2006 (3) TMI 84 - HC - Income Tax

Revenue referred to section 69 of the Finance Act 1997 which prohibits reopening of any completed assessment based on Voluntary Disclosure of Income Scheme declaration. - petitioner pointed out that reopening of completed assessment prohibited under section 69 is that of the declarant s and not of any other assessee s. - In this case the declarant is the son and the assessee who challenged the assessments is his mother. Even though there is no bar against reopening of assessment under section 69 of the Finance Act 1997 I do not think the petitioners are entitled to relief for the reason that the assessments challenged in the revision petitions are based on the returns filed and completed under section 143(1)(a) of the Income-tax Act. - Since the assessments challenged in revision before the Commissioner were based on returns filed and completed under section 143(1)(a) there is no mistake in the same and so much so there is no scope for interference.

Summary

Issues:
1. Validity of assessments under the Voluntary Disclosure of Income Scheme.
2. Entitlement to refund based on voluntary disclosure of income.
3. Interpretation of section 69 of the Finance Act, 1997.

Analysis:
1. The case involved the legal heirs of a deceased landowner who received compensation for acquired properties. The Assessing Officer noticed capital gains, leading to assessments for the years 1994-95 and 1995-96. The widow filed returns, which were accepted. Subsequently, the son made a voluntary disclosure of the entire income, including what was assessed in the mother's hands. The mother sought a refund based on this disclosure.

2. The petitioners argued that since the same income was assessed and disclosed under the Voluntary Disclosure of Income Scheme, the mother was entitled to a refund. However, the Commissioner rejected the revision petitions, stating that assessments based on returns filed under section 143(1)(a) could not be disputed. The court noted that any correction should have been sought by canceling the voluntary disclosure certificate. Since the son did not challenge the certificate, the court found no grounds for interference.

3. The respondents cited section 69 of the Finance Act, 1997, which prohibits reopening completed assessments based on voluntary disclosures. The petitioners contended that this prohibition applied only to the declarant, not other assesses. The court held that assessments challenged in revision were based on filed returns, and any error lay in the voluntary disclosure made by the son. As the assessments were valid, the court dismissed the petition, finding it devoid of merit.