9911796707
TMI Blog1978 (12) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... Income and Wealth Act, 1976. The assessees who were subjected to a search were given certain concessions in these statutes. Taking advantage of the same assessee made a voluntary disclosure of their income on 11th Nov., 1975. The income disclosed covered a period of 1968-69 to 1975-76 asst. yrs. In respect of the 1974-75 year we are concerned with the additional income disclosed at Rs. 30,165. 2. On his return of income of Rs. 24,240 the assessee had paid tax under s. 140-A fully that is Rs. 5,975. By this voluntary disclosure the income for 1974-75 would amount to Rs. 24,240 + 30,165 that is Rs. 54,405. A revised return was filed showing this income. The tax payable as per revised return would be Rs. 27,692. Since Rs. 5,975 was already ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave an immunity to the assessee against penalty in respect of income disclosed therein. This contention was rejected by the IAC because the tax payable was a deficit of Rs. 5,565. It was immaterial according to the IAC whether the shortfall was due to a mistake or not. He levied a penalty of Rs. 30,165. 6. Sri Sivaram, learned counsel for the assessee, submitted that the IAC overlooked the amendment brought about by the Finance Act (2) of 1977 to s.14 of the Voluntary Disclosure Act. By this amendment the immunity against levy of concealment penalty would continue to be available to an assessee, even if a part of the tax payable is outstanding, provided that the outstanding tax and the interest thereon is paid before 1st Jan., 1978. Sri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d out that interest at 12 per cent, as provided in the amendment, must be paid from 1st April, 1976 to the date of payment. That interest remains unpaid. What has been paid on 8th March, 1977 was not interest as per these amended provisions. What has paid was interest under s. 220 calculated on the outstanding amount of Rs. 5,309 (which is a different figure) as per ITO's order dt. 21st Feb., 1977. That interest is leviable statutorily under the IT Act itself and it has nothing to do with the interest mentioned in the amended provisions. This benefit of immunity is statutory and unless the provisions are fully complied with, the assessee cannot succeed in warding off the penalty. 9. It is necessary to make a study of the provisions of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn by including the amount disclosed under the Voluntary Disclosure Act. If the tax as required under sub-s. (5) is paid, the assessee is given certain immunities which are shown in sub-s. (1) of s. 14. cl. (iii) of this sub-s. States that there will not be any penalty proceedings for concealment in respect of such income. 10. It would be seen therefrom that the tax which is payable under the Voluntary Disclosure Act would get merged with the regular tax which is payable in respect of the income returned by the provisions of the IT Act itself. Except the four immunities shown in s.14 there is no bar in respect of any other proceedings. So reading s.14 along with the rest of the sections in the Voluntary Disclosure Act it would be clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income with the demand raised in the regular assessment proceedings. The tax on the voluntarily disclosed income has lost its identity. It is part of the tax payable. On such tax payable the ITO has levied interest under s. 220. This interest amounts to Rs. 809. This has also been paid. Under these circumstances the question would arise whether apart from the payment of interest as required by the ITO by his order dt. 21st Feb., 1977 has the assessee to pay any further interest. In our opinion he does not have to. Firstly because as we have stated there is no separate demand in respect of the voluntarily disclosed income which has been included in the assessment. The provisions regarding payment of interest obviously refer to cases where t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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