The court is not inclined to interfere with the order dated 29.03.2001 passed by the Commissioner, Income-tax. Hence, Writ Petition is hereby dismissed by HIGH COURT OF MADHYA PRADESH AT INDORE in the case of SUBHASH CHANDRA V. COMMISSIONER OF INCOME TAX through HON’BLE JUSTICE VIVEK RUSIA
FACTS OF THE CASE
The facts of the case are that the petitioner became the assessee of the income tax department in the year 1997-98. At the relevant time, he was an employee of United India Insurance Company. He did not file an income tax return from 1993-94, 1994-95, 1995-96,1996-97 and 1997-98 within the prescribed time as per provision of 139 (1) of Income Tax Act. He filed his IT returns for the above 4 assessment years only on 23.01.1998. According to the petitioner, he could not file the above IT returns within the prescribed time because certificates under Section 203 of Income Tax Act vide form No.16 which were issued by the employer only on 24.06.1993, 31.05.1994, 03.05.1995, 13.05.1996 and 11.07.1997 for the assessment year 1993-94, 1994-95, 1995-96, 1996- 97 and 1997-98 respectively. According to the petitioner the advance tax had already been paid for the aforesaid assessment year well before the prescribed due dates by the employer. In these returns, the petitioner has shown his regular income from salary, interest, dividends and capital gains. The Central Government introduced the Voluntary Disclosure of Income Scheme, 1997 by introducing CHAPTER IV comprising sections 62 to 78 in the Finance Act, 1997. Under the VDIS all persons were permitted to submit income tax return between the period the date of commencement of scheme till 31st day of December 1997 in respect of any income chargeable to tax under the Income-tax for any assessment year, firstly- for which he has failed to furnish a return, secondly which he has failed to disclose in a return of income tax furnished by him, thirdly, which has escaped assessment by reason of the omission or failure on the part of such person to make a return under the income tax Act. Under Section 65 of Finance Act, 1997, a declaration under subsection 64 shall be made to the Commissioner of IT in the prescribed form. The tax payable under this scheme shall be paid by the declarant and shall submit proof of payment of such tax. Section 68 of Finance Act, 1997 provides that income so voluntarily disclosed shall not be included in the total income of the declarant for any assessment year under the Income-tax Act on two conditions namely the declarant credits such amount in the books of account, if any, maintained by him and the income-tax in respect of voluntarily disclosed income tax is paid by the declarant within the time specified in section 66 or section 67. After fulfilling aforesaid requirements, the Commissioner shall grant a certificate to the declarant. Section 70 says that any amount of tax paid under this VDIS scheme shall not be refundable under any circumstances.
In this case, the petitioner has first availed the benefit of VDIS by submitting the return 01.07.1997 and 31.12.1997 for the assessment year 1993-94 to 1997-98 and paid the income-tax @ 30%. Thereafter, he filed the belated IT returns under Section 139 on 23.01.1998 and deducted income so disclosed in VDIS i.e., voluntary disclose income. For the assessment year 1993-94 to 1997-98, he has declared his income Rs.13,74,947/- with the description of assets i.e., cash, debtor, share and bank account and paid income tax Rs. 4,12,482/- on 26.12.1997. Thereafter, he submitted return for those two assessments years 1996-97 and 1997-98 by declaring income from salary, NSC, Bank, Unit Trust, Mutual fund etc Rs.3,74,234/- and deducted the income under VDIS and claimed tax liability ‘Nil’ to claim the refund of Rs.49003/-. This is not the intention of the VDIS. The voluntarily disclosed income is not liable to be included with regular income declared in the return under section 139 as tax paid under VDIS is not liable to be refunded at any cost. The income tax return submitted under Section 139 is not liable to be reopened after availing of the VDIS. The source of income shown for voluntary disclose income and income source shown in the return under Section 139 is altogether different. Under Section 64 of the Finance Act only those persons are entitled to give declaration in respect of income chargeable under the tax under the Income Tax Act for any assessment year, firstly for which he has failed to furnish return under Section 139, secondly, which he has failed to disclose in a return of income furnished by him under the Income Tax Act before the date of commencement of the scheme, thirdly, which has escaped assessment by reason of the omission or failure. As per clause sub-clause (a), in this case, the petitioner did not furnish any return under Section 139 before 31.12.1997, therefore, in voluntarily disclosed income, he ought to have disclosed his all income from all the sources because till 31.12.1997, he did not disclose his any of the income by submitting the return under Section 139. He submitted the return under section 139, after 31.12.1997 i.e., 23.01.1998 to bring his case within clause 64 (1) (b). He submitted belated IT returns under section 139 but as per the requirement of section 64 (1)(b) that ought to have been filed before the date of commencement of the scheme. Since he did not submit any return under section 139 before this scheme, therefore involuntarily disclosed income, he ought to have disclosed his entire income. He cannot be permitted to commit mischief with the Act or VDIS by disclosing part of his income in VDIS and thereafter part of his income by submitting belated return as the Bombay High Court in case of Earnest Business Services (P) Ltd has rightly held that both the tax altogether different and there cannot be any adjustment between them. Section 70 and 71 mandate that the income disclosed in VDIS shall not be included income under section 139 means income which had already been disclosed and that assessment is not liable to be reopened. The petitioner in order to avail the undue benefit of this scheme has filed the belated return by contending that the filing of such belated return is permissible and claimed the deduction of income as well as the refund of the tax. In view of the above, the court is not inclined to interfere with the order dated 29.03.2001 passed by the Commissioner, Income-tax. Hence, Writ Petition is hereby dismissed.
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JUDGEMENT REVIEWED BY SHREYA NIDHI