2019 (8) TMI 936 - HC - Income Tax

Revocation of certificates issued u/s 68(2) of VDIS - misrepresentation of Facts - revoked after a long gap of 10 years - HELD THAT - The scope of the Act will apply to any Central Act or Regulation and also to the Constitutions, as it is the Rule of interpretation which has been made applicable to the Constitution in the same manner as it applied to any Central Act or Regulation. No doubt, under the above Act, the power is vested with the authority to make an order which implies a power to revoke or modify or vary that order at any subsequent stages, unless there is a specific bar. On a conjoint reading of Section 68 of VDIS and Section 21 of General Clauses Act, it is clear that the Scheme does not provide for any enquiry or investigation prior to the issuance of certificates u/s 68(2) of VDIS, when that being so, the only remedy available for the respondents is to avail Section 21 of General Clauses Act, which is a General application and the Rule of construction that can be applied to statute does not provide any assistance for reasonable construction, so as to meet its object. This Court has no hesitation to reject the argument of the learned counsel appearing for the petitioner, as the authority has jurisdiction to invoke Section 21 of the General Clauses Act to withdraw or revoke the certificates issued Section 68(2) of VDIS. This Court is of the view that the petitioner cannot avail the benefits under VDIS, having contravened Section 64(2)(1), and as the notice u/s 148 was issued on 22.06.1997, which is prior to the notification of VDIS, wherein which the petitioner declared the gifts from NRI amounting to ₹ 6,00,000/- and since there is prohibition under VDIS, that when the amount so declared is already disclosed by the assessee in the return of income filed before the Scheme came into operation, the same cannot be stated once again by way of revised return of income. Order passed by the 1st respondent is well found and the petitioner has misrepresented before the authority to avail the benefits under the Scheme VDIS by suppressing the declaration made in the returns filed prior to the notification of VDIS. Hence the Writ Petition is dismissed.

Summary

Issues Involved:
1. Jurisdiction to revoke certificates under Section 68(2) of VDIS using Section 21 of the General Clauses Act.
2. Validity of the petitioner's declaration under VDIS.
3. Alleged misrepresentation of facts by the petitioner.
4. Delay and laches in revoking the certificates.
5. Refund of the amount paid under VDIS if certificates are revoked.

Issue-wise Detailed Analysis:

1. Jurisdiction to Revoke Certificates under Section 68(2) of VDIS Using Section 21 of the General Clauses Act:
The petitioner argued that the first respondent lacked jurisdiction to revoke the certificates issued under Section 68(2) of VDIS by invoking Section 21 of the General Clauses Act. The court, however, held that Section 21 of the General Clauses Act, which allows the power to rescind notifications, orders, rules, or bye-laws, is applicable. The court noted that the VDIS scheme does not provide for any inquiry or investigation before issuing certificates. Therefore, the only remedy available for the respondents was to invoke Section 21, which is of general application and can be applied when a statute does not provide any assistance for reasonable construction to meet its object.

2. Validity of the Petitioner's Declaration under VDIS:
The petitioner declared ?6,00,000 as income under VDIS, claiming it was received as a gift from an NRI. The court found that the petitioner had already disclosed this amount in a return filed on 14.03.1996, and thus, it could not be declared again under VDIS. The court emphasized that Section 64(2)(i) of VDIS prohibits availing the scheme for income assessable for any assessment year for which a notice under Sections 142 or 148 of the Income Tax Act has been served prior to the commencement of the scheme. Since the petitioner had received a notice under Section 148 before the VDIS notification, he was not eligible for the scheme.

3. Alleged Misrepresentation of Facts by the Petitioner:
The court found that the petitioner had misrepresented facts by declaring the ?6,00,000 as his own income under VDIS, contradicting his original return where he declared it as a gift received from an NRI. The court noted that the petitioner had suppressed the earlier return filed on 14.03.1996 and filed a revised return on 08.05.1997, which was not permissible under the scheme.

4. Delay and Laches in Revoking the Certificates:
The petitioner contended that the first respondent had no jurisdiction to revoke the certificates after a long gap of 10 years. The court rejected this argument, stating that the proceedings initiated by the first respondent to revoke the certificates were based on the ground of misrepresentation by the petitioner. The court held that the delay in revoking the certificates did not invalidate the action taken by the first respondent.

5. Refund of the Amount Paid under VDIS if Certificates are Revoked:
The petitioner argued that if the certificates were withdrawn, the first respondent should refund the entire amount paid under VDIS. The court did not find this argument relevant to the case at hand, as the primary issue was the validity of the certificates issued under VDIS and the jurisdiction to revoke them.

Conclusion:
The court concluded that the petitioner could not avail the benefits under VDIS, having contravened Section 64(2)(i) of the scheme. The court found that the petitioner had misrepresented facts and suppressed the declaration made in the returns filed prior to the notification of VDIS. Consequently, the writ petition was dismissed, and the order passed by the first respondent to revoke the certificates was upheld.