1987 (7) TMI 177 - AT - Income Tax

Summary

Issues:
Assessment year determination under Voluntary Disclosure Scheme

Analysis:
The case involves an appeal by the Revenue related to the assessment year 1976-77. The assessee voluntarily disclosed income under the Voluntary Disclosure of Income and Wealth Act, 1976. The assessee declared income of Rs. 25,000, tax paid of Rs. 6,250, and a security deposit of Rs. 1,250. The issue arose when the assessment year for the disclosed income was not mentioned in the initial declaration, leading to confusion later on. The Income Tax Officer (ITO) issued a notice under sec. 148, and the assessee filed a return, which was deemed invalid by the Commissioner. The Income Tax Officer reassessed the income for 1976-77, but the assessee appealed, arguing that the disclosure related to an earlier year. The Appellate Authority deleted the addition, stating that the disclosure could not be for 1976-77 as it was made before the deadline for filing returns for that year.

The Revenue appealed the decision, presenting evidence that the assessment year mentioned in the declaration was 1976-77. The relevant section of the Voluntary Disclosure Act, 1976 outlined the conditions for declaring income that had escaped assessment. The Tribunal analyzed the evidence and concluded that the disclosure must relate to a year prior to 1976-77, based on the statutory provisions, the purpose of the Act, and the timeline for making declarations. The Tribunal held that the disclosed amount of Rs. 25,000 was not assessable for 1976-77 and was covered by the Disclosure Act. The tax paid under the scheme was adjusted against the demand for 1976-77, and the Revenue's appeal was dismissed.

In summary, the case revolved around determining the correct assessment year for income disclosed under the Voluntary Disclosure Scheme. The Tribunal clarified that the disclosure made before the deadline for filing returns for 1976-77 could not pertain to that year. The decision emphasized adherence to statutory provisions and the timeline for disclosures under the Act, ultimately ruling in favor of the assessee and dismissing the Revenue's appeal.