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Issues:
1. Applicability of section 147(a) of the Income-tax Act when disclosure made under Voluntary Disclosure of Income and Wealth Act, 1976. 2. Justification of income computation by the Department for the relevant years. Issue 1: The first issue revolves around the applicability of section 147(a) of the Income-tax Act when an assessee has already made a disclosure of income under the Voluntary Disclosure of Income and Wealth Act, 1976. The court analyzed sections 3 and 8 of the Voluntary Disclosure of Income and Wealth Act, 1976, which outline the conditions under which voluntarily disclosed income is not included in the total income of the declarant for any assessment year. The court noted that the scheme of voluntary disclosure does not act as a bar to reopening assessments under section 147(a) if the disclosure made was not total. If only part of the income was disclosed voluntarily, the authorities are within their rights to issue notices under section 148 for reassessment under section 147. In this case, it was found that the assessee had not fully disclosed all the escaped income but only part of it. Therefore, the court held that the authorities were justified in applying the provisions of section 147 or 148 and reassessing the actual escaped income. Consequently, the court answered the first question in the affirmative, in favor of the Department and against the assessee. Issue 2: The second issue pertains to the justification of the income computation by the Department amounting to Rs.53,054 for the three years under consideration. The court examined the facts and circumstances of the case and concluded that since the assessee had not fully disclosed the entire escaped income but only a part of it under the voluntary disclosure scheme, the authorities were entitled to make a reassessment of the actual escaped income. Therefore, the court found that the income computation by the Department aggregating to Rs.53,054 was justified. Consequently, the court answered the second question in the affirmative, in favor of the Department and against the assessee. In conclusion, the High Court of Allahabad, in its judgment, clarified the applicability of section 147(a) of the Income-tax Act in cases where disclosures are made under the Voluntary Disclosure of Income and Wealth Act, 1976. The court emphasized that partial disclosure under the voluntary scheme does not preclude authorities from initiating reassessment proceedings. The court upheld the reassessment by the Department and found the income computation for the relevant years to be justified based on the circumstances of the case.
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