TMI Blog1992 (12) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961, and, while assessing the firm, the Income-tax Officer had allowed refund in respect of the tax which was deposited under the Voluntary Disclosure of Income and Wealth Act, 1976 (hereinafter to be referred to as "the Act, 1976"). A declaration has been submitted under the Act of 1976 by the assessee as one of the partners of the firm had deposited the tax due in accordance with the provisions of the said Act. This refund has arisen on account of allowing the deduction of loss. Subsequently, the Income-tax Officer initiated proceedings under section 154 read with section 251 against the assessees who were the partners of the firm on the ground that the Act of 1976 does not provide for refund of the tax which has been paid and, accordingly, the assessment order was rectified and the demand was created. Against these assessment orders, the matter was challenged before the Appellate Assistant Commissioner of Income-tax who has upheld the orders passed by the assessing authority and has held that section 9 itself imposed an unqualified restriction on set-off of loss or relief granted to the assessee in any appeal in respect of voluntary disclosure of income and, therefore, the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith a view to removing certain practical difficulties experienced in the operation of the scheme of voluntary disclosure contained in the Ordinance of October 8, 1975, the President promulgated on November 29, 1975, another Ordinance, namely, the Voluntary Disclosure of Income and Wealth (Amendment) Ordinance, 1975". According to the scheme of this Act, a charge was created of income-tax on the voluntarily disclosed income under section 3 of the Act. declaration was required to be submitted and the particulars were provided under section 4 of the Act. Section 8 of the Act provided that the amount of the voluntarily disclosed income shall not be included in the total income of the declarant for any assessment year under the Income-tax Act and certain conditions were also prescribed for not including the income so disclosed in the total income of the declarant. Section 9 of the Act provided that the declarant shall not be entitled, in respect of the voluntarily disclosed income or any amount of income-tax paid thereon, to reopen any assessment or reassessment made under any of the Acts mentioned in sub-section (1) of section 8 or claim any set off or relief in any appeal, reference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return in respect of the total income of that year and no assessment has been made in respect of the total income of that year, the tax payable on the income declared under sub-section (1) for that year as if such income were the total income ; (b) where the declarant has furnished a return in respect of the total income of that year and no assessment has been made in pursuance of such return the tax payable on the aggregate of the total income returned and the income declared under sub-section (1) for that year as if such aggregate were the total income, as reduced by the tax payable on the basis of the total income returned ; and (c) where an assessment in respect of the total income of that year has been made, the tax payable on the aggregate of the total income as assessed and the income declared under sub-section (1) for that year as if such aggregate were the total income, as reduced by the tax payable on the basis of the total income as assessed. (5A) A declarant who has not paid, in accordance with the provisions of section 5, the tax chargeable in respect of the income of the previous year or years for which the declaration has been made shall, notwithstanding anythi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, not applicable in respect of any income for any assessment year which has not been disclosed in the return furnished after October 8, 1975, or for which the assessment has already been made by the Income-tax Officer before the date on which the declaration was made. The years in dispute have been shown at the top of this order against the number of reference itself, from which it would be evident that, in all these cases, the return was submitted before the coming into force of the Act of 1976. Under section 3(1) of the Act of 1976, a person can declare his income liable to tax for any assessment year up to 1975-76. This section is not a bar in respect of any undisclosed income for any previous year falling after the previous year in which the search was made. The provisions of section 3 and section 14 are applicable in respect of different fields. Section 14 is applicable for declaration of income in respect of the previous year in which the search was made or any earlier previous year thereto while the provisions of section 3 are applicable in a case of search and seizure of account books, documents, money, bullion, jewellery or other valuable articles or things for the per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1961. In accordance with the provisions of section 3, the income which has been declared is subjected to tax according to the rates as provided under the Schedule and the disclosed income is considered as a separate block irrespective of the year to which it pertains and the same is not to be taken into consideration for the purpose of the Income-tax Act, 1961. On the contrary, the provisions of section 14 as mentioned above provides that the said income has to be taken into consideration for the purpose of assessment. The only snag in the provisions of section 14 is that once an assessment is made, then the declaration of any income under the provisions of section 14 would be added for rate purposes for determination of the liability to tax. Sub-section (7) of section 14 makes it clear that nothing in sub-section (1) shall apply in relation to any income which has been included in the total income of the declarant in any assessment made by the Income-tax Officer before the date on which the declaration under that sub-section is made. The effect of the various provisions of the Act is that special rates as provided in the Schedule to the Voluntary Disclosure of Income and Wea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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