Credit of the amount declared u/s 3(1), VD Act 1976. - Income Tax - 919/CBDT

INSTRUCTION NO. 919/CBDT Dated : February 10, 1976 Section(s) Referred: 3 Statute : VD Act 1976 Clarifications in respect of some further points raised by the Commissioners are given hereunder:- (1) Question- In respect of a declaration made u/s 3(1) the declarant has to send an intimation to the Income-tax Officer regarding the credit of the amount declared in his books of account or any other record. Can the Income-tax records, say, in the Assessment Folder or should he keep it in his personal custody? Answer-A confidential register should be maintained by each Income-tax Officer giving the particulars of such intimations received by him. The individual intimations should be kept in separate confidential folders, declarant-wise, with requisite entries on the order sheet of the confidential folder under that dated initials of the Income-tax Officer. The Register and the folders should remain in the Income-tax Officer's personal custody. 2. Question- What record should be kept by the Income-tax Officer if an item of income is left out of computation of total income by him while completing an assessment/re-assessment because it is covered by a declaration u/s 3(1)? Answer-A confidential note should be made below the assessment order to indicate that part of income of the year is covered by a declaration u/s 3(1) and has, as a result, been excluded in the computation of that income and the particulars thereof are available in the separate confidential folder maintained for the purpose. A note under the Income-tax Officer's signature giving particulars of the income some excluded should be placed in the confidential folder referred to in answer to question (1) above; necessary entry under the ITO's dated initials being made on that folder's order sheet. 3. Question- Is any verification envisaged at the time of issuing a certificate u/s 8(2)? Answer- It has been clarified in para 2 of the Board's Instruction No. 902 dated 3rd December, 1975 that the certificate to be issued u/s 8(2) is a certificate giving factual information, as per the declaration, and is to be issued only after the full amount of income-tax has been paid and the requisite amount invested in the notified Government securities. When a claim is made before an Income-tax officer that a particular item of income sought to be assessed is covered by a declaration u/s 3(1), the I.T.O. will satisfy himself as to the admissibility of the claim. If the amount is covered by a valid declaration u/s 3(1), he will leave it out of the computation of total income. 4. Question- Will investment in approved Government securities after the lapse of 30 days from the date of declaration and /or payment of tax beyond the time allowed by the Commissioner invalidate the declaration? Answer- No. 5. Question- Whether it is necessary to initiate proceedings for assessment or re-assessment to cover income/wealth declared u/s 14(1)/15(1)? What about assessment years beyond the time bar? Answer- A declaration u/s 14(1) may relate to an assessment year for which- (a) No assessment proceedings have been initiated so far; (b) Proceedings were initiated and return was filed before the commencement of the Ordinance, and the assessment is pending; (c) An assessment was made some time in the past but it has been set aside in appeal or revision; (d) An assessment has been completed before the commencement of the ordinance without including the income now declared and it has become final. As regards cases falling under (b) and (c), the income declared may be taken into account while making the assessment or fresh assessment, as the case may be, and credit given for tax paid as contemplated in section 14(6). In respect of cases falling under (a) and (d), action may be taken to initiate proceedings for assessment or re-assessment, as the case may be, of the amount declared, in so far as it is permissible under the law. Even for the assessment years for which it is not possible to initiate proceedings because of the time bar, the declarant will remain entitled to the immunities available under the Act, provided he has satisfied the prescribed conditions. The above position will apply, mutatis mutandis, in respect of declarations made u/s 15(1). It may be pointed out that if on due enquiry, the I.T.O. finds that the income declared pertains to an assessment year other than that mentioned in declaration, it will be open to him to assess it in the appropriate assessment year. In this connection, reference may be made to item (xii) of the Board's Circular No. 181 dated 25th October, 1975.