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TMI Blog2002 (11) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... ; E. Prahalatha Babu v. CIT [2000] 241 ITR 457 (Mad) and CIT v. E. Prahalatha Babu [2001] 249 ITR 309 (Mad), have held that the period is extendable, whereas, on the other hand, the decisions in Kamal Sood v. Union of India [2001] 241 ITR 567 (P H); Vyshnavi Appliances Pvt. Ltd. v. CBDT [2000] 243 ITR 101 (AP); Smt. Atamjit Singh v. CIT [2001] 247 ITR 356 (Karn); K. Dilip Kumar v. Asst. CIT [2001] 247 ITR 16 (Ker); M. Kuppan v. CIT [2001] 249 ITR 543 (Mad); Smt. Atmjit Singh v. CIT [2001] 252 ITR 233 (Karn), have held that the period mentioned for payment of the tax due on the undisclosed income was inflexible. The scheme was introduced by and is contained in the Finance Act, 1997. It came into force with effect from July 1, 1997, and remained in operation till March 31, 1998. Section 64 of the Scheme provides that subject to the provisions of the scheme, where any person makes, on or after the date of commencement of the scheme but on or before the 31st day of December, 1997, a declaration in accordance with the provisions of section 65 in respect of any income chargeable to tax under the Income-tax Act, 1961, for any assessment year in respect of which such person had either ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ases are also different. All of them, however, have contended that the reason for non-payment was beyond their control. The assessees have relied upon those decisions referred to earlier which held that the period mentioned in section 67(1) was extendable. According to the assessees, the purpose of the scheme was to unearth black money which was in circulation. The time fixed under section 67(1) is not rigid according to the assessees, not only because there was express provision for making payment of interest in case of delayed payment but also because the Revenue would be benefited by disclosure of undisclosed income, quick recovery of the same with payment of interest by March 31, 1998 (since the scheme was operative till that date), thus fulfilling the object of the Scheme. It is further submitted that because the Scheme was operative until March 31, 1998, therefore, it was open to a person to file a declaration on the last date, namely, December 31, 1997, and make payment by March 31, 1998, under section 67(1). It would be discriminatory and entirely arbitrary if the persons who had submitted their declarations voluntarily earlier were penalised for doing so by insisting on pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch payment. It is only with a view to dilute the rigidity of this requirement that section 67 allowed the assessee to make payment subsequent to the making of the declaration but subject to making payment of interest at the rate of two per cent. per month up to a period of three months and not further. Apart from the reasoning adopted by the various High Courts in the decisions in favour of the Revenue, it has been contended that the language used in section 67(2) makes it amply clear that the period specified was mandatory. Even if there were any doubt, according to settled principles of interpretation no extension could be granted beyond the period of three months as specified under section 67(1). It has further been submitted that since there were conflicting decisions of the different High Courts there was sufficient cause for the Department to agitate the issue before this court. Finally, it is submitted that as far as the payments made by the assessees were concerned if any payment had been made but not in terms of the Scheme, clearly the Department could not retain such payment and would either have to refund it or set it off in accordance with the prescribed procedures ava ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itions under which the benefit is granted. There is no scope for the application of any equitable consideration when the statutory provisions of the scheme are stated in such plain language. Seen from the angle of the designated authority, which is created under the Scheme, it is clear that the authority cannot act beyond the provisions of the Scheme itself. The power to accept payment under the Scheme has been prescribed by the statute. There is no scope for the Revenue authorities to imply a provision not specifically provided for which would in any way modify the explicit terms of the Scheme. In the decision in Smt. Laxmi Mittal's case [1999] 238 ITR 97 (P H), the High Court had relied upon a circular issued by the Central Board of Direct Taxes under section 119(2)(b) of the Income-tax Act, 1961. The circular has not been brought on record. Assuming that the High Court's reproduction of the contents is correct, all that the circular said was that the date for calculating interest would be 90 days from the date of declaration and if the 90th day happens to be a bank holiday, payment on the 91st day being, the next working day, would be valid. This circular certainly does no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Punjab and Haryana High Court itself would come within the phrase "just cause". The submission of the assessees that this court can dilute the rigour of section 67(2) on the basis of the ratio in Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 (SC) is unacceptable. That was a case which dealt with the imposition of a minimum penalty for failure to carry out a statutory obligation. The court held that such an order imposing penalty is the result of a quasi criminal proceeding and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of the law or acted in conscious disregard of its obligation. Because of its quasi criminal character, the court held that the element of mens rea or bona fides was to be imported which would justify the authority who was competent to impose the penalty to refuse to impose penalty even when the statute provided for a fixed minimum penalty on proof of default. There is no question of imposition of penalty under the Scheme. What has been prescribed under section 67(2) is merely the consequence of the failure to comply with section 67(1). There is as such no question of importing the doc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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