CBDT has said a “revised” and bona fide declaration made under the one-time black money disclosure window that ended on September 30 will be allowed even if the undisclosed income under it is less than what was committed earlier.
The latest directive was issued after field offices of the Income Tax department raised queries on the issue as they found that some revised declarations filed under the window, also called the Income Declaration Scheme (IDS), were genuine but the department was doubtful as to how to proceed further as standing instructions in this regard said such a filing will be considered valid only if the “revised declaration is not less than the undisclosed income declared in the declaration already filed”.
“The issue has been examined. It is clarified that where jurisdictional Principal Commissioner or Commissioner is satisfied that the mistake in filing original declaration in Form No 1 (filing form for IDS) appears to be genuine and bona fide, the concerned Principal Commissioner or Commissioner may address the same while processing the declaration.
“In such cases a facility has been provided to the jurisdictional Principal Commissioner or Commissioner to generate rectified Form No 2 (acknowledgement) on the department systems,” the Central Board of Direct Taxes said.
A directive has also been issued to clarify what should the taxman do in cases where an assessee claims that a tax issue under pending assessment proceeding is covered by his or her declaration made under IDS.
“In this context, it is clarified that in cases where the assessee claims that an issue under an assessment proceeding has nexus with the declaration filed under the scheme (IDS), the Assessing Officer (AO) may obtain a written undertaking along with relevant documentary evidence from the assessee about the issues and quantum of amount covered under the declaration having bearing on the pending assessment proceeding,” it said.
It added that the AO, on being satisfied about the nexus of the amount declared under IDS, either in whole or in part, with the issue raised in the assessment proceeding “shall provide the benefit of such amount in the pending assessment provided the assessee duly pays the tax, surcharge and penalty payable under the Scheme.”
“However, in respect of cases getting barred by limitation on December 12, 2016 such benefit shall be provided if the assessee pays the first instalment of 25 per cent of the amount payable on the declaration filed under the scheme,” it said.
In the biggest ever black money disclosure, at least Rs 65,250 crore of undisclosed assets were declared under the IDS that ended on September 30.
Last year, under a similar scheme for foreign black money holders, 644 declarations of undisclosed foreign income and assets were received, and just Rs 2,428 crore was collected in taxes.