Navjeevan Dharmi Associates Vs PCIT (Bombay High Court)
Summary: The Bombay High Court considered a Writ Petition challenging an order dated 29th March 2024 passed by Respondent No. 1 under Section 264 of the Income Tax Act, 1961. The dispute concerned Assessment Year 2017-18 and, principally, the characterization of income declared under the Income Declaration Scheme, 2016 (IDS, 2016), and the availability of credit for amounts already paid under the scheme.
Read SC Judgment in this case: Supreme Court Refuses Interference in IDS 2016 Tax Credit Ruling
For A.Ys. 2014-15 and 2015-16, the Petitioner had not filed Returns of Income. After the IDS, 2016 was introduced on 1st June 2016, the Petitioner filed Form No. 1 on 4th August 2016 declaring undisclosed income. The total tax liability under the IDS, 2016 was calculated at Rs. 1,87,55,741/-. The Petitioner paid Rs. 25 Lakhs on 30th December 2017 and another Rs. 25 Lakhs on 15th February 2018 but made no further payment. Consequently, the Petitioner did not become entitled to the benefit of the IDS, 2016.
For A.Y. 2017-18, the Petitioner filed its Return of Income on 15th February 2018. A notice under Section 148 was issued on 31st March 2021 on the basis that the undisclosed income of Rs. 4,16,79,423/- declared for A.Ys. 2014-15 and 2015-16 under the IDS, 2016 had become taxable in A.Y. 2017-18 because the total tax liability under the scheme had not been paid within the prescribed period.
