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TMI Blog1997 (11) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-s. (1) of s. 64 of the Act (Chapter IV) 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 31st of Dec., 1997, a declaration in accordance with the provisions of s. 65 in respect of any income chargeable to tax under the Act for any assessment year-(a) for which he has failed to furnish a return under s. 139 of the Act; (b) which he has failed to disclose in a return of income furnished by him under the Act before the date of commencement of the Scheme; (c) which has escaped assessment by reason of the omission or failure on the part of such person to make a return under the Act or to disclose fully and truly all material facts necessary for his assessment or otherwise, then notwithstanding anything contained in the Act or in any Finance Act, income-tax shall be charged in respect of the income so declared at the rates specified in the said provisions. However, sub-s. (2) of s. 64 makes sub-s. (1) of s. 64 of the Act inapplicable under two conditions and set out in sub-cls. (i) and (ii) of sub-s. (2). In these petitions we are concerned with cl. (ii) of sub-s. (2) of s. 64 of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ace in any financial year, persons cannot make a declaration in respect of income of any year prior to the previous year in which search has taken place, such persons are not eligible for the benefit of the Scheme only in respect of the income of the previous year of search, runs counter to the plain reading of cl. (ii) of sub-s. (2) of s. 64 of the Act and, therefore, it must be held that even in cases where search has taken place as provided under s. 132 of the Act, such persons are entitled for the benefit of the Act in respect of the income of all the previous years except for the year prior to the year of search. (b) Secondly, he submitted that if the provisions contained in cl. (ii) of sub-s. (2) of s. 64 of the Act is to be understood as denying the benefit of the Scheme to such of those persons who fall under ss. 132 and 132A of the Act in toto i.e., in respect of the income of the previous year of the search, the same is the position even in respect of the cases which fall under s. 133A of the Act; and under these circumstances, by means of circulars, referred to above, issued by the CBDT, the persons, who fall under s. 133A of the Act, cannot be picked up for preferent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) of sub-s. (2) of s. 64 of the Act is not discriminatory in nature or violative of the rights guaranteed to the petitioners under Art. 14 of the Constitution of India. He points out that ss. 132, 132A and 133A are provided for three different things, and objects and purposes of the said three provisions are quite distinct and different. He points out that the plain reading of s. 132 shows that the power of search and seizure is conferred on the officers in certain circumstances and s. 132A provides for issue of a requisition under the Act calling upon any officer or authority to deliver such books of account, other documents or assets to the requisitioning officer, and s. 133A relates to power of survey to be carried out by the officers of the IT Department. Therefore, he would submit that the survey carried out is not as stringent, or the consequences are not as serious as a search made under s. 132 or the requisition made under s. 132A of the Act. Therefore, he points out that in this background, if the Circulars dt. 10th June, 1997 and 25th July, 1997, have been issued, on grievance and on that basis, cl. (ii) of sub-s. (2) of s. 64 of the Act cannot be declared as unconstit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of search. The plain reading of cl. (ii) of sub-s. (2) of s. 64 of the Act, in my view, disentitles the benefits of the scheme to all the cases falling under ss. 132, 132A and 133A of the Act not only for the previous year of the search, requisition or the survey held as provided under ss. 132, 132A or 133A of the Act respectively, and also in respect of any earlier previous years prior to the year in which the search, requisition or survey is held. Therefore, I do not find any merit in the first submission of Shri Sarangan. 6(a) In the light of the above discussion, merely on the ground that the circular issued by the CBDT clarifies that the persons falling under s. 133A of the Act are denied of the relief of the scheme only for the previous year of the survey, and in respect of cases falling under ss. 132 and 132A of the Act, the benefit of the scheme is deprived for all the years, it is not possible to hold that the impugned provision is unconstitutional on the ground that it is either arbitrary or discriminatory or violative of the right guaranteed to the petitioners under Art. 14 of the Constitution of India. The constitutional validity of the impugned provisions cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not permissible for the Courts to direct the authorities, who are administering the Act, to do contrary to the mandate of the provisions contained in the Act. In that view of the matter, I have no hesitation to reject the second submission of Sri Sarangan that cl. (ii) of sub-s. (2) of s. 64 of the Act is liable to be declared as unconstitutional as the effect of the circular is to make the impugned provision discriminatory. 7. Now, the only other contention of Sri Sarangan that requires to be considered, is as to whether the impugned provision is liable to be declared as unconstitutional on the ground that the classification of persons who were searched under s. 132 of the Act and forbidding them from availing the benefit of filing declaration under the scheme, is not based on any intelligible differentia which distinguishes such persons from the rest and the differentia brought has no rational relationship or nexus with the objectives sought to be achieved. 8. It cannot be disputed that the scheme introduced is an enabling provision where an opportunity is given to the persons, who have not disclosed their income earlier and who are made liable for levy of penalty and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound that there is another set of tax evaders, who are given the benefit of the Scheme. In what manner and which type of tax evaders in public interest and in the interest of the State revenue, they should be given relief, is essentially for the State to decide. It is a matter of legislative policy. The Court cannot sit in judgment over such legislative policy. Further, it is also necessary to notice that the Scheme will be in operation till 31st of Dec., 1997. In that situation, if the object of the Scheme is to compel a large number of tax evaders to take the benefit of the Scheme, thereby to minimise the quantity of unaccounted money in the country and to secure huge money to the Revenue, and in that situation, if a tax evader is exposed to the threat of search and seizure, requisition or survey as provided under ss. 132, 132A and 133A of the Act and also the denial of the benefit of the Scheme, in my view, the provisions captained in cl. (ii) of sub-s. (2) of s.64 of the Act is more in furtherance of achieving the object of the Scheme. In other words, such a provision would compel more and more persons to avail of the benefit of the Scheme at the earliest point of time than bei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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