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1998 Supreme(P&H) 1081
PUNJAB & HARYANA HIGH COURT
G.S.Singhvi and Iqbal Singh JJ.
Vidya Devi
Versus
Cit
Civil Writ Petition No. 12396 of 1998,12405 of 1998,
Decided On : AUGUST 26, 1998
The expression "in respect of all income chargeable to tax under the Income Tax Act" used in the Voluntary Disclosure of Income Scheme, 1997 is confined to the assessment year 1962-63 and onwards, excluding income chargeable to tax under the Indian Income Tax Act, 1922.
Headnote:
VOLUNTARY DISCLOSURE OF INCOME SCHEME - INTERPRETATION OF SECTIONS 62 TO 68 OF THE FINANCE ACT, 1997 AND SECTION 297, READ WITH SECTIONS 147 TO 150, OF THE INCOME TAX ACT, 1961 - INCOME CHARGEABLE TO TAX UNDER THE INCOME TAX ACT, 1961 - MEANING AND SCOPE.
Fact of the Case:
Petitioners made declarations of gold coins and silver utensils under the Voluntary Disclosure of Income Scheme, 1997 (the Scheme) and deposited tax and interest. They applied for certificates under section 68(2) of the Finance Act, 1997, but the respondent refused, stating that the disclosure of income relating to the assessment year 1961-62 cannot be treated as valid under the Scheme. Petitioners challenged this decision, arguing that the income can be subjected to penalty under the Income Tax Act, 1961 and has to be treated as income for the purpose of the Finance Act, 1997.
Finding of the Court:
The court held that the benefit of the Scheme cannot be availed by the petitioners and, therefore, the certificate in terms of section 68(2) of the Finance Act, 1997 cannot be issued to them.
Issues: Whether the income chargeable to tax under the Income Tax Act, 1961 includes income chargeable to tax under the Indian Income Tax Act, 1922.
Ratio Decidendi: The court interpreted the expression "in respect of all income chargeable to tax under the Income Tax Act" used in the Scheme to be confined to the assessment year 1962-63 and onwards, excluding income chargeable to tax under the Indian Income Tax Act, 1922. The court reasoned that the Scheme was enacted to provide a one-time opportunity for voluntary disclosure of undisclosed income, and the income chargeable to tax under the 1922 Act was not within the scope of this expression.
Final Decision: The court dismissed the writ petitions, upholding the respondent's decision not to issue certificates under section 68(2) of the Finance Act, 1997 to the petitioners.
Singhvi, J.
1. Since a common point involving interpretation of sections 62 to 68 of the Finance Act, 1997 (hereinafter referred to as the 1997 Act) and section 297, read with sections 147 to 150, of the Income Tax Act, 1961 (hereinafter referred to as the 1961 Act) arises for adjudication in these petition, we arc deciding them by one order.
Facts:
2. Civil Writ Petition No. 12395 of 1998 - The petitioner made declaration of 865 gold coins and 128 kilograms of silver utensils under the Voluntary Disclosure of income Scheme, 1997 (the Scheme). She deposited Rs. 30,000 as tax and Rs. 1,200 as interest chargeable under the Scheme. Simultaneously, she also made an application for issuance of certificate under section 68(2) of the Finance Act, 1997 . Vide Annexure P3, the respondent refused to issue certificate to the petitioner on the ground that the disclosure of income relating to the assessment year 1961-62 cannot be treated as valid under the Scheme. The petitioner represented against this decision but failed to convince the respondent to change his decision. Therefore, she has invoked writ jurisdiction of this Court for quashing Annexures P3 and P5 and also for directing the respondent to issue certificate to her under section 68(2).
Smt. Lajwanti who has filed Civil Writ Petition No. 12396 of 1998 for grant of similar relief, made declaration of 962 gold coins priced at Rs. 1,01010 and silver utensils weighing 126 kilograms valued at Rs. 25,465. She paid Rs. 30,000 as tax and Rs. 1,200 as interest. Her request for issuance of certificate under section 68(2) has also been declined.
Kundan Lal Bansal who is the petitioner in the third petition made declaration of 532 gold coins and 23 kilograms silver utensils valued at about Rs. 62,500. He deposited tax amounting to Rs. 18,075. His request for issuance of certificate under section 68(2) has been declined by the respondent on the ground that the provisions of the Scheme are not applicable to the declaration made in respect of the assessment year 1961-62.
Shri Sanjay Kaushal argued that the decision of the respondent not to issue certificates under section 68(2) is based on a totally incorrect interpretation of the provisions of the 1997 Act and the 1961 Act. The learned counsel submitted that the income can be subjected to penalty under the 1961 Act and has to be treated as income for the purpose of the 1997 Act and the respondent has gravely erred in holding that the declaration of the income made in respect of the assessment year 196 1 -62 cannot be treated as valid under the Scheme.
3. Chapter IV of the 1997 Act contains detailed provisions relating to the Scheme. Section 63(b) contains definitions of various terms and expressions. Section 64 lays down the method of charging of tax on voluntarily disclosed income. Section 65 enumerates the particulars to be furnished in the declaration. Section 66 specifies the time for payment of tax and section 67 requires the payment of interest. Section 68 which is declaratory in nature lays down that the amount of voluntarily disclosed income shall not be included in the total income of the declarant for any assessment year subject to the fulfilment of the conditions specified in that section. Section 147 contains provisions to deal with income escaping assessment. Section 148 lays down the requirement of issuing notice before an order under section 147 can be made. Sections 149 and 150 specify the time-limit within which assessment or reassessment or recomputation can be made. Section 297 contains repealing and saving provisions.
4. For the purpose of deciding whether the decision of the respondent not to issue certificate to the petitioners under section 68(2) of the 1997 Act is legally correct and justified, we deem it appropriate to analysis various provisions which are reproduced below:
"The 1997 Act
63. Definitions.-In this Scheme, unless the context otherwise requires,- declarant means a person making the declaration un
