Pinnacle Vastunirman Private Limited Vs Union of India (Bombay High Court)
Summary: The Bombay High Court considered whether an amount of Rs. 82,33,874/- paid by Pinnacle Vastunirman Private Limited under the Income Declaration Scheme, 2016 (IDS) could be adjusted and given credit while determining the amount payable under the Direct Tax Vivad Se Vishwas Act, 2020 (DTVSV Act).
The petitioner had declared undisclosed income of Rs. 7,31,89,985/- for assessment year 2016-17 under the IDS. The tax, surcharge and penalty payable under the scheme amounted to Rs. 3,29,35,493/-. The petitioner paid the first instalment of Rs. 82,33,872/- by two challans. The assessment subsequently treated the declaration as having failed because the remaining instalments were not paid. Under Section 187(3) of the IDS, the declaration was consequently deemed never to have been made, and under Section 197(b), the undisclosed income became chargeable to tax under the Income-tax Act.
An assessment order dated 29 December 2018 determined Rs. 3,35,08,445/- as payable. Although the assessment order recorded that the petitioner had paid the first IDS instalment, it did not give credit for the amount paid. The petitioner challenged the assessment and its appeal was pending.
After enactment of the DTVSV Act, the petitioner submitted Form No. 1 for assessment year 2016-17 and disclosed the payment of Rs. 82,33,874/- made under the IDS. The designated authority issued Form No. 3 but did not give credit for that amount. The petitioner sought rectification. Respondent no. 3 refused, taking the position that the amount stood forfeited because the petitioner had failed to comply with the IDS. Reliance was placed on Section 191 of the IDS, which provides that tax, surcharge and penalty paid pursuant to a declaration are not refundable, as well as on the distinction between the IDS as a scheme and the DTVSV Act.
