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TMI Blog1980 (3) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... lier assessment years to come forward with voluntary disclosures of the income on which they had not paid tax. In the disclosure, the declarant had to state that a certain amount representing his income had not been charged to tax either under the 1922 Act or the 1961 Act. The details of the income, the manner in which they were held on the date of the declaration as well as the details of the financial year or years in which they had been earned were also expected to be disclosed by the declarant. When such a declaration was filed before the Commissioner, the Commissioner could, in certain cases where he had information that the existence of this income had been detected in the course of assessment proceedings, refuse to accept the declaration as made and could estimate the concealed income. In three cases the declaration was to be accepted. In either event tax was charged on the income declared or the income determined by the Commissioner on the basis that the said sum constituted the total income of the declarant and was liable to tax accordingly at the rates prescribed in the finance Act of 1965. The present assessee appears to have taken indirect advantage of the above scheme. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was contended that since the amounts in question had been taxed under the provisions of the Finance (No. 2) Act of 1965, in the hands of the two sons of the assessee, Surinder Kumar and Narendra Kumar, the question of taxing them again in the hands of the assessee for the assessment year 1962-63 could not arise. The ITO accepted the assessee's contention so far as the cash credit in the name of Smt. Krishna Gautam was concerned. So far as the other two items in the names of the two sons were concerned the ITO summoned and examined the two sons of the assessee. He found that at the relevant time they were minors and were studying in schools and that there was no satisfactory explanation or account as to how they had come to have in their possession such large sums of money. He was, therefore, not satisfied that the cash credits belonged to the two sons despite the fact that they had disclosed the sum as their income in the voluntary disclosures. The ITO, therefore, added the two sums of Rs. 8,000 and Rs. 17,500 as the assessee's income and also disallowed the interest of Rs. 599 credited to the said accounts. This had been confirmed by the AAC and the Appellate Tribunal and at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in Rattan Lal's case [1975] 98 ITR 681. On the other hand, the learned counsel for the department drew our attention to a Full Bench decision of the Allahabad High Court in Pioneer Trading Syndicate's case [1979] 120 ITR 5. In this Full Bench decision, the Allahabad High Court has only reiterated the principles set out in its earlier decision which has already been considered by this court. In these circumstances, we are of the opinion that we are bound to follow the earlier decision of this court in Rattan Lal's case [1975] 98 ITR 681. Mr. M. L. Verma, counsel for the department, invited our attention to two aspects of the facts on which the present case differed from that considered in Rattan Lal's case. The first point made by him was that in the present case we are considering an assessment for the assessment year 1962-63, which related to a point of time prior to the voluntary disclosure whereas Rattan Lal's case was concerned with an assessment in respect of an amount which had been introduced in a third party's books, subsequent to the declaration. It is no doubt true that there is this difference in the facts between the two cases but we are unable to say that this is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This being so, the assessee was entitled to put forward the plea that the amount in question having been already taxed he cannot be taxed thereon once again. It appears to us that there are two different ways of approaching the problem and that the two lines of decisions represent this divergence of approach. On the one hand, it could be urged that in announcing the voluntary disclosure scheme the intention of the legislature was to attract and bring out undisclosed income to the maximum extent possible by offering attractive terms and conditions therefor. The legislature advisedly offered to those who came forward with disclosure that their explanation regarding the sources, etc., would not be investigated and their disclosure would be accepted except to the extent there had been an earlier detection by the department. That apart, the Finance Act also made it clear that the amount brought into the open by the above disclosure would be taxed in the hands of the declarant at the rate appropriate to the amount declared treating it as the total income of the declarant. The legislature could not but have been fully conscious that the result of the above concession would be that the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne has simply to look at the immunity clauses and if it is found that as a result of the language used in the statute the immunity is available only to the declarant and not to others then it should not lie in the mouth of an assessee who has not been frank and who has not come out with a full and fair disclosure to complain of double taxation and the like. The assessee and the declarants, it can be said, took a chance on the statutory language by half-hearted disclosures and cannot complain that the umbrella of immunity is not wide enough to give them shelter. Only the declarant is entitled to the protection provided for and no immunity can be granted to others for whom no such immunity is specifically provided. In this view of the matter, sub-ss. (9), (10) and (11)of s. 24 receive greater emphasis and will be interpreted as conferring an immunity only on the declarant and none else. It will, thus, be seen that the difference of opinion between the Delhi High Court on the one hand and the other decisions referred to on the other is the result of a divergence of approach. Each of the approaches is equally plausible and logical. The Delhi High Court has taken into account the circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had not got delayed till after 1965, the genuineness of the two deposits was bound to arise for determination, and the assessee had hardly any ground to stand on. These cumulative circumstances would tend to bring the present case closer to the facts involved in the Full Bench decision of the Allahabad High Court in Pioneer Trading Syndicate v. CIT [1979] 120 ITR 5 and of the Gujarat High Court in Manilal Gafoorbhai Shah v. CIT [1975] 95 ITR 624. On the other hand the Delhi High Court's decision in the case of Rattan Lal v. ITO [1975] 98 ITR 681 could be treated as somewhat distinguishable as in that case the disclosed amount was introduced for the first time in the assessee's books after the depositor had made the disclosure under the Finance (No. 2) Act of 1965. It need hardly be impressed that voluntary disclosure schemes have been introduced by the Government from time to time in order to enable any person who had in the past enjoyed income and evaded the payment of tax, to make a clean breast of himself. Thereby concealed incomes, which are sometime euphemistically termed as black money, were allowed to be converted into white money on payment of tax prescribed by the schem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were competent to ascertain if in reality the deposits in his books were his own suppressed income. Another significant feature of the scheme under the Finance (No. 2)Act of 1965 was that the Commissioner, before whom the declarations were filed, was not competent to reject them except on the limited ground ofthe income having already come to the notice of the revenue authorities. I have considered it appropriate to make the above observations as there appears some force in the following observations which the Appellate Tribunal has made in its order: " It is well to remember that the declaration was made under a concessional scheme which was introduced to enable assessees to declare their own incomes in their own cases and not to camouflage their income as somebody else's income declared in the hands of somebody else. It is in this context that the plea of double taxation of the same income has to be considered. The scheme did not mean that income should not be taxed in the hands of its real owner just because it was declared by somebody else. It only guaranteed that the declared income will not be taxed twice over in the hands of the declarant." However, as observed by my lea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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