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TMI Blog2019 (8) TMI 936X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner brought it to the respective accounts and added to the capital account as early as 31.03.1994. He has also filed his return of income to that effect. 3. The petitioner states that in the mean while, the Union Budget was presented on 28.02.1997 had introduced the Voluntary Disclosure of Income Scheme,1997, [in short, hereinafter referred to 'VDIS'] which the petitioner is entitle to avail. However, the petitioner submits that he was forced to file return of income as a revised return of income on 08.05.1997 by including the said gift of Rs. 6,00,000/- as his own income. After the VDIS was notified, the petitioner declared Rs. 6,00,000/- as gift under VDIS and the Commissioner of Income Tax, Coimbatore issued certificates under Section 68(2) of VDIS to the petitioner as well as to his two minor children. While that being the case, when the earlier returns filed under Section 143(1) of Income Tax Act for the assessment year 1994-1995 was pending before the second respondent, the said certificates under Section 68(2) of VIDS came to be issued and hence, the Commissioner of Income Tax, Coimbatore has issued a show cause notice seeking to revise the order of assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of VDIS 1997, which came into the effect and notified on 01.07.1997, there is nothing wrong in filing the return under VDIS by disclosing the said Rs. 6,00,000/- received by way of gift as his own income. 9. It is represented on behalf of the petitioner that there is no misrepresentation neither when returns were filed for the financial year 1993-1994 in the assessment year 1994-1995, nor when availing the benefits under VDIS. 10. Apart from agitating the above points, the learned counsel for the petitioner also submitted that if at all the certificates are withdrawn by the 1st respondent, the 1st respondent ought to have refunded the entire amount paid under VDIS, which till date, the 1st respondent has not done so. 11. On the above said grounds, the learned counsel for the petitioner prayed to quash the impugned order passed by the 1st respondent. In support to his arguments, he had relied upon the following Judgments: (i) (1967) AIR 107 (SC) in Ghaurul Hasan and Others V. the State of Rajasthan by the Hon'ble Supreme Court of India. (ii) (1966) 61 ITR 269 (Mad) in Carborundum Universal Limited V. Union of India by the Division Bench of this Court. (iii) (2002) 254 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construction so as to meet his objects. The learned counsel would also contend that the petitioner has availed the VDIS by total misrepresentation of facts and abusing the Scheme. When the petitioner had already declared the income in response to the notice under Section 148, by filing the so-called revised return, the disclosure under VDIS by misrepresenting the facts, the certificates were rightly withdrawn by the 1st respondent, who has jurisdiction to do so. Under these circumstances, the respondents prayed to sustain the impugned order. 16. Heard both the learned counsel appearing for the petitioner as well as the learned counsel for the respondents and perused the materials available on record. 17. It is an admitted fact that the petitioner during the financial year 1993-1994 relevant to the assessment year 1994-1995 filed a return along with Rs. 6,00,000/- added to the capital income accounts which was processed by the 2nd respondent. It is also not in dispute by the petitioner that he had filed a revised return on 08.05.1997 for the return filed on 14.03.1996. Only in the revised return, the petitioner had mentioned about Rs. 2,00,000/- for himself and Rs. 2,00,000/- rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the learned Departmental Representative at the Bench, as to whether such VDIS certificate has been withdrawn. He could not produce any evidence that VDIS certificate has been withdrawn. Therefore, this certificate still remains alive and the assessee shall be entitled to amnesty granted under VDIS, 1997. In this background of the matter, we are of the considered view that the assessee's appeal filed against the order passed u/s 263 should succeed.' 20. In the meanwhile, the 1st respondent had initiated the proceedings by issuing a proper notice to cancel the certificates issued under Section 68(2) of VDIS, 1997 dated 06.01.1998 on the ground that such certificates were obtained by fraud and misrepresentation. It would be appropriate to reproduce Sections 64 and 68 of VDIS and the same is as follows: Section 64 Charge on tax on voluntarily disclosed income - (1) Subject to the provisions of this scheme, where any person makes, on or after the date of commencement of this Scheme but on or before the 31st Dec., 1997 a declaration in accordance with the provisions of S.65 in respect of any income chargeable to tax under the IT Act for any assessment year - (a) for which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i), it is clear that no person can avail the scheme in relation to the income assessable for any assessment year, for which a notice under Sections 142 or 148 of Income Tax Act has been served upon such person and return has not been furnished before the commencement of this scheme. 22. The petitioner, who is fully aware that if a notice under Section 148 of the Income Tax Act has been served upon him, the scheme would not be applicable to him or he cannot avail the benefits of the scheme, had filed his return of income for the assessment year 1994-1995 with the 2nd respondent only on 14.03.1996 belatedly, under Section 139(4) of Income Tax Act and subsequently, a revised return on 08.05.1997 seems to have been served with notice under Section 148 of Income Tax Act. 23. It also clear from the records that the petitioner had appeared before the assessing officer in response to the notice issued under Section 148, which subsequently was dealt with culminating into a final order being passed on 28.03.2001 under Section 263 of Income Tax Act. Thereafter, as against the said order, admittedly, the petitioner had preferred an appeal, which came to be finally decided on 05.10.2007. Whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. '21. Power to issue, to include power to add to, amend, vary or rescind, notifications, orders, rules or bye-laws - Where, by any Central act, or Regulation, a power to issue notifications, orders, rules or bye-law is conferred, then that power includes a power, exercisable in the like manner and subject to the like sanction, and conditions (if any), to add to, amend vary or rescind any notifications, orders, rules or bye-laws so issued'. 27. On a careful reading of the above Section, it is clear that the scope of the Act will apply to any Central Act or Regulation and also to the Constitutions, as it is the Rule of interpretation which has been made applicable to the Constitution in the same manner as it applied to any Central Act or Regulation. No doubt, under the above Act, the power is vested with the authority to make an order which implies a power to revoke or modify or vary that order at any subsequent stages, unless there is a specific bar. 28. On a conjoint reading of Section 68 of VDIS and Section 21 of General Clauses Act, it is clear that the Scheme does not provide for any enquiry or investigation prior to the issuance of certificates under Section 68( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to the previous year can still be declared, and hence it is constitutionally valid, this case on hand pertains to adjustment of amount and declaration itself is not acceptable and not falling under Section 68(1) of VDIS 1997. (iii) (2007) 295 ITR 0136 in M.Srinivasa Rao V. the A.C.I.T., eventhough time limit is not p20rescribed under Section 153(3) of the Act, the impugned proceedings initiated by the respondent after a lapse of 6 years cannot be allowed to continue and the impunged order was quashed. But this case is pertaining to the limitation and applicability to Section 153(3) of the Act has no application to the case on hand. 30. Under these circumstances, this Court is of the view that the petitioner cannot avail the benefits under VDIS, having contravened Section 64(2)(1), and as the notice under Section 148 of the Act was issued on 22.06.1997, which is prior to the notification of VDIS, wherein which the petitioner declared the gifts from NRI amounting to Rs. 6,00,000/- and since there is prohibition under VDIS, that when the amount so declared is already disclosed by the assessee in the return of income filed before the Scheme came into operation, the same canno ..... X X X X Extracts X X X X X X X X Extracts X X X X
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