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TMI Blog2002 (11) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT [2001] 249 ITR 543 (Mad); Smt. Atmjit Singh v. CIT [2001] 252 ITR 233 (Karn), have held that the period mentioned for payment of the tax due on the undisclosed income was inflexible. The scheme was introduced by and is contained in the Finance Act, 1997. It came into force with effect from July 1, 1997, and remained in operation till March 31, 1998. Section 64 of the Scheme provides that subject to the provisions of the scheme, where any person makes, on or after the date of commencement of the scheme but on or before the 31st day of December, 1997, a declaration in accordance with the provisions of section 65 in respect of any income chargeable to tax under the Income-tax Act, 1961, for any assessment year in respect of which such person had either (a) failed to furnish a return; or (b) failed to disclose in his return such income or 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 (c) to disclose fully and truly all material facts necessary for the assessment, then such person would be entitled to pay tax on such undisclosed income, if the assessee is an individual, at the rate of 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , not only because there was express provision for making payment of interest in case of delayed payment but also because the Revenue would be benefited by disclosure of undisclosed income, quick recovery of the same with payment of interest by March 31, 1998 (since the scheme was operative till that date), thus fulfilling the object of the Scheme. It is further submitted that because the Scheme was operative until March 31, 1998, therefore, it was open to a person to file a declaration on the last date, namely, December 31, 1997, and make payment by March 31, 1998, under section 67(1). It would be discriminatory and entirely arbitrary if the persons who had submitted their declarations voluntarily earlier were penalised for doing so by insisting on payment on an earlier date. The next submission of the assessees is that even if the provisions of section 67(1) were mandatory, nevertheless, the court could under certain circumstances dilute the severity of its operation, provided the assessees were acting bona fide. Reference has been made to the decision of this court in Hindustan Steel Ltd. v. State Of Orissa [1972] 83 ITR 26 in this context. The assessees have also argued that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... language used in section 67(2) makes it amply clear that the period specified was mandatory. Even if there were any doubt, according to settled principles of interpretation no extension could be granted beyond the period of three months as specified under section 67(1). It has further been submitted that since there were conflicting decisions of the different High Courts there was sufficient cause for the Department to agitate the issue before this court. Finally, it is submitted that as far as the payments made by the assessees were concerned if any payment had been made but not in terms of the Scheme, clearly the Department could not retain such payment and would either have to refund it or set it off in accordance with the prescribed procedures available under the Income-tax Act, 1961. We are of the view that the submissions of the Revenue must be accepted. A plain reading of the provisions of the Scheme would show that the tax payable under the Scheme "shall be paid" within the time specified is the general rule provided in section 66, namely, payment prior to the making of a declaration. The exception to this general rule has been carved out by section 67(1) which allows a de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There is no scope for the Revenue authorities to imply a provision not specifically provided for which would in any way modify the explicit terms of the Scheme. In the decision in Smt. Laxmi Mittal's case [1999] 238 ITR 97 (P & H), the High Court had relied upon a circular issued by the Central Board of Direct Taxes under section 119(2)(b) of the Income-tax Act, 1961. The circular has not been brought on record. Assuming that the High Court's reproduction of the contents is correct, all that the circular said was that the date for calculating interest would be 90 days from the date of declaration and if the 90th day happens to be a bank holiday, payment on the 91st day being, the next working day, would be valid. This circular certainly does not mean that the Board had thereby empowered the Commissioner under section 119(2)(b) to extend the period for the making of payment on sufficient cause being shown. All that the circular does is state what is provided in section 10 of the General Clauses Act, 1897, and section 4 of the Limitation Act, 1963. It is a general rule of interpretation and not an order empowering the Commissioner. In any event, it is doubtful whether the Board cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty is the result of a quasi criminal proceeding and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of the law or acted in conscious disregard of its obligation. Because of its quasi criminal character, the court held that the element of mens rea or bona fides was to be imported which would justify the authority who was competent to impose the penalty to refuse to impose penalty even when the statute provided for a fixed minimum penalty on proof of default. There is no question of imposition of penalty under the Scheme. What has been prescribed under section 67(2) is merely the consequence of the failure to comply with section 67(1). There is as such no question of importing the doctrine of mens rea or exercising any discretion contrary to the provisions of section 67(2). The submission of the assessees that this court should not interfere under article 136 of the Constitution in those cases where the Revenue is in appeal is unacceptable because the issue is purely one of law and given the divergent opinions of the different High Courts, it is an appropriate case where this court should interfere and settle the differenc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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