2002 PLP 1064 (PTD)

(a) for which he has failed to furnish a return under section 139 of the Income-tax Act: (b) which he has failed to disclose in a return of income furnished by him under the Income-tax Act before the date of commencement of this 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 Income-tax Act or to disclose fully and truly all material facts necessary for his assessment or otherwise, then, notwithstanding anything contained in the Income-tax Act or in any Finance Act, income-tax shall be charged in respect of the income so declared (such income being hereinafter referred to as the voluntarily disclosed income) at the rate specified hereunder, namely:

(i) in the case of a declarant, being a company or a firm, at the rate of 35 percent of the voluntarily disclosed income; (ii) in the case of a declarant, being a person other than a company or a firm, at the rate of 30 percent of the voluntarily disclosed income. (2) Nothing contained in subsection (1) shall apply in relation to

(i) the income assessable, for any 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; (ii) the income in respect of the previous year in which a search under section 132 of the Income-tax Act was initiated or requisitioned under section 132A of the Income-tax Act was made, or survey under section 133A of the Income-tax was carried out or in respect of any earlier previous year." Clause (b) of section 64(1) specified the persons who are entitled for the Scheme. Hence, there is no doubt that the Scheme has been introduced to those who have failed to furnish their return or who have failed to disclose the income in their return. This is to bring but the hidden black money to facilitate the same to be treated as accounted one. Hence, those who opted to tile the declaration under this Scheme have necessarily made the declaration about the black money they have possessed with the fond hope that they will have the benefit of the scheme by paying the tax as required either under section 66 or 67 of the Act. When that be the intention of Parliament, whether subsection (2) of section 67 which makes the declaration non existent on the basis of the failure to pay the tax within the stipulated time can be considered to be, mandatory and thereby the declarant can be refused the benefit. This is a beneficial provision introduced by Parliament to give the benefit to those who are possessed of black money to make the declaration and pay the tax and thereby convert the same into an accounted one. When making the declaration, the declarant has to disclose the quantum of the amount which has not been accounted for to the Income-tax Department in the previous years and which is liable for taxation. Hence, the declarant is revealing the secret in order to have the benefit of the Scheme which enables him to convert the hidden wealth as an accounted one by paying the tax. Further, the tax paid under the Scheme is not refundable one as per section 70 of the Act. When such strict restrictions are there whether it would be reasonable to refuse the benefit of the Scheme to the declarant after the payment of the tax by him. It goes without saying that the declarant is not only deprived of the tax paid by him but also subjects himself to other proceedings on the basis of the declaration. In such circumstances, there should be some leniency with regard to the strictness of the period of limitation to comply with the payment of tax. In an identical case in Smt. Laxmi Mittal v. CIT (1999) 238 ITR 97, the Punjab and Harayana High Court has held that section 67 does not embody a totally inflexible-rule in the following words (page 99): "Mr. Sawhney submits that section 67 lays down an inflexible rule and according to this provision the deposit has to be made within a period of three months from the date of declaration. Any failure renders the declaration and the deposit non-est. This contention cannot be accepted. The Government of India has itself issued a Circular, dated September 3, 1998. By this Circular it has been, inter alia, provided by the Board that the period for calculating interest, will be 90 days from the date of declaration. If the 90th day happens to be a bank holiday, payment on the 91st day being the next working day would be valid. Thus, it is clear that section 67 does not embody a totally inflexible rule. When things are beyond the control of the citizen, certain moving space is normally allowed. This is precisely what the petitioner is wanting in the present case. Taking the totality of circumstances into consideration it appears that the petitioner was unable to make the deposit on account of reasons beyond her control. The Revenue has suffered no loss as the interest for three months, viz., Rs. 33,000 has been deposited by the petitioner. Still further, it is also clear that a declaration under the Scheme could be made on or before December 31, 1997. The tax along with interest could have been deposited on or before March 31, 1998. Any deposit before that should not be considered as being beyond the Scheme. In any event, the interest having been paid, the Revenue has suffered no loss. " I am in total acceptance with the view taken by the learned Judges of Punjab and Haryana High Court, as the same is more reasonable and sensible. Otherwise, the person who-made the declaration by revaluing the secret, because of his inability to comply with the condition within the period of limitation, will be definitely subject himself for other proceedings. He will also be forced to forego the tax paid by him. In the result, not only deprived of the benefit of the Scheme but also forced to face the loss which cannot be the intention of the Legislature. The Scheme is not only to bring out hidden income of an individual but also to get Revenue for the Center. As rightly pointed out by the learned Judges of the Punjab and Harayana High Court, when the declarant has paid the amount with interest thereon and that too without any long delay, with an explanation for the non-payment of the amount within the stipulated three months period from the date of declaration, the declarant must be given the benefit of the Scheme. For the reasons stated above, I am of the view that the impugned proceedings cannot be sustained and as much it is set aside and the writ petition is allowed. No costs. M.B.A./603/FC Petition allowed.