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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
R.V. Raveendran, J.
Atamjit Singh —Appellant
Vs.
Commissioner of Income-tax —Respondent
Writ Petition No. 24273 of 1999
Decided on : 16-07-1999
Voluntary Disclosure of Income Scheme - Commissioner can condone delay in paying tax - Act Section List: Finance Act, 1997, Section 64, Section 65, Section 66, Section 67 - The court discussed the relevant provisions of the Voluntary Disclosure of Income Scheme, 1997, including Section 64 relating to charge of tax on voluntarily disclosed income, Section 65 regarding the declaration to be made to the Commissioner, Section 66 requiring payment of tax, and Section 67 enabling the declarant to file the declaration without paying the tax within three months from the date of filing.
Fact of the Case:
The petitioner failed to pay the tax on the voluntarily disclosed income within three months from the date of filing the declaration, as required by Section 67 of the Finance Act, 1997. The Commissioner refused to grant a certificate under the Voluntary Disclosure Scheme due to the delayed payment.
Finding of the Court:
The court held that the statutory provisions of Sections 66 and 67 were specific and unambiguous, and the question of relaxing the provision or interpreting it beneficially in favor of the assessee did not arise. The court also noted that the Board's circular permitting payment on the 91st day when the 90th day is a bank holiday was in consonance with Section 67(2) and not contrary to it.
Issues: The issues involved the petitioner's failure to pay the tax within the specified period under the Voluntary Disclosure Scheme, and the contention that the delay should be condoned due to a bona fide error and the scheme should be liberally construed in favor of the assessees.
Ratio Decidendi: The court emphasized that when the wording of the statute is clear, the question of relaxing the provision on the ground of hardship or beyond the control of the party does not arise. It also clarified that the Board's circular permitting payment on the 91st day when the 90th day is a bank holiday was in line with the statutory provision.
Final Decision: The court disposed of the writ petition, allowing the petitioner to make an application for refund of the tax and interest paid, as the declaration was deemed never to have been made.
R.V. Raveendran J.—The question that arises for consideration in this petition is whether the Commissioner can condone the delay on the part of the declarant in paying the tax in respect of the income declared under the Voluntary Disclosure of Income Scheme, 1997.
2. The Voluntary Disclosure of Income Scheme, 1997 (in short "the scheme"), introduced by Chapter IV of the Finance Act, 1997 ("the Act" for short), was in force between July 1, 1997, and December 31, 1997. The relevant provisions of the Scheme are :
Section 64 of the Act relates to charge of tax on voluntarily disclosed income. It provides for filing of a declaration in respect of any undisclosed income chargeable to tax under the Income Tax Act (as enumerated in Subsection (1) of Section, 64) in the manner provided in Section 65, between July 1, 1997, and December 31, 1997.
3. Section 65 provides that a declaration under Section 64(1) shall be made to the Commissioner and such declaration shall be in the prescribed form.
4. Section 66 requires that the tax payable under the Scheme in respect of the voluntarily disclosed income shall be paid by the declarant and the declaration shall be accompanied by proof of payment of such tax.
5. Section 67 enables the declarant to file the declaration without paying the tax, provided he pays the tax in respect of voluntarily disclosed income within three months from the date of filing of the declaration with interest. It is, however, made clear that if the declarant fails to pay the same within the three months period, then the declaration filed by him shall be deemed never to have been made. The said Section is extracted below for ready reference :
"67. (1) Notwithstanding anything contained in Section 66, the declarant may file a declaration without paying the tax under that Section and the declarant may file the declaration and the declarant may pay the tax within three months from the date of filing of the declaration with simple interest at the rate of two per cent, for every month or part of a month comprised in the period beginning from the date of filing the declaration and ending on the date of payment of such tax and file the proof of such payment within the said period of three months.
(2) If the declarant fails to pay the tax in respect of the voluntarily disclosed income before the expiry of three months from the date of filing of the declaration, the declaration filed by him shall be deemed never to have been made under this Scheme."
6. The petitioner claims to have made a declaration in the prescribed form (annexure A to the petition) on December 27, 1997, declaring an income of Rs. 5,25,000 for the assessment years 1989-90 to 1993-94. She did not pay the tax on or before the date of such declaration. Nor did she pay the tax within three months from the date of filing the declaration with interest as provided in Section 67(1) of the Act. She paid the tax of Rs. 1,57,500 (as calculated in the manner provided under Section 64) and Rs. 9,450 as interest thereon, in all Rs. 1,66,950 on March 31, 1998.
7. The Commissioner has now sent the following communication dated June 25, 1999 (annexure C), to the petitioner in regard to the said declaration filed on December 29, 1997 :
"Please refer to the declaration filed by you on December 27, 1997, and the letter dated June 15, 1999, from Ostawal and Jain, C. As referred to above. As seen from the records, tax due on the amount declared was paid on March 31, 1998. Your attention is invited to the provisions of Section 67 of the said Act. In terms of the said provision, if the declarant fails to pay the tax in respect of the voluntarily disclosed income before the expiry of three months from the date of filing the declaration, the declaration filed shall be deemed never to have been made under the scheme.
Since the payment made by you on March 31, 1998, is beyond the due date, certificate under Section 68(2) cannot be issued."
8. Feeling aggrieved the petitioner has filed this pe
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