1982 (4) TMI 125 - AT - Income Tax

Summary

Issues:
1. Whether the HUF's status of the assessee is genuine.
2. Whether the income disclosed by the assessee belonged to the HUF or an individual.
3. Whether the Revenue can go behind the voluntary disclosure made by the assessee.

Analysis:
1. The appeal before the ITAT Chandigarh involved the issue of the genuineness of the HUF's status of the assessee. The assessee, M/s. Harnam Dass & Sons, made a voluntary disclosure under the Voluntary Disclosure of Income & Wealth Act, 1976, declaring income of Rs. 25,000, which was accepted by the CIT. The Revenue contended that the HUF had no source of income prior to the disclosure, challenging the validity of the declaration. The AAC held that once the declaration was accepted and a certificate issued, the Revenue could not question its validity.

2. For the assessment year 1977-78, the ITO treated the income disclosed by the assessee as belonging to Shri Harnam Dass individually, as he believed the HUF had no income. The Revenue argued that even if an HUF existed before the disclosure, the lack of assets meant the declaration was false. The assessee's counsel argued that the ITO's reliance on a statement by Shri Pran Nath was unjustified, as it did not conclusively prove the absence of assets with the HUF. The counsel also cited legal precedent supporting the immunity granted to declarants under the Disclosure Act.

3. The ITAT, after considering the submissions, held that the Revenue had no grounds to interfere with the AAC's order. Referring to legal precedents, including the Supreme Court judgments in various cases, the ITAT emphasized that the income disclosed under the voluntary disclosure was taxable only in the hands of the assessee HUF. Therefore, any investigation into the declared assets was deemed unnecessary, and the AAC's decision was deemed justified. As a result, the appeal of the Revenue was dismissed.