The court ruled that pre-IDS payments can be considered valid for claiming benefits under the Income Disclosure Scheme, establishing entitlement despite prior payment timelines.

JUDGMENT :

BHARGAV D. KARIA, J.

1 Heard learned Senior Advocate Mr.Tushar Hemani with learned advocate Ms.Vaibhavi Parikh for the petitioner and learned Senior Standing Counsel Mr.Karan Sanghani for the respondent. Learned Senior Advocate Mr.Hemani has tendered the Additional Affidavit affirmed on 08.07.2025 in both petitions containing the Assessment Order passed in case of the petitioner after filing of the petitions, copy of appeal memo in Form 35 filed by the petitioner against the same Assessment Order, copy of Assessment Order of the co-owner and copy of the screen shot of the grievance raised by the petitioner on-line on 24.06.2025. Additional Affidavit filed today is ordered to be taken on record.

2 Rule returnable forthwith. Learned advocate Mr.Karan Sanghani waives service of notice of rule on behalf of the respondent.

3 Having regard to the controversy involved in this petition in narrow compass with the consent of the learned advocates for the parties, both the petitions are taken up for final hearing.

4 As both the petitions are arising out of the denial of benefit of the Income Disclosure Scheme, 2016, the same were heard analogously and are being disposed of by this common order as the facts are similar.

5 For the sake of convenience, Special Civil Application No.14772 of 2023 is treated as the lead matter.

6 The petitioner of SCA No. 14772 of 2023 filed the declaration in Form No.1 under Sec.183 of the FINANCE ACT , 2016, which introduced “Income Declaration Scheme, 2016”(for short the “IDS”).

6.1 As per the IDS, an assessee is required to file declaration of undisclosed income within the prescribed time limit subject to payment of applicable taxes, surcharge and penalty on or before 30.11.2016.

6.2 The petitioner filed Form No.1 under the IDS declaring the undisclosed income of Rs.27,33,840/- for the Assessment Year 2012- 13. As per the Form No.1, the petitioner was required to pay a sum of Rs.12,30,228/- comprising of the tax @30% amounting to Rs.8,20,152/-, surcharge thereon @25% amounting to Rs.2,05,038/- and penalty of Rs.2,05,038/-

6.3 The assessee also disclosed in the Form No.1 that the assessee had paid an amount of Rs.6,90,960/- on 23.12.2015 towards tax payable, surcharge and penalty.The declaration in Form No.1 was filed on 30.09.2016. Annexure to the Form No.1 described the nature of undisclosed income as income as per Sec.50C of the INCOME TAX ACT , 1961 (for short ‘the Act’)on sale of agricultural land located at Survey No.156/2, Block No.164 Palsana, Surat. The respondent department on 15.10.2016 issued Form 2 acknowledging the declaration filed by the petitioner. On receipt of Form 2, the petitioner made the payment of balance tax amount on 25.11.2016. The petitioner, thereafter, filed Form No.3 on 30.11.2016 under Rule4(4) of the Income Declaration Rules,2016 (for short “the IDS Rules”), showing the payment of Rs.12,30,228/- comprising of Rs.6,90,960/- paid on 23.12.2015 and an amount of Rs.5,39,268/- paid on 25.11.2016 along with the challans showing the payment made by the petitioner.

6.4 The respondent, however, by an e-mail dated 22.09.2017 directed the petitioner to submit Form No.3 pertaining to the payment of the third and final installment of tax on the unaccounted income declared under the IDS along with copies of challan with respect of payment of tax, surcharge and penalty as prescribed and the petitioner was also directed to upload Form No.3 through E-filing system on or before 30.09.2017. The petitioner, by reply e-mail dated 26.09.2017, informed the respondent that the petitioner has already paid the entire tax before 30.11.2016 as notified under sec.184 of the FINANCE ACT , 2016 and has also filed Form No.3 manually as the on-line system was not allowing such form to be filed. It is also pointed out that the amount deposited by the petitioner is not reflected in Form 26AS and due to not showing such payment, there is a