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Issues Involved:
1. Meaning of the word "voluntarily" in section 273A of the Income-tax Act, 1961, and section 18B of the Wealth-tax Act, 1957. 2. Whether a disclosure subsequent to search and seizure is necessarily a non-voluntary disclosure. Summary: Issue 1: Meaning of "Voluntarily" in Section 273A and Section 18B The court examined the meaning of "voluntarily" in the context of section 273A of the Income-tax Act and section 18B of the Wealth-tax Act. The term "voluntarily" means out of free will without any compulsion. The court referred to various judgments to elucidate this meaning: - In Mool Chand Mahesh Chand v. CIT [1978] 115 ITR 1 (All), it was held that disclosure made after the concealed income was detected and enquiry was being made cannot be said to be voluntary. - In Jakhodia Brothers v. CIT [1978] 115 ITR 61, it was held that disclosure during the pendency of assessment proceedings can still be voluntary if not made due to compulsion. - In Hakam Singh v. CIT [1980] 124 ITR 228, it was held that disclosure after books of account were seized in a raid is not voluntary as it was made under constraint. - The Kerala High Court in A. V. Joy Alukkas Jewellery v. CIT [1990] 185 ITR 638 stated that "voluntarily" means without compulsion and that each case must be examined individually. - The Bombay High Court in Natwarlal Joitram Raval v. CIT [1993] 115 CTR 518 agreed that each case must be examined to determine if the disclosure was voluntary, particularly if it was made due to seizure of incriminating material. - The Andhra Pradesh High Court in Sujatha Rubbers v. ITO [1992] 194 ITR 355 emphasized that the Commissioner must have material to infer that the return was filed to avoid adverse action. - The Supreme Court in Tribhovandas Bhimji Zaveri v. Union of India [1993] 204 ITR 368 held that a declaration made after seizure of books or assets is not voluntary as it is made due to impending exposure. Issue 2: Disclosure Subsequent to Search and Seizure The court concluded that as a principle of law, it cannot be held that disclosure of concealed income after a raid or search is non-voluntary. This determination must be made on a case-by-case basis: - If the Department has incriminating material regarding the disclosed income, the disclosure is not voluntary. - If the Department lacks incriminating material regarding the disclosed income, the disclosure is voluntary even if made after a raid/search. - If an assessee discloses income related to accounts for which the Department has no incriminating material, such disclosure is voluntary. Conclusion: 1. The word "voluntarily" in section 273A means out of free will without any compulsion. 2. Disclosure of concealed income after a raid/search can be voluntary depending on whether the Department has incriminating material regarding the disclosed income. 3. The same principles apply to section 18B of the Wealth-tax Act. The petitions will be placed before the appropriate Bench for further decision in accordance with the law.
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