Effect of higher income estimates/shown for assessment year 1986-87, in relation to assessment for later years-Clarification regarding - Income Tax - 453/1986

Effect of higher income estimates/shown for assessment year 1986-87, in relation to assessment for later years-Clarification regarding Circular No.453 Dated 4/4/1986 Taxpayers are aware that the "amnesty" offered by the Government in terms of the following circulars expired on March 31, 1986. Circular No. 423 dated 26-6-1985 : See [1985] 155 ITR (St.) 45. Circular No. 432 dated 15-11-1985 : See [1985] 156 ITR (St.) 162. Circular No. 439 dated 15-11-1985 : See [1985] 156 ITR (St.) 163. Circular No. 440 dated 15-11-1985 : See [1985] 156 ITR (St.) 164. Circular No. 441 dated 15-11-1985 : See [1985] 156 ITR (St.) 165. Circular No. 451 dated 17-2-1986 : See [1986] 158 ITR (St.) 135. There have been numerous requests from various parts of the country for extending the time-limit a little longer. It has also been pointed out that there were several closed holidays in the last week of March. Further, in States like Punjab, most of the towns were under curfew, thereby disrupting normal civic life. The response to the "amnesty" offer has been very good indicating a desire on the part of many people who have hitherto concealed their income to turn over a new leaf. In view of all this, it has been decided to extend the benefit of the "amnesty" circulars, referred to above, till September 30, 1986, in cases where the assessee wants to disclose income or wealth relating to the assessment year 1986-87 or earlier. 2. So far as the assessment year 1986-87 is concerned, the disclosure of the true income and wealth in the income-tax and wealth-tax returns and the prompt payment of taxes due on the same under section 140A of the Income-tax Act and/or section 15B of the Wealth-tax Act will entitle the taxpayer to immunity from penalty and prosecution. It may be noted that where the return for 1986-87 is not filed on the date on which it is due under section 139(1) of the Income-tax Act/or section 14(1) of the Wealth-tax Act, the immunity will not extend to the penal consequences of the late filing of such return.