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TMI Blog1979 (7) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee went up in appeal. The AAC reduced the addition by Rs. 3,000 in respect of the credit entries in favour of Sri Jagat Ram. The addition of the balance was upheld. The assessee then went up to the Tribunal in appeal. On behalf of the assessee, it was reiterated before the Tribunal that all the three creditors had made disclosures before the CIT under the Finance (No. 2) Act, 1965, of the following amounts : Rs. (i) Sri Jagat Ram 20,000 (ii) Smt. Gita Singh 20,000 (iii) Smt. Viranwali 10,000 These disclosures had been accepted. The declarants had paid tax on the amounts of income disclosed by them. Subsequently, these persons had deposited the money with the assessee. The assessee had paid interest on the deposits. The creditors were taxed on the interest income earned by them from the assessee. The Tribunal, relying upon a decision of this court in Badri Pd. Sons v. CIT [1975] 98 ITR 657 (All), held that the declarations under the Voluntary Disclosure Scheme did not give immunity to the assessee. The revenue was entitled to examine the explanation of the assessee independently. The same could be accepted if it was found that the creditors had the necessary capacity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ude an enquiry into the genuineness of the declaration in subsequent proceedings in relation to persons other than the declarant. The answer to these rival submissions will depend upon the interpretation of the various provisions of the Finance (No. 2) Act of 1965. Section 24 of this Act was headed as " voluntary disclosure of income ". It consists of sixteen sub-sections, Sub-section (1) envisaged a declaration in respect of amounts representing income chargeable to tax for an assessment year commencing prior to April 1, 1964, for which a return had not been filed or which was not disclosed in the return of income filed or which had escaped assessment. On such a declaration being made, the amount disclosed was chargeable to income-tax in accordance with sub-s. (3). Sub- section (2) requires that the declaration shall be made to the Commissioner and shall contain the name, address and signature of the person making the declaration. Sub-section (3) provides for the charge of income-tax on the voluntarily disclosed income. It reads : " (3) Income-tax shall be charged on the amount of the voluntarily disclosed income- (a) where the declarant is a person other than a company, at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder sub-section (6) shall be final and shall not be called in question before any court of law or any other authority." This provision makes the order of the Board in respect of the previously detected income final. Sub-sections (9) to (12) lay down the liabilities and immunities enjoyable by a declarant. Under sub-s. (9), the amount of income-tax so paid shall not be refundable in any circumstances and the declarant will not be entitled to reopen any assessment or reassessment made under the I.T. Act, 1961, or claim any set-off or relief in any appeal, reference or revision or other proceeding in relation to such assessment or reassessment. Sub-section (10) provides that the amount of the voluntarily disclosed income shall not be included in the total income of the declarant for any assessment year under any of the Acts mentioned in sub-s. (9) if he has credited such amount in the books of account, if any, maintained by him for any source of income or in any other record and that the credit made shall be intimated by the declarant to the ITO. Sub-section (11) provides that notwithstanding anything contained hereinabove or in any other law for the time being in force, nothin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... done without any investigation. Sub-section (15) provides that the Commissioner shall on an application by the declarant grant a certificate to him setting forth the particulars of the voluntarily disclosed income and the amount of income-tax paid in respect of the same and the date of payment. But there is no provision making the certificate or the declaration to be final and not liable to be questioned in any court or before any authority. The significance is obvious. Whenever the proceedings were summary and without any investigation the matter was left without any finality. The order in respect of detected income requires investigation and hearing. Then there is an appeal to the Board. The order of the Board has been made final by sub-s. (8). In the premises, the certificate granted by the Commissioner under sub-s. (15) as to the particulars of the voluntarily disclosed income cannot be treated as final so as not to be questionable before any, court of law or before any authority. This certificate is final only in so far as the voluntary disclosure under the Finance (No. 2) Act of 1965 is concerned. The fact that the voluntarily disclosed income is by a fiction treated as if su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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