9911796707
TMI Blog2000 (7) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... alore. On December 30, 1997, the petitioner filed a declaration in the prescribed form under section 64(1) read with section 65 of the Finance Act, 1997, under the Disclosure Scheme, 1997. Under the Disclosure Scheme, 1997, the petitioner has declared his income of Rs. 1,36,42,000. That amount was lying with the Commissioner of Customs, Calcutta. Respondent No. 1 held an open auction sale in respect of diverse materials more particularly specified in the auction list catalogue. Mainly the auction was for mulberry raw silk weighing 9,648 kgs. In the auction sale one Shambhu Pandey has taken part and his bid was the highest, Therefore, the material was sold to Shambhu Pandey. Shambhu Pandey has deposited the amount of Rs. 1,36,42,000 for purchase of that silk. Thereafter one writ was filed challenging that auction sale and that sale proceedings were stayed by this court. Thereafter a request was made by the petitioner that if sale is not possible refund the amount of Rs. 1,36,42,000 which was deposited by Shambhu Pandey, the agent of the appellant. When the Customs Department was not prepared to hand over the silk nor ready to make the refund then a petition was filed for a direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 97. The declaration form was rejected as the appellant could not pay the tax on the amount. In fact, the entire amount was lying with the Commissioner of Customs. Therefore, the tax amount could not be paid. There was no fault on the part of the petitioner/appellant. Therefore, the benefit of the Disclosure Scheme, 1997, should be extended to the appellant/petitioner, He further submitted that once the amount of Rs. 1,36,42,000 was disclosed under the Disclosure Scheme, 1997, there was no need to give direction for notice to assess the tax liability. Learned counsel for the respondent submits that when an authorisation under section 132A of the Act of 1961 has been issued in respect of the amount of the petitioner lying with the Customs Department, thereafter in respect of that amount no disclosure can be made under the Disclosure Scheme, 1997. Therefore, before us the limited question is whether the appellant/petitioner is entitled for the benefit of the Disclosure Scheme, 1997, in respect of the amount Rs. 1,36,42,000 which was lying with respondent No. 1, the Commissioner of Customs. The admitted facts are that the warrant of authorisation under sub-section (1) of section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er or Assistant Director or Assistant Commissioner or Income-tax Officer to enter and search any building, place, vessel, vehicle or aircraft, where he has reason to suspect that such books of account or any document or any money, bullion, jewellery or other valuable articles or things, relating to the undisclosed income, is kept. The authorised officer can break open the lock of any door, box, locker, safe, almirah where the keys thereof are not available. That officer can also search any person who has got out of, or is about to get into, or is in, the building, place, vessel, vehicle or aircraft, and the authorised officer if he has reason to suspect that such person has any such books of account, other documents, money, bullion, jewellery etc., which relates to the income escaping assessment that can be seized during the search and made a note or an inventory of such items. The provisions of section 132A, inter alia, provide for requisition of books of account or assets, etc., where the Director-General or Director or the Chief Commissioner or Commissioner, in consequence of information in his possession, has reason to believe that any assets represent either wholly or part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome assessable for the assessment year for which a notice under section 142 or section 148 of the Income-tax Act has been served upon such person and the return has not been furnished before the commencement of this Scheme. Clause (ii) of sub-section (2) of section 64 of the Finance Act, 1997, further provides that income in respect of the previous year in which a search under section 132 of the Income-tax Act was initiated or requisition under section 132A of the Income-tax Act was made, or survey under section 133A of the Income-tax Act was carried out or in respect of any earlier previous year, the benefit of the Disclosure Scheme, 1997, will not be available. The relevant clause (ii) of sub-section (2) of section 64 of the Finance Act, 1997, reads as under : "64. (2) Nothing contained in sub-section (1) shall apply in relation to--- . . . (ii) the income in respect of the previous year in which a search under section 132 of the Income-tax Act was initiated or requisition, under section 132A of the Income-tax Act was made, or survey under section 133A of the Income-tax Act was carried out or in respect of any earlier previous year." It is manifest from the provision of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant under the Disclosure Scheme, 1997. When the warrant of authorisation was issued prior to the declaration, clause (ii) of sub-section (2) of section 64 of the Finance Act, 1997, prohibits the disclosure of such income under the Disclosure Scheme, 1997. Therefore, from the aforesaid discussion we are of the view that the appellant is not entitled to the benefit of the Disclosure Scheme, 1997, on the amount of Rs. 1,36,42,000 which was never subject to tax. When the amount cannot be taxed under the Disclosure Scheme, 1997, the amount has to be taxed under the provisions of the Act of 1961 as income of the assessee. That can be assessed only after notice to the assessee/appellant. Therefore, in view of these facts if income is assessed after notice to the assessee there is nothing wrong in the notice. Even if he has any grievance against the assessment made, he can challenge that assessment order in appeal. In the memo of appeal the appellant has also challenged the penalty proceedings under section 271(1)(c) of the Act of 1961. If the concerned officer found that there is concealed income, in that case it is always open to the officer to initiate penalty for concea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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