Condonation of delay in making IDS payment : CIT to dispose of application

By | October 10, 2017
(Last Updated On: October 10, 2017)


Sadhana Rajendra Jain


Central Board of Direct Taxes



AUGUST  29, 2017

Rohan Deshpande for the Petitioner. S.V. Walve for the Respondent.


1. This petition was placed before us on 14-8-2017 but due to paucity of time it could not be taken up on that day. It was adjourned to 21-8-2017.

2. On 21-8-2017, we noted the request of the petitioner’s Advocate and in the presence of Mr. Walve passed the following order:—

“1.Let Mr. Walwe, who accepts notice on behalf of the Respondents, inform the Court as to whether the petitioner’s application seeking condonation of delay in making payment of first installment under the Income Declaration Scheme of 2016 is disposed of or is still pending. The application stated to be made, a copy of which is at annexure “A” to the Petition, is dated 12th December, 2016. Let Mr. Walve inform us on the next date whether this application is disposed of or is still pending, depending upon which, we will issue the requisite further directions for its consideration.
2.List the matter on 29th August, 2017 for passing orders.”

3. We specifically indicated to Mr. Walve that the application, copy of which is at Annexure-A to the petition, is dated 12-12-2016. There is no reason why the Revenue cannot inform this Court at least by the next date, which is today, whether this application is pending or disposed of and if it is still pending, when will it be taken up for consideration.

4. The matter was specifically listed today and to be placed under the caption “For Passing Orders”.

5. Once again Mr. Walve, appearing for the respondents, seeks time and by urging that the matter is being looked into at the highest level. The Departmental Seniors/Superiors are yet to instruct him with regard to the stand of the Department/respondents and hence he be granted an adjournment.

6. In the light of the earlier order and the pendency of this petition for a considerable period of time, we refuse the adjournment.

7. The petitioner’s application seeks condonation of delay in making payment of the first instalment under the Income Declaration Scheme of 2016 (for short, “IDS”).

8. The petitioner relied upon the statement of facts in this petition to urge that the same are more or less admitted.

9. However, whether the application under Section 119(2) of the Income Tax Act, 1961 (for short, “the I.T. Act, 1961”) can be decided and whether that provision can be invoked is a matter which is left to the authorities.

10. The petitioner has placed before the Court her version and stated that the delay has occurred for bona fide reasons. There are no mala fides. The respondent No.1 seeks to impinge and abridge the powers available under the statutory provision and namely, Section 119(2) of the I.T. Act, 1961 to condone the delay and prevent genuine hardship in fit cases. It is in these circumstances, the request is made to issue a direction for consideration of the application in accordance with law.

11. After having heard both sides and perusing the petition and its annexures, we find that the petitioner relies upon the order under Section 119 of the I.T. Act, 1961. The Government of India, Ministry of Finance, Department of Revenue, Central Board of Direct Taxes is aware that it has received condonation petitions, including under Section 119 of the I.T. Act, 1961 from some of the declarants under the IDS. If they have paid (fully or partly) the first instalment, either belatedly and after the prescribed date of 30-11-2016, or have not yet made the payment and have now made a request for relaxing/extending the due date, then, the Board has observed as under:—

“2.Under the IDS, 2016, declarants were required to pay the first instalment of the twenty-five per cent of total liability of tax, surcharge and penalty on or before 30th November, 2016. Considering the fact that some of the declarants under the IDS Scheme faced technical difficulties in depositing the first instalment at the banks, vide Instruction No.2/2017 dated 16.01.2017 in F.No.142/8/2016-TPL (Part), Board has already issued directions to the jurisdictional Principal Commissioners/Commissioners to accept the payment of tax etc., payable under IDS in cases where remittance had been made through cheque, RTGS, electronic transfer etc. on or before 30th November, 2016, but the same was credited by banks after 30th November, 2016 but before 5th December, 2016. Further, to mitigate difficulties being faced by the declarants regarding getting due credit for payments which were made within the prescribed timeframe, guidelines for effecting correction in challan attributes have also been issued vide Order in F.No.SW/07/01/06/OLTAS INSTRUCTION/DIT(S) II dated 13.02.2017. Hence, the hardships faced by the declarants due to technical issues have already been redressed.
3.As far as remaining declarants are concerned, the reasons for not making timely payments are stated as under —
(a) Personal/emergency reasons
(b) Lack of liquidity
(c) Confusion about the due date
(d) Rush at banks
(e) Any other reasons which are attributable to declarants
3.1The Board after considering the matter, is of the view that either condoning the delay in making payment of first instalment by the defaulters who have not paid any amount till now or further extending the date beyond the due date for regularising/facilitating the payment of liabilities under IDS merely to accommodate a few, especially when most of the declarants had abided by the prescribed scheduled date, does not merit consideration. It is noted that IDS does not provide for levy of interest on delayed payments, and hence, granting such a condonation to the defaulters may be discriminatory against the declarants who made it a point to adhere to the prescribed time schedule. It is also observed that all the declarants while filing declarations under the IDS were well aware of the payment schedule which they were required to follow. The final liability also became crystallised once a certificate in Form No.2 {r.w. Rule 4(3) of the IDS Scheme} was issued by the Pr.CIT/CIT to that effect by mid-October, 2016. Thus, the defaulting declarants who want condonation of delay on the grounds mentioned above had sufficient time at their disposal to suitably organize their affairs so as to ensure timely payment of first instalment without the need to wait till the last minute. It is also relevant to point out here that provisions of the Scheme were well publicised by the Government through various steps such as media campaigns in visual, print & social media, organized meetings, awareness programmes etc. whereby the declarants were also suitably informed of the legal consequences arising from non-compliance of payment schedule. Hence, any delay by the declarants on grounds mentioned above is solely attributable to lack of initiative or timely action on the part of the concerned declarants and hence does not justify condonation.”

12. In para 3.2, the Board concludes that while exercising its power under Section 119 of the I.T. Act, 1961, it has been decided that granting an application for condonation of delay in payment of instalment under the IDS beyond the prescribed due date or relaxation/extension of due date shall not be feasible in cases of delays due to circumstances mentioned in para 3 above.

13. At the same time, in para 4, the Board refers to circumstances over which the declarant had absolutely no control. It is only in such cases the concerned Principal Commissioner of Income Tax/Commissioner of Income Tax is authorised to deal with the application on a case to case basis, after verifying the claim of the declarant through the relevant Bank statements/certificates, etc., and consider on merits the condonation in appropriate cases provided the amount payable as per the first instalment as well as the second instalment is paid on 31-3-2017 by the concerned declarant.

14. The petitioner in the writ petition has placed reliance on such exceptions carved out by even the Board’s circular.

15. In the circumstances, we direct that the application seeking condonation of delay, copy of which is annexed to the petition at Annexure-A (page 22) be considered in accordance with law and particularly in the light of the Board’s circular/clarification which we have referred above. The application be considered in accordance with law on its own merits as expeditiously as possible and within a period of six weeks from the date of receipt of a copy of this order. We clarify that we have not expressed any opinion on the merits of the petitioner’s application. The writ petition is disposed of in above terms and directions. No costs.

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