TMI Blog2015 (8) TMI 617X X X X Extracts X X X X X X X X Extracts X X X X ..... by search can be the subject matter of the benefit under the Scheme. It is only on a close analysis of the relevant provisions of law and the judgment rendered by this court, that it has emerged that the proceedings initiated under Chapter XIV-B of the Act do not get affected by the proceedings under the Scheme. When this is the disparity or complexity as to the understanding of the provisions of those enactments, the respondents cannot be exposed to the obligation to pay penalty or interest. We, therefore, allow the appeals, setting aside the common order dated October 17, 2002, passed by the Tribunal and upholding the orders passed by the Assessing Officer. We, however, direct that the respondents shall not be exposed to the liability of penalty, interest or prosecution. This facility shall be available to them if only they pay the differential tax payable under Chapter XIV-B of the Act within two months from today. - Decided in favour of assessee. - Income Tax Tribunal Appeals Nos 62, 82, 63 and 42 of 2004 - - - Dated:- 24-12-2014 - L. NARASIMHA REDDY AND M. SEETHARAMA MURTHY, JJ. S. R. Ashok, Senior Standing Counsel for the Income-tax, for the appellant Y. Ratna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s filed by the respondents to avail of the benefit of the Scheme, the undisclosed income which was the subject matter of search is also included. The concerned Commissioner gave certificate on July 20, 1999, in respect thereof, after receiving the tax payable thereon. 8. As a sequel to the search, the respondents filed block return covering a period of ten years preceding the date of search. The respondents pleaded that once the amount referable to search became the subject matter of the Scheme, it cannot be brought under the purview of the block assessment. That plea was not accepted. Block assessment orders were passed on September 30, 1999, and the Assessing Officer levied the tax under Chapter IV of the Act. 9. The respondents filed appeals before the Commissioner, aggrieved by the orders of block assessment. The appeals were rejected. Thereupon, they filed I. T. (SS) A. No. 21/Hyd/2002 and batch before the Hyderabad Bench A of the Income-tax Appellate Tribunal (for short the Tribunal ). The principal argument advanced on behalf of the respondents was that the order of block assessment was contrary to the judgment of this court in Shankarlal's case (supra). The Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The record discloses that a sum of ₹ 20,15,000 in cash and pawned jewellery worth ₹ 1,80,500 were discovered. This was followed by recording of statement under sub-section (4) of section 132 of the Act. It is from the statement, that the Department came to the conclusion that the respondents have suppressed the income to the tune of ₹ 1 crore. 13. By the time the search has taken place, the Scheme became operational from July 1, 1997. Chapter IV of the Finance Act, 1997, comprising of sections 62 to 78 was devoted for this.The important provision in the Scheme is section 64. It reads as under : 64. Charge of 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 day of December, 1997, a declaration in accordance with the provi sions of section 65 in respect of any income chargeable to tax under the Income-tax Act for any assessment year- (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... summed up as under (page 559 of 230 ITR) : (A) Section 64 of the Finance Act, 1997, grants concession of tax and immunity to the undisclosed income which is declared in the scheme period. (B) The income that laws not returned within the time prescribed in the notice issued under section 142 or section 148 and which expired before the commencement of the scheme, will be ineligible under section 64(2)(i) for the benefit under section 64(1). (C) That benefit is denied to the income which is detected in a search under section 132, on a requisition under section 132A or in a survey under section 133A, whichever be the previous year to which the detected income relates. (D) Any undisclosed income other than such detected income in relation to any previous year can still be declared and will be eligible for the benefit under section 64(1). (E) If subsequently it is found that the income disclosed under the Voluntary Disclosure of Income Scheme, 1997, is to be assessed as part of the total income of any previous year and thus ineligible to be declared under section 64(1), the tax paid under section 64(1) shall be adjusted against the assessed tax. We, therefore, hold tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to analyse the judgment in Shankarlal's case (supra) on the touchstone of section 64 of the Act. At the first blush, it may appear that this court has added certain new dimensions to clause (ii) of sub-section (2) of section 64 of the Finance Act, 1997. That, however, is for the limited purpose of the case. All the same, the discussion in the context of granting relief was restricted only to the amount covered in the search proceedings. The record is not clear as to whether the respondents wanted the benefit under the Act in respect of any amount other than the one covered by the search proceedings. Obviously, because the controversy was only about the amount covered by the search, their Lordships took that into account, and in the discussion, summed up that the benefit under the Scheme is not available to the amount which is detected in the search under section 132 of the Act. This is clear from clause (C) which has been extracted in the preceding paragraphs. With that, the necessity to deal with any other aspect of the judgment or to see whether it is per incuriam is obviated. 20. Almost as a note of caution, their Lordships added clause E in the concluding portion whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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