Prabhakar Nerulkar Vs PCIT (Bombay High Court)
Revenue Cannot Sit in Appeal over Accepted Disclosure- IDS Sanctity Upheld – Bombay HC Quashes Reopening Based on Disclosure Data-No Reassessment Once IDS Accepted – Goa Bench Protects Declarant’s Immunity
The Bombay High Court at Goa delivered a landmark ruling protecting the sanctity of the Income Disclosure Scheme, 2016 (IDS), by quashing the reassessment order u/s 147/144/144B dated 16.03.2022 & all consequential notices.
The Petitioner, a real estate businessman, had not filed returns for AYs 2011-12 to 2016-17 but later declared ₹13.69 lakh under IDS, 2016, which was accepted by the Department, & a valid Form-IV certificate u/s 183 of Finance Act, 2016 was issued. Despite this, AO reopened AY 2014-15 citing purchase of property (₹80 lakh), sale (₹43 lakh) & cash deposits (₹20.61 lakh), ultimately adding ₹1.43 crore as unexplained income.
PCIT, in revision u/s 264, deleted additions relating to sale & deposits but sustained addition of ₹28.40 lakh for purchase of property, treating it as unexplained investment.
The High Court held that once a valid IDS declaration is accepted & certificate issued, such income cannot again be reopened or reassessed, unless the declaration was obtained by fraud or misrepresentation—which the Revenue never alleged. Referring to Circulars Nos. 25/2016, 32/2016 & FAQs under IDS, & following Uma Corporation vs ACIT (284 ITR 67, Bom), the Court reiterated that information disclosed under IDS is confidential, cannot be shared or used for reassessment, & reopening based on IDS data is “an abuse of power.”
