Disclosure of income. - Income Tax - 1246/CBDT

INSTRUCTION NO. 1246/CBDT Dated : April 6, 1979 Section(s) Referred: 3(1) Statute: Income - Tax Act, 1961 In the declarations in respect of the voluntarily disclosed income under section 3(1) of the Voluntary Disclosure of Income and Wealth Ordinance 1975 (now, Voluntary Disclosure of Income and Wealth Act, 1976) were to be made in Form 'A' the declarant was required to indicate respectively the amount of income declared and the assessment year(s) to which the income related. Where the voluntarily disclosed income related to more than one assessment year, income in respect of each assessment year was required, if possible, to be indicated separately (vide the relevant foot note in Form A ). Thus, the position was that if for any reason, it was not possible for the declarant to give the year-vise break up, he had to indicate the block of assessment years to which the income related. While explaining the provisions of section 3 of the Ordinance, it was clarified in para 6 of the Board Circular *180 (F.No.131/19/75-TPL), dated 15th October, 1975 that subject to the prescribed conditions being fulfilled, a person could declare u/s 3(1) his income liable to tax for any assessment year upto and including the assessment year 1975-76. 2. It has come to the Board's notice that in respect of a number of declarations made under section 3(1), column 5(3) of the Form A was not properly filled in at the time of making the declaration. A number of declarants are reported to have either left this column blank or stated as under :- (i) Past several years. (ii) Last ten years. (iii) All preceding years upto and inclusive of date of declaration. (iv) Many years. (v) 1975-76 onwards. (vi) Earned from time to time/year to year. (vii) Year-wise break-up not possible etc. The Receipt Audit is reported to have taken the view that as the declarations were made during the period October-December, 1975 such statements imply that part of concealed income declared relates to the assessment year 1976-77 and should be assessed to income-tax and wealth-tax in the normal course. 3. It has been decided that in cases of the above type, it should be pointed out to the declarant that under the Voluntary Dilsclosure Scheme only the income for and upto the assessment year 1975-76 could be declared and he was required to fill the declaration in form 'A' correctly and completely. He may be advised to file an affidavit in his own interest indicating whether any income relating to a later assessment year is included in the income disclosed and if so the amount thereof and the assessment year(s) to which it relates. As the income relating to the assessment year 1976-77 onwards would fall outside the ambit of the Voluntary Disclosure of Income and Wealth Act, 1976, action should be taken to assess it to income-tax (and wealth-tax, if necessary) in the normal manner without any avoidable delay. 4. A number of instances were pointed out in para 47.3(vi) of the C AG's Report for the year 1976-77, in which although the assessment years to which the income declared relates to have been mentioned in column 5(3) of Form 'A', portion of the income declared is shown as relating to the assessment year 1976-77 and /or 1977-78 or even to 1976-77 and later years. The Board feel that a declarant might have shown this in the following circumstances: (a) by sheer inadvertance not realising that the Ordinance did not cover any assessment year beyond the assessment 1975-76. (b) if he had a source which yielded regular income from year to year including the previous year(s) relevant to the assessment year 1976-77 and /or 1977-78. (c) if he had acquired an asset after 1.4.1976, and he would have to account for income out of which the asset had been acquired when his assessment for the appropriate assessment year would be taken up. In such cases also unless on consideration of all the attendant circumstances including the assets representing the declared income, the Commissioner comes to a conclusion that a particular case is one of genuine error and the assessee in fact intended to declare income only for and upto the assessment year 1975-76, remedial action to bring to tax the income relating to assessment year 1976-77 and /or 1977-78 should be taken without any further delay if it has not already been done. If the mention of the above assessment year(s) is represented as due to the sheer inadvertance an affidavit to this should be obtained mentioning therein the correct assessment year. In this connection, reference may be made to para (2) of the Board's F.No.411/5/78-IT(Inv.,) dated the 9th March, 1978 wherein Commissioners were advised to review such cases carefully and to take remedial action well in time as also to report full particulars of the individual cases, where similar mistakes were noticed, to the Director of Inspection (Income-tax Audit). This was reiterated in para 2(i) of the Directorate of Inspection (Income-tax) F.No. 9/78-79/DIT. It is understood that the Directorate has not received complete information in this regard from all the Charges. This may now be furnished without further delay indicating the remedial action taken in each case. 5. It is evident that on the prescribed conditions being fulfilled, a certificate under section 8(2) of the Voluntary Disclosure of Income Wealth Act, 1976 can be issued only in regard to the income disclosed for and upto the assessment year 1975-76 falling within the ambit of the Voluntary Disclosure Scheme, 1975-76.