By TIOL News Service

ERNAKULAM, NOV 02, 2017: THE ISSUE BEFORE THE BENCH IS - Whether benefit of Amnesty Scheme can be claimed only by those Assessees who have been levied penalty under the provisions of Act providing for minimum & maximum penalty. NO is the verdict.

Facts of the case:

The Revenue Department preferred present appeal challenging the judgment rendered by High Court Single Judge for upholding the entitlement of Assessees to have their applications for the benefit of the Direct Tax Dispute Resolution Scheme, 2016, processed and orders passed untramelled Circulars issued by the CBDT.

High Court held that,

++ the only contention that was raised by Revenue's counsel was that, the cases in hand, being cases where penalty has been levied u/s 271D & 271E and as the Sections do not specify any minimum penalty or maximum penalty, the cases of Assessees are outside the Amnesty Scheme mentioned above. To substantiate this contention, the DR referred to Clause 201(1)(h) defining “tax arrear” and sub-clause (b) of Clause 202 of the Scheme. Particular emphasis was given to subclause (b) wherein it is provided that penalty of 25% of the minimum penalty leviable and the tax and interest payable on total income finally determined, shall be payable by Assessee under the Scheme in question. According to the counsel, the legislature having specified minimum 25% of penalty leviable as the amount payable, only those assessees who have been levied penalty under the provisions of Income Tax Act which provides for levy of minimum penalty and maximum penalty, alone can claim the benefit of the Scheme;

++ apart from the fact that such an argument was not raised when the writ petitions were heard by the single Judge, we also find that on merits, the Revenue's contention is liable to be rejected. A reading of Section 271D shows that a person who is liable to pay penalty thereunder shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit or specified sum so taken or accepted, in contravention of Section 269SS. Similarly, u/s 271E also, the penalty provided is a sum equal to the amount of loan or deposit or specified advance, if so repaid. When a specified sum is so provided as the penalty, such specified sum is the minimum penalty payable. That does not, however, mean that the benefit of the Scheme can be claimed only by those assessees who have been levied penalty under the provisions of the Act providing for minimum penalty and maximum penalty.

(See 2017-TIOL-2290-HC-KERALA-IT)