Jagathesh Vs ACIT (ITAT Chennai)
ITAT Chennai held that section 197(b) of the Finance Act, 2016 cannot be invoked since Form 2 as contemplated under Income Declaration Scheme not served. Accordingly, addition u/s. 69A made in assessment u/s. 147 r.w.s. 144 liable to be deleted.
Facts- A survey u/s.133A had been carried out in the assessee’s case on 23.05.2018. The assessee in his statement recorded during the course of survey had failed to give any credit worthy details regarding the source for the acquisition of the property and had admitted that the said properties were acquired through borrowings from various sources but failed to give credit worthy details regarding the source for acquisition of the properties. The assessment order was passed on 22.04.2023 treating the entire sum of Rs.14,55,65,400/- as an addition to the returned income for the A.Y.2017-18. The said income of Rs.14,55,65,400/- was assessed u/s.69A of the Act, thus taxing the income at the rates provided for in section 115BBE of the Act.
CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed. It is mainly contended that the Form 2 as contemplated by Rule 4(3) of the Income Declaration Scheme Rules, 2016 [IDS Rules], has not been served on the assessee and that therefore the question of payment of tax / surcharge / penalty does not arise. This being so, there was no scope for invocation of section 197(b) of the Finance Act 2016.
