Uttarakhand HC Seeks Review Of Income Tax Relief For Taxpayer Whose Cheque Was Cleared Late Despite Timely Deposit
The Uttarakhand High Court has recently directed the Income Tax Department to reconsider a taxpayer's claim for relief under the Income Declaration Scheme, 2016, after his final tax installment was credited after the deadline despite the cheque being deposited on time.
Justice Manoj Kumar Tiwari was hearing a petition filed by Sachin Kumar Gupta, whose declaration under the scheme was treated as void because his final payment was credited on October 5, 2017, instead of by September 30, 2017.
Gupta's total tax liability was ₹79.66 lakh, payable in three instalments. After paying the first two instalments, he deposited a cheque for ₹39.83 lakh towards the final installment on September 28, 2017. The bank encashed it on October 5, following intervening bank holidays.
Gupta challenged the department's decision, arguing that he should not be penalised for the bank's delay in clearing the cheque.
He relied on a Central Board of Direct Taxes (CBDT) circular dated July 12, 2019. The circular clarified that payments tendered by October 3, 2017, and credited by banks by October 5, 2017, would be deemed to have been made by the September 30 deadline.
During the hearing, the Income Tax Department's counsel submitted that, based on the documents filed with the petition, Gupta appeared entitled to the benefit of the circular.
The Court observed, “Having regard to the facts and circumstances of the case, the writ petition is disposed of by directing respondent No. 1 to revisit the matter by ascertaining whether 3rd (final installment) was deposited by petitioner through cheque on 28.09.2017, and whether the amount was credited in the account of Income Tax Department on 05.10.2017, as alleged by petitioner.”
The High Court directed the department to verify the payment dates and grant Gupta the benefit of the Income Declaration Scheme, 2016, if his case was covered by the circular. It must pass the necessary order within six weeks from the date of presentation of a certified copy of the judgment.
For Petitioner: Advocate Siddhartha Singh
For IT Dept: Advocate Hari Mohan Bhatia