of rejection of declaration
under the IDS is that the said amount would be assessed under the normal
procedure established under the Act, where in any event each of the
Petitioners would be heard. Reference is made to the decision in Hemlatha
Gargya v. CIT (2003) 259 ITR 1 (SC). There was sufficient material
available with the Respondents, which indicated that the amount declared in
the IDS was that of Mr. Satyender Kumar Jain. In other words, the
undisclosed income sought to be declared under the IDS by each of the
Petitioners actually belonged to Mr. Satyender Kumar Jain and therefore this
was a clear suppression of a material facts which justified the rejection of the
declarations.
Analysis and reasons
21. The above submissions have been considered. The purpose underlying
the enactment of the IDS, which was introduced under the FA, 2016, has
been set out in the Notes on Clauses to the FA, 2016, which read as under:
"An opportunity is proposed to be provided to persons who
have not paid full taxes in the past to come forward and declare
the undisclosed income and pay tax, surcharge and penalty
totalling in all to forty-five per cent of such undisclosed income
declared.
The scheme is proposed to be brought into effect from 1st June
2016 and will remain open up to the date to be notified by the
Central Government in the official gazette. The scheme is
proposed to be made applicable in respect of undisclosed
income of any financial year upto 2015-16.
W.P. (C) 6541/2017 & 6543 of 2017 Page 12 of 18
Tax is proposed to be charged at the rate of thirty per cent on
the declared income as increased by surcharge at the rate of
twenty five per cent of tax payable (to be called the Krishi
Kalyan cess). A penalty at the rate of twenty five per cent of tax
payable is also proposed to be levied on undisclosed income
declared under the scheme."
22. The Notes on Clauses further explained the IDS as under:
"Clauses 178 to 196 of the Bill seeks to insert a new Chapter IX
relating to Income Declaration Scheme, 2016. The said Scheme,
inter alia, provides for declaration of undisclosed income by any
person. The scheme shall be in operation from the 1st day of
June, 2016 till a date to be notified by the Central Government
in the Official Gazette. The proposed Chapter, inter alia,
provides for levying a tax of thirty per cent on the undisclosed
income declared in the scheme, a surcharge at the rate of
twenty-five per cent, of such tax as Krishi Kalyan Cess, and
penalty at the rate of twenty-five per cent, of tax; procedure and
manner of filing the declaration under the said Scheme;
undisclosed income declared under the said Scheme not be
included in the total income or affect finality of completed
assessments; income declared under the said Scheme shall not
be refundable; exemption from wealth-tax in respect of assets
specified in declaration; power to remove difficulty by the
Central Government; and power of Central Board of Direct
Taxes with the approval of the Central Government to make
rules for the purposes of the said Scheme."
23. As rightly pointed out, the IDS itself was a one-time measure to enable
those who had failed to disclose their income with the view to avoid the
payment of tax thereon, to make good this lapse by making a complete and
full disclosure in the manner specified in the IDS.
W.P. (C) 6541/2017 & 6543 of 2017 Page 13 of 18
24. This was explained by the Supreme Court in the context of an earlier
Voluntary Disclosure of Income Scheme, 1997 (VDIS), analogous to the
IDS in the present case, in Hemalatha Gargya v. Commissioner of Income
Tax (2003) 259 ITR 1 (SC). There, the Supreme Court emphasised that
Assessees who seek the benefit by the VDIS are bound to comply strictly
with the conditions under which such benefit is granted. The following
observations in the said judgment are relevant to this context:
"Besides the scheme has conferred a benefit on those who had
not disclosed their income earlier by affording them protection
against the possible legal consequences of such non-disclosure
under the provisions of the Income-tax Act. Where the
assessees seek to claim the benefit under the statutory scheme
they are bound to comply strictly with the conditions under
which the benefit is granted. There is no scope for the
application of any equitable consideration when the statutory
provisions of the scheme are stated in such plain language.
Seen from the angle of the designated authority, which is
created under the Scheme, it is clear that the authority cannot
act beyond the provisions of the Scheme itself. The power to
accept payment under the Scheme has been prescribed by the
statute. There is no scope for the Revenue authorities to imply a
provision not specifically provided for which would in any way
modify the explicit terms of the Scheme."
25. In the present case, a perusal of the disclosure forms submitted by
Assessees reveal that in Column 6, which concerns "statement of
undisclosed income (as per annexure)", there is a separate statement of
undisclosed income where for the three years i.e. 2011, 2012 and 2016, the
amounts have been disclosed. In the column title ,,description, it uniformly
states, "invested in shares in multiple names", whereas for 2011 and 2012 it
W.P. (C) 6541/2017 & 6543 of 2017 Page 14 of 18
states, "notice of 148 issued after 1st June, 2016 for Indo, Akinchan and
Prayas". For 2016, it states "invested in shares of multiple names of
,,Akinchan, ,,Prayas and ,,Mangal Yatan." The use of the phrase ,,multiple
names is again repeated in Part-B of the form, which is titled ,,unquoted
equity share of Rule 3 (1)(c)(ii) under the column which reads ,,names
under which held, the phrase ,,multiple names is simply stated throughout.
26. This must be read together with the verification, where each of the
applicants has solemnly declared that "the information given in the
declaration is correct and complete to the best of my knowledge and belief"
and in particular that in addition to the own income of the declarant for
which the declaration is made "the income of any other person in respect of
which have not chargeable to tax has not been included in this declaration".
27. There is another specific declaration in para H which reads, "the income
declared is not chargeable to tax under the Income Tax Act for any previous
year relevant to assessment year where a search has been conducted under
Section 132". It is further expressly stated that "the undisclosed income
declared in the form of investment in Benami Property and existing in the
name of Benamidar shall be transferred in the name of real owner on or
before 30th September, 2017 failing which immunity under Benami
Transactions (Prohibition) Act, 1988 shall not be available". Therefore, the
form itself made it abundantly clear to the person seeking benefit under the
IDS that the disclosure had to be both truthful and complete.
W.P. (C) 6541/2017 & 6543 of 2017 Page 15 of 18
28. It is in this context that in Section 193 of the FA, 2016 it was made clear
that where the declaration under the IDS is made by misrepresentation or
suppression of facts "such declaration shall be void" and "shall be deemed
never to have been made under the scheme". The forms also have a statutory
character as they are prescribed under the IDS Rules.
29. The Court is not persuaded by the submission of the Petitioners that each
of them ought to have been issued a notice prior to the impugned order being
passed. Even now, neither of the Petitioners has any explanation to offer for
not specifying the complete details of the persons in whose names the shares
in which investments had been made were actually held.
30. There are eight companies whose shares were purchased by the two
Petitioners, whose names have been included in the list. Admittedly, in
respect of the shares in ADPL, proceedings under Section 24 (4) of the
PBPT Act, 1988 have been initiated. The Petitioners have themselves
enclosed a copy of the order dated 24th May, 2017 passed in respect of the
,,Benamidar i.e. ADPL, which inter-alia notes that the cash that was routed
through accommodation entries in the garb of share capital/premium in fact
belonged to Mr. Satyender Kumar Jain and that it was at his direction that
the entire transaction was orchestrated. It was noted that neither of these two
Petitioners was either a Director or Shareholder in the said company. It was
noted that the declarants had not provided the name of the ,,Benamidar
through whom the investment had been routed and that these facts were all
completely within the knowledge of the two Petitioners. These conclusions
of the PCIT have not been convincingly countered by either of the
W.P. (C) 6541/2017 & 6543 of 2017 Page 16 of 18
Petitioners. In the circumstances, the PCIT was right in concluding that
neither of the Petitioners had made a full and true disclosure of all material
facts.
31. In Tanna & Modi v. CIT, Mumbai (2007) 7 SCC 434 the Supreme
Court upheld the action of the Respondent declaring the certificate issued
under the Kar Vivad Samadhan Scheme, 1998 to be null and void on
account of suppression of facts by the declarant. It was held in para 20 as
under:
"20. It may be necessary for the aforementioned purpose to bear
in mind that the immunity granted pursuant to acceptance of a
declaration made under the voluntary taxation scheme or Kar
Vivad Samadhan Scheme, 1998 does not lead to a total
immunity. Immunity granted under the Scheme has its own
limitations. The Scheme must be applied only in the event the
conditions precedent laid down therefor are applicable. See
State, CBI v. Sashi Balasubramanian and Alpesh Navinchandra
Shah v. State of Maharashtra."
32. The mere fact that an acknowledgement may have been issued in Form-
4 by the CIT, CPC did not provide any immunity to the Petitioners if it was
found that the declaration was contrary to Section 193 of the FA, 2016
which begins with a non-obstante clause.
33. There is no merit in the objection to the jurisdiction of the PCIT, Delhi to
issue the impugned order. The fact remains that the Petitioners declarations
were uploaded electronically at Delhi where both Petitioners reside. Their
assessments were completed in Delhi. The explanation offered in the counter
affidavits of the Respondent that the PCIT-30, New Delhi had by an order
W.P. (C) 6541/2017 & 6543 of 2017 Page 17 of 18
dated 10th January, 2017 under Section 127 of the Act transferred
jurisdiction to Additional Commissioner of Income Tax, Special Range-4
who in turn was authorised to make the impugned order merits acceptance.
Moreover, since this is a case of suppression of material facts the
Respondent No.1 was duty bound to give effect to the provision provided
under Section 193 of the FA, 2016.
34. Therefore, where the jurisdictional Principal Commissioner/
Commissioner of Income Tax finds a declaration to be based on such
misrepresentation or suppression of facts, he would not be precluded from
holding the declaration itself to be void in terms of Section 193 of the FA,
2016. The Court accepts the contention of the Respondent that there is no
provision as such in the IDS to afford the declarant a hearing prior to passing
an order holding such declaration to be void for being in contravention of
Section 193 of the FA, 2016.
35. For all of the aforementioned reasons, the Court finds no error having
been committed by Respondent No.1 in passing the impugned order.
36. The writ petitions are dismissed but in the circumstances with no order
as to costs.
S. MURALIDHAR, J.
TALWANT SINGH, J.
AUGUST 21, 2019
mw
W.P. (C) 6541/2017 & 6543 of 2017 Page 18 of 18
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