Smita Rohit Gupta Vs PCIT-1 (Bombay High Court)
Summary: The Bombay High Court quashed an order passed by the Principal Commissioner of Income Tax under Section 264 of the Income-tax Act, 1961 and remanded the matter for fresh consideration on merits. The Court held that the revisional powers under Section 264 are wide and that the Commissioner was required to examine whether the income in question was actually taxable, particularly after the petitioner had subsequently complied with the payment requirements under the Income Declaration Scheme, 2016 (IDS).
The petitioner, an individual, had filed a declaration under the IDS. Under the Scheme, the tax, surcharge and penalty were payable in three instalments. She paid the first instalment but defaulted on the remaining two. Consequently, under Clause 3 of Section 187 of the Finance Act, 2016, her declaration was deemed never to have been made under the IDS. Section 197(b) consequently made the undisclosed income chargeable to tax under the Income-tax Act in the previous year in which the declaration was made. The petitioner therefore filed a revised return of income.
Subsequently, the Finance (No. 2) Act, 2019 inserted a proviso to Section 187(1) of the Finance Act, 2016. The proviso empowered the Central Government to specify persons who could make payment of the outstanding tax, surcharge and penalty, together with interest, within a notified period. Pursuant to this provision, Notification No. 103 of 2019 dated 13 December 2019 permitted persons who had not earlier paid the tax under the Scheme to make the payment by 31 January 2020, along with applicable interest. The petitioner was covered by the Notification.
