9911796707
TMI Blog1971 (5) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... ty on the amount so disclosed on a concessional basis. This section was given retrospective effect from 1st March, 1965. Such a scheme was there already; and the above section was enacted to give legislative sanction for the same. It may be sufficient for the purpose of this case to read only sub-sections (1), (2) and (3) of section 68 : " 68. Voluntary disclosure of income.- (1) Where any person makes a declaration in accordance with sub-section (2) in respect of the amount representing income- (a) which he has failed to disclose in a return of income for any assessment year filed by him before the 1st day of March, 1965, under the Indian Income-tax Act, 1921, or the Income-tax Act, 1961, or (b) which has escaped assessment for an as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll information in respect of the following matters, namely :- (a) Whether he was assessed to income-tax or not; and, if assessed, the name of the income-tax circle in which he was assessed. (b) The amount of income declared, giving where available, details of the financial year or years in which the income was earned and the amount pertaining to each such year. (c) Whether the amount declared is represented by cash (including bank deposits), bullion, investments in shares, debts due. from other persons, commodities, or any other assets, and the name in which it is held and location thereof : Provided that the declaration shall be of no effect unless it is made after the 28th day of February, 1965, and before the 1st day of June, 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 68 of the Finance Act, 1965 ; and there was no dispute that the petitioners are liable for reassessment on that basis. But they claimed that the whole amount of income attributed to an assessment year was not net wealth which escaped assessment for that year the net wealth was only the said amount less the amount of income-tax payable under the Income-tax Act, 1961, in respect of the said amount. The argument may be illustrated with reference to one of the assessment years for the sake of clarity. The income attributed by the petitioner in O.P. No. 1511 for the assessment year 1962-63, in the declaration under section 68 of the Finance Act, 1965, was Rs. 1,85,250, as already stated. The Wealth-tax Officer proposed to reassess the said am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s they did not allow the deduction claimed by the petitioners on account of income-tax in determining the net wealth. It is necessary to refer to some of the provisions of the Wealth-tax Act in order to appreciate the petitioners contention. Section 3 is the charging section ; and it provides that there shall be charged for every assessment year commencing on and from 1st April, 1957, a tax in respect of the net wealth on the corresponding valuation date of every individual, Hindu undivided family or company at the rate or rates specified in the Schedule. Assessment year is defined in section 2(d) as the period of twelve months commencing on the 1st day of April every year. "Valuation date" is defined in section 2(q) as the last day of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be deducted from the income disclosed for each year for determining the net wealth, which escaped assessment. He submits that the liability for income-tax arises during the course of the previous year or at least on the last day of the previous year, even if the Finance Act which fixes the rate of income-tax for the previous year has been and that the said liability is a debt though it has not assessed and quantified. This proposition is well-established by the decision the Supreme Court in Kesoram industries and Cotton Mills Ltd. v. Commissioner of Wealth-tax. Counsel for the petitioners then contends that what the petitioners paid under the voluntary disclosure scheme envisaged by section 68 of the Finance Act 1965, was really income- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anding on that date. Under the disclosure scheme, the assessee is protected from assessment on the disclosed income under the relevant Income-tax Act. If the assessee, after making the disclosure, does not comply with the conditions of section 68 of the Finance Act, 1965, and avail of the concession thereunder, he would be assessed in respect of that income for the relevant assessment years under the relevant Income-tax Act. If he did not make any disclosure at all, the undisclosed income may be discovered and assessed in accordance with the relevant Income-tax Act. In both these circumstances, different considerations arise ; the tax liability arises in respect of the income so assessed on the last date of the previous year to which the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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