2008 (6) TMI 359 - HC - Income Tax

Voluntary Disclosure of Income Scheme 1997 (VDIS) - respondent authority in not issuing certificate of the full amount disclosed under the VDIS - petitioner has made the following principal prayers (a) to command to the respondent to issue to the petitioner cer-tificate of the full amount accepting the declaration made by the peti-tioner under the Voluntary Disclosure of Income Scheme 1997 at annexure B hereto ; or In the alternative (b) to command to the respondent to refund and/or permit adjust-ment of the amount of Rs. 7, 42, 000 paid by the petitioner under the Voluntary Disclosure of Income Scheme 1997 if it is found as not covered under the Scheme - Held that - assessees are not entitled to the benefit of the Scheme since the payments made by them were not in terms of the Scheme we direct the Revenue authorities to refund or adjust the amounts already deposited by the assessees in purported compliance with the provisions of the Scheme to the concerned assessees in accordance with law - respondent authority is directed to either refund or adjust the amount already deposited by the assessee to the tune of Rs. 7, 42, 000 in accordance with the directions issued by the apex court

Summary

Issues:
Challenge to non-issuance of certificate under VDIS and non-refund of amount paid as tax and interest.

Analysis:
The petitioner challenged the respondent authority's refusal to issue a certificate for the full amount disclosed under the Voluntary Disclosure of Income Scheme, 1997 (VDIS). It was also contested that the sum of Rs. 7,42,000 paid as tax and interest under VDIS was not refunded. The Supreme Court's decision in Hemalatha Gargya v. CIT [2003] 259 ITR 1 was cited as relevant to the case, establishing a precedent on the matter.

The petitioner declared an income of Rs. 34,50,000, with a total tax payable amounting to Rs. 10,77,000 under VDIS. Initially, Rs. 3,35,000 was paid towards tax on December 8, 1997, while the remaining Rs. 7,00,000 for tax and Rs. 42,000 for interest were paid on March 26, 1998, which was beyond the statutory three-month period from the declaration date. Consequently, the respondent authority accepted the declaration only in relation to the income corresponding to the tax paid initially.

The petitioner sought two principal reliefs: firstly, for the respondent to issue a certificate for the full disclosed amount under VDIS, and alternatively, to refund or allow adjustment of the Rs. 7,42,000 paid if it was not covered under the scheme. The court, in light of the apex court's decision, concluded that the first prayer could not be granted. However, following the precedent set in Hemalatha Gargya v. CIT [2003] 259 ITR 1, the respondent authority was directed to refund or adjust the deposited amount of Rs. 7,42,000 in accordance with the law.

Consequently, the petition was partly allowed, with the respondent authority instructed to comply with the directions issued by the apex court regarding the refund or adjustment of the deposited amount. The ruling was made without any order as to costs, bringing the matter to a resolution.