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TMI Blog1984 (3) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... eturns as enclosures to the declarations made under the Voluntary Disclosure of Income and Wealth Act, 1976 ('the 1976 Act'). The question of limitation has also been raised by Dr. Pal. In reply the ld. Departmental representative contended that the plea taken by the assessee is not the plea raised in the additional grounds of appeals and, therefore, it should not be entertained. We think the objection is without any substance. The additional ground does raise the legality of the assessments and the question raised by Dr. Pal is purely a question of law and it requires consideration. Mr. Subramanian contended that the assessee having filed the return along with the declarations, the returns cannot be challenged. In regard to the question of limitation, Mr. Subramanian contended that there is no time limit for making returns and there is no time limit for making the assessments in accordance with law that is applicable for all the assessment years under appeal. 3. At the outset we must analyse the provisions under the 1976 Act before we appreciate the contentions raised by the authorities. The 1976 Act was passed by the Parliament as Act No. 8 of 1976. The 1976 Act replaces the Vo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arant under the Act: Provided that — (i) nothing contained in cl. (a) shall apply in relation to the net wealth assessable for any assessment year for which a notice under s. 14 or s. 17 of that Act has been served upon the declarant before the commencement of this Act; (ii) nothing contained in cl. (b) shall apply in relation to so much of the value of such assets as has been assessed in any assessment for the relevant assessment year made by the WTO before the date on which the declaration under this sub-section is made. (2) The declaration under sub-s. (1) shall be made to the Commissioner and shall be in such form and shall be verified in such manner as may be prescribed by rules made by the Board. (3) A declaration under sub-s. (1) shall be signed by the person specified in sub-s. (2) of s. 4 as if the declaration had been made under that section. (4) A copy of the declaration made by the declarant under sub-s. (1) shall be forwarded by the Commissioner to the WTO and the information contained therein may be taken into account for the purposes of the proceedings relating to assessment or reassessment of the net wealth of the declarant under the provisions of the WT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t aggrieved. The appeals filed by her having failed, the present appeals are filed and, as already stated, among other grounds, the additional ground has been taken. 5. Adverting to the additional ground, we find that s. 15(4) of the 1976 Act contemplates that the information contained in the declaration may be taken into account by the WTO for the purpose of making an assessment or reassessment of the net wealth. The purpose of the declaration, which has to be forwarded by the commissioner to the WTO, is only for utilising the information contained in the declaration, to make an assessment or reassessment, as the case may be. Sub-s. (4) itself does not contemplate filing of a return along with the declaration. It is only r. 5 that contemplates filing of a return of net wealth along with the declaration. The language shows that the declaration shall be accompanied by a return of net wealth. In other words, the return of net wealth would be an enclosure to the declaration. Form C is obviously in consonance with sub-r. (2) of r. 5. Now the whole controversy is whether the returns filed by the assessee accompanying the declarations are returns filed under the Act on which the WTO co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontemplated filing of a return under the Act, the language would have been slightly different. It would have been enough if the wording would have been be accompanied by a return of net wealth under the WT Act. As already stated, it should have also been provided that a return so filed shall be treated as a return under the Act in order to clothe the WTO with the jurisdiction to make an assessment: 1. Sec. 15 only contemplates use of the information contained in the declaration by the WTO. The legislature is quite aware that in order to make an assessment in a case where no assessment is made or to make a reassessment in a case where there is an under-assessment, the WTO can proceed on the information in his possession. This is the language used in s. 17 of the Act corresponding to s. 147 of the 1961 Act. Being aware of such a position, the parliament obviously used the expression 'information' which may be taken into account for the purpose of a proceeding relating to assessment or reassessment of net wealth. Sec. 15 of the 1976 Act does not contemplate at all making of an assessment. It refers to an assessment or a reassessment to be made under the provisions of the Act. This i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn accompanying the declaration in accordance with sub-r. (2) of r. 5 is to be treated as a revised return. On the other hand s. 15(4) if understood in the manner we have indicated, the situation which may arise is easily avoided and there will be no difficulty in reconciling the provisions of the 1976 Act and the 1957 Act. To emphasise the above aspect, we may take another illustration. Suppose an assessment is already made in respect of any year for which declaration is made, the only course open to the WTO is to utilise the declaration as information and reopen the assessment. In such a case there will be reassessment. An assessment is never contemplated in a case where there is already an assessment made. It is trite learning to say that once an assessment is made, it can be altered only by resorting to the specified provisions under the Act, i.e., either by reopening or by rectifying. Therefore, s. 15 of the 1976 Act should be understood in such a manner that the words used therein are given proper and reasonable meaning. 7. We may also in this connection look to the immunity provided under s. 15(1). The only immunity provided is in respect of penalty and prosecution. The n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. Mr. Subramanian also contended that there is a distinction between s. 14 and s. 15 of the 1976 Act in that the declaration under s. 14 need not be accompanied by a return of income as can be seen from r. 4 of the 1975 Rules. From this he contends that when a return is necessarily to be filed in relation to a voluntary disclosure of net wealth, this is not a mere empty formality but is a provision to enable the WTO to process such a return and make an assessment. On the face of it, the argument is attractive but on a closer examination, we find that it has no substance. The statement of income in Item 6 of Form B is a complete statement of all details required relating to income declared under s. 14. There is no necessity for enclosing a return of income when all the details are made available. Mr. Subramanian's point was that there is a difference between s. 14 and s.15 because under the 1961 Act, the assessment or reassessment is circumscribed by the period fixed under the said Act whereas there is no time limit for filing a return under the 1957 Act nor is there any time limit for completing the assessment as the law that is applicable for these assessment years under appeal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the above, no other contention is necessary to be decided. 11. In the result, all the assessments are quashed. The appeals are allowed. ANAND PRAKASH, A.M. 12. I have gone through the order of my ld. Brother, J.M. As I have not been able to reach the same conclusion as he, I write a separate order as follows. 13. The facts giving rise to the controversy are required to be recapitulated before the rival contentions are examined. The assessee is an individual. She filed declarations of her net wealth in terms of s. 15 of the Voluntary Disclosure of Income and Wealth Ordinance, 1975 (later substituted by Voluntary Disclosure of Income and Wealth Act, 1976), declaring voluntarily certain wealth owned by her on the various valuation dates relevant for the asst. yrs. 1958-59 to 1974-75. The declaration was made in Form C. Along with it the assessee filed returns of net wealth for the aforesaid assessment years. The said declaration and the accompanying returns of net wealth were filed by the assessee before the Commissioner in accordance with the provisions of s. 15. The said Commissioner forwarded the said declaration and the returns to the WTO for necessary action. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on 1st July, 1981 for the permission to raise an additional ground which is common in respect of all the years and reads as follows: "For that the return of wealth for the relevant assessment year having filed along with the disclosure after the statutory period provided under the WT Act, the said return is an invalid one and non est in the eye of law and as such the assessment made by the WTO on the basis of the said invalid return is illegal and invalid and is also barred by limitation." 18. The aforesaid additional ground of appeal was admitted by the Tribunal and in support of it, it was urged by the ld. counsel for the assessee that the statutory period for filing the return of wealth was eight years from the end of the assessment year concerned as laid down in s. 17 of the Act and that, even under s. 15 of the Act no return of wealth could be filed beyond the said period of eight years and, even if filed, the return would not be valid and no assessment on its basis could be made. The ld. Counsel relied for the above proposition, on the following decisions: CIT vs. S. Raman Chettiar (1965) 55 ITR 630 (SC), Smt. Parbati Devi vs. CIT (1970) 75 ITR 625 (All) and CIT vs. Sm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of reasoning of the ld. Counsel does not appear to be in accordance with the plain language of the law. Sec. 15 is clear and unambiguous and does not admit of any doubt as to its meaning. The relevant provisions of the said section read as follows : "If any person has not furnished a return within the time allowed under section 14,.....he may furnish a return.......at any time before the assessment is made." It is common ground that up to 31st Dec., 1975 there was no provision in the 1957 Act, analogous to s. 153 of the 1961 Act, stipulating time limits for the completion of the assessments. An assessment for 1957-58, for example, could, therefore, be completed under s. 16 as on 31st Dec., 1975; and, if this be so, a return could always be filed by an assessee under s. 15 before the completion of the assessment, provided he had an obligation to file return under s. 14 of the said Act. Sec. 14 cast an obligation on every individual and HUF, whose net wealth was above the minimum exempt from wealth-tax, to file his return before June 30 of the assessment year concerned. Therefore, if an assessee, who should have filed his return under s. 14, did not do so within the above period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and as the same have, admittedly, been completed before that date the assessments are valid and it would not be correct to say that they are time barred. The averment of the assessee that the returns in question are invalid and non est in law is also not acceptable to us for the reasons given above. The additional ground taken by the assessee in the circumstances appears to me without substance and, is accordingly, rejected. 23. The ld. Counsel for the assessee also advanced the proposition that the returns for the asst. yrs. 1958-59 to 1967-68 were not filed under the Act but were filed under the 1976 Act and that no valid assessment could be made under the Act on the basis of such returns. The ld. Departmental representative objected to the urging of the above argument by the ld. Counsel for the assessee as according to him, it was not the ground of appeal set forth by the assessee as additional ground; it in fact ran counter to the said ground of appeal. The ld. Counsel for the assessee countered the objection of the departmental representative by saying that the argument urged by him was in support of the additional ground which is, in his opinion, wide enough to admit the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the additional ground. 25. Nevertheless, it would not be correct to shut out the assessee on that preliminary ground alone. The argument does go to the root of the matter and does question the validity of the assessments. Both the sides have had full opportunity to make their submissions on this point. The contention raised by the assessee, therefore, deserves to be examined in detail. Leave was, accordingly, granted to the assessee under r. 11 of the IT (Tribunal) Rules, 1963 to raise it. 26. The kernel of the controversy raised before us by the ld. counsel for the assessee, as noted by my ld. counsel for the assessee, as noted by my ld. brother, also it whether the returns of net wealth filed by the assessee along with the declaration made under s. 15(1) of the 1976 Act in compliance to sub-s. (2) thereof, r/w sub-r. (2) of r. 5 of the 1975 Rules can be treated as returns under the Act and whether valid assessments on the basis of the said returns, if permissible under the Act, can be made on the assessee. 27. The stand of the assessee is that they cannot be treated as returns under the Act, that they are mere accompaniments, or annexures to the declaration made, that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, whereas under the 1961 Act there is time limit for filing the returns and finalising the assessments, there were no such time limits under the Act at the relevant time, that, therefore, the provision was made to file the returns under r. 5(2) but not under r. 4, that such returns could be treated as valid returns under s. 15 of the Act and valid assessments on their basis could be made under the Act, if the provisions of the Act permitted it. As in the present case, such assessments on the basis of WT returns filed by the assessee under r. 5(2) were possible, the assessments made were legal and valid and it would not be correct to say that the assessee should be required to undergo the motions of preparing and filing similar returns once again by issue of appropriate notices under ss. 14 and 17 of the Act and that this is precisely what has been done in the assessee's case in respect of the asst. yrs. 1968-69 to 1975-76 and the assessee has no grievance against it. 29. The point raised above is, indeed, interesting, though difficult and without precedent. The matter has, therefore, to be decided on first principles. 30.It is not in dispute that every individual, who has tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oluntarily disclosed income'; it is not included in the total income as per provisions of s. 8 and forms altogether separate block and is subjected to tax at special rates given in the schedule to the 1976 Act, not in respect of the income of each assessment year, but on the totality of it. The declaration disclosing the income has to be in Form A and has to be made to the Commissioner. Tax is ordinarily required to be paid in terms of sub-s. (1) of s. 5 of the 1976 Act 'before making the declaration' and the proof of such payment is to be attached to the declaration. In certain circumstances, the Commissioner may grant time for making the payment as per provisions of sub-ss. (2) and (3) of s. 5. Apart from paying tax as above, the declarant has also to invest in prescribed securities 5 per cent of the voluntarily disclosed income. This investment has to be made within 30 days of making the declaration. If tax is not paid within the extended time it may recovered in the manner prescribed under s. 7 of the 1976 Act. The declaration may be for any assessment year to which the provisions of the Indian IT Act, 1922 ('the 1922 Act') and of the 1961 Act applied. Thus, theoretically a dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formation contained in the declaration 'for the purposes of the proceedings relating to assessment or reassessment of the income of the declarant under the provisions of any of the acts mentioned in sub-s. (1) of s. 8 of the WT Act'. The income disclosed under s. 14 was, thus, not to form a separate block, as under s. 3, nor was it subject to special rates. It was to be part of the total income and was to be assessed in accordance with the procedures of the 1961 Act and subjected to tax at the rate prescribed in the respective Finance Acts. As the declaration merely provided information to the ITO and did not suo motu bring into existence an assessment or reassessment proceeding, the only course open to the ITO to take into account the information contained in the declaration for the purposes of proceeding of assessment or reassessment was, if no such proceedings were pending before him, to take recourse to the relevant provisions of the law to bring into existence such proceedings. If such proceedings were already pending, the use of the information could straightaway be made. If they were not pending then, as noted above, such proceedings had to be brought into existence before u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15(1) can relate to any of the assessment years to which the provisions of the Act applied, i.e., for any of the asst. yrs. from 1957-58 to 1975-76. 37. If a person makes a declaration under any of the situations referred to in class. (A) and (b) above, then immunity is granted to him under sub-s. (1) of s. 15 of the 1976 Act from prosecution and penal provisions of the Act, provided taxes and deposits in securities have been paid/made in terms of sub-s. (5) of s. 15, to which I will revert in detail later. The penal provisions applicable to situation (a) would be those contained in s. 18(1) (a) or 18(1) (b) of the Act and those applicable to situation (b) would be the ones contained at the relevant time in s. 18(1)(c) and/or 18(1)(b). the provisions pertaining to prosecutions were contained at the relevant time in s. 36 of the Act. According to it, a person could be prosecuted for his failure without reasonable cause to furnish in due time any return mentioned in s. 14 of the Act (s. 36(1)(a)). He could also be prosecuted for making a false verification in the return filed under s. 14 (s. 36(2) (a)). Sec. 36, however, stood deleted w.e.f. 1st Oct., 1975 by the Taxation Laws (Ame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndicated in proviso (ii) to sub-s. (1) of s. 15. 38. Sec. 15 of the 1976 Act like s. 14 of the said Act and unlike s.3 thereof did not modify the provisions of the existing statute in any respect, except that in cases of the declarants covered by cls. (a) and (b) of sub-s. (1) of s. 15, the penalty and prosecution provisions of the Act were made inoperative in the circumstances referred to in the immediately preceding paragraph. The rest of the provisions of the Act applied to such declarants and their assessments to wealth-tax had to be made in accordance with the normal provisions of the Act. The declaration was, however, to be made to the Commissioner in terms of s. 15(2) in the prescribed form and was to be verified in the prescribed manner. Sub-r. (1) of r. 5 prescribes that the declaration referred to in sub-s. (1) of s.15 shall be made in Form C. Sub-r. (2) of the said rule further stipulated that- "Where a declaration under sub-r. (1) is made in respect of net wealth, or includes any declaration in respect of net wealth, for any assessment year or years, the declaration shall be accompanied by a return of net wealth for such year or years in the form prescribed under s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. In such a case, the wealth-tax shall be computed at the rates applicable to the net wealth of an assessee in the assessment year concerned. Declaration under cl. (B) of sub-s. (1) of s. 15 was to be filed in a case where a return had been duly filed by the assessee but he had either omitted certain assets from inclusion in the said return or had understated their value. Two situations could arise in such a case: (i) Where assessment with reference to the said return had not been completed; or (ii) where the assessment had been completed. In the former case, the wealth-tax had to be computed by adding to the returned wealth declared value under the declaration and treating the aggregate as the net wealth for the assessment year concerned and working out the wealth-tax payable thereon. From such wealth-tax, the tax payable on the returned wealth was to be deducted. The difference was to be deposited in terms of sub-s. (5) of s. 15. In the latter case, computation of wealth-tax to be deposited had to be made by aggregating the assessed value for the assessment year concerned with the declared value of assets for that year and treating the aggregate as the net wealth and comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in ss. 14, 15 and 17 of the Act. Sec. 14 makes it obligatory on the part of an individual of an HUF to file suo motu a return of wealth before the specified date if his net wealth is such as is liable to wealth-tax. If such a return is filed by the assessee within the time mentioned in sub-s.(1) of s. 14, an assessment proceeding comes into being. 42. If a person has not furnished a return within the time allowed under s. 14, he may still furnish it at any time before the assessment is made in terms of s. 15. With the filing of such return also, an assessment proceeding comes into being. As has been pointed our earlier, there was no time limit for completion of assessment under the Act up to 31st Dec., 1975. Assessment proceedings for any of the years right from the asst. yr. 1957-58 onwards could therefore, be brought into being by filing WT returns under s. 15 in respect of the said assessment years, if assessments in respect of those years had not already been completed. 43. Apart from the above, the assessment proceedings could also be brought into existence by the WTO by taking action in terms of sub-s. (2) of s. 14 or s. 17. Action under sub-s. (2) of s. 14 could be ini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s specified therein. 2. Sec. 17 of the said Act stipulated that 'the provisions of Chap. XV of the IT Act relating to liability in special cases and of s. 189 of that Act or of Chapter V of the WT Act relating to liability to assessment in special cases shall, so far as may by apply in relation to proceedings under this Act as they apply in relation to proceedings under the IT Act or as the case may be, the WT Act. 3. Sec. 19 similarly confers powers on the CBDT to remove difficulties in giving effect to the provisions of the 1976 Act, provided the orders passed by the CBDT under the said section are nor inconsistent with the provisions of the 1976 Act. 4. Sec. 20 confers on the CDBT power to make rules for carrying out the provisions of the 1976 Act. 47. From the aforesaid review of the various provisions of the 1976 Act, it is clear that it is an adjunct to the 1961 Act and the 1957 Act and its sole object is to bring within the regular stream of taxation the incomes and wealth, which have been straying, for various reasons, out of it; it is in aid of the said Acts and has to be read in their context and not de hors the said Acts. A separate schedule of taxation, do hors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al law of the land by availing of the opportunity provided by said Act. There is no compulsion in said Act. Whether to accept the invitation extended by it or not is entirely for the individual to decide. No penal consequences are provided in the said Act for not accepting the offer. The said Act merely promises certain benefits, concessions and immunities to use the language of s. 18 of the 1976 Act, if the offers contained in ss. 3, 14 and 15 of the said Act are accepted and the conditions stipulated therein are fulfilled. Conferment of the benefits cannot, in the scheme of the said Act, be divorced from the conditions to be fulfilled. It is, of course, open to an individual not to avail the offer and to face the normal consequences of the law. But he cannot claim the benefits and yet refuse to carry our the obligations or contest the consequences flowing from such compliance on legalistic grounds. Any attempt to claim the benefits but not to carry out the obligations shall be contrary to the scheme of the said Act and defeat its very purpose and should therefore, not ordinarily be countenanced unless the language of the said Act itself compels such an interpretation and outcome. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treatment, in the face of more or less identical language in sub-s. (4) of ss. 14 and 15 of the 1976 Act, respectively, has its rationale rooted in the different provisions of the two Acts. Under the 1961 Act, there is a time limit for filing the returns as contained in s. 139(4) of the said Act. No valid return, in violation of the said provisions, could be filed suo moto and as the 1976 Act did not intend to modify the assessment procedure as laid down under the 1961 Act in respect of the disclosed income, rules made thereunder could not, and did not, make provisions for filing the It returns in cases where no returns had earlier been filed. Similar is, however, not the position under the 1957 Act. As noted above there was no time limit under the Act up to 31st Dec., 1975 for completion of assessments. There is not in limit whatsoever mentioned in s. 15 of the Act except stating that the return under s. 15 could be filed any time before the assessment was completed. It was, therefore, possible under the Act that a person could file returns for the asst. yrs. 1957-58 onwards in between the period 8th Oct., 1975 and 31st Dec., 1975, if he had not been assessed in respect of any of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as noted above, the 1976 Act itself is voluntary and requires voluntary compliance if one wants to earn immunity granted under s. 15(1) of the said Act. If the assessee filed the said returns de hors the 1976 Act, he would earn no immunity. If he had not filed them at all, he would still be outside the pale of the 1976 Act and subject to all rigours of s. 36 of the Act and in suitable cases of the Customs Act and the Gold (Control) Act. One instance of how the 1976 Act enures for the benefits of an assessee and how detrimental in its absence this could be for an assessee is provided by the case of R. Seshammal vs. CIT (1981) 20 CTR (Mad) 328 : (1981) 130 ITR 81 (Mad). If the assessee in that case had not made a disclosure under ss. 14 and 15 of the 1976 Act, she would have forfeited all her primary gold and jewellery. As she had done so, she was saved by the operation of s.16 of the 1976 Act. The above case illustrates in the most striking manner the benefits derived by an assessee by availing of the opportunity provided by the 1976 Act. There is nothing in the language of the 1976 Act or the Act which might suggest that the returns of wealth filed along with the declaration in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly using the information contained in the declaration for making assessments by bringing into existence the proceedings of assessment in terms of s. 15 of the Act. The rule has the same force as the statute and it also has the sanction of the Parliament inasmuch as sub-s. (3) of s. 20 of the 1976 Act specifically requires the Central Government to place every rule before the Parliament and unless it is modified or disapproved by the Parliament, the rule has the section of the parliament. In the present case, it is not the contention of the assessee that sub-r. (2) to r. 5 has not been approved by the Parliament. To say, therefore, that the sub-rule has less sanctity than the statute itself would not be correct. 53. In fact, the ld. Counsel had never called in question the vires of sub-r. (2) to r. 5 before us. It is also not that the assessee has not complied with the said sub-rule. In fact, the logic advanced by the ld. counsel i.e., that the rule making authority could not have made sub-r. (2) to r. 5, if carried to its limit, it will not in any way advance the assessee's case, for, if the returns of net wealth would not have been required to be filed through sub-r. (2) the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a return of net wealth' would not, in my opinion, be correct. A 'return of net wealth' has a certain connotation under the Act and its meaning does not get changed merely because sub-r. (2) of r. 5 further clarifies that it will be in the form prescribed by s. 14. That is, more is less, the phraseology used in s. 14, itself. By borrowing it in sub-r. (2), no different meaning was intended to be ascribed to the phrase 'return of income'. It has, in my opinion, the same connotation as that spelled out by s. 14. That the draftsman could have used a different phraseology instead of the one actually adopted, would not justify giving a different meaning to the phrase from what the plain language justifies, for the draftsmen's language may differ from person to person and simply because certain drafts would have satisfied the ld. Counsel more, it would not be correct that a different meaning be ascribed to the plain language the draftsman by imputing to him something which he has not said. What has to be filed along with the declaration is the 'return of net wealth'. Such return, may it be noted, is not part of the declaration; it is in addition to it. It is verified independently of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same form in which details of wealth are given while filing the return of wealth. The verification of the declaration would cover these details as well. Instead of laying down this procedure and leaving it to the WTO to call for the returns under the relevant provisions of the Act to match the said declaration, the rule prescribed that in respect of net wealth the returns of net wealth in the prescribed form must also be filed simultaneously so that assessment for all the years could proceed apace without undue loss of time. There is nothing unreasonable in this requirement. Instead it carries out the purpose of the 1976 Act more expeditiously. 56. This requirement also served another purpose, viz. To bind the assessee to his declaration under the 1976 Act. Declaration of net wealth under the 1976 Act as noted earlier, could be made for any year from the asst. yr. 1957-58 onwards. Action under s. 17 of the Act could, however, be taken only for eight years preceding the asst. yr. 1975-76 as on the date of declaration. If, therefore, a person was allowed to make declaration of net wealth for the asst. yr. 1957-58 onwards but liability to tax on him could not be fastened for a yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out above, a return of net wealth has to be filed only in cases covered by cl. (a) of sub-s. (1) of s. 15 of the 1976 Act, i.e., where a return of wealth-tax has earlier not been filed and where notices under ss. 14 and 17 of the Act have not been served. The return is not to be filed in respect of cases covered by cl. (b) of sub-s. (1) of s. 15 of the 1976 Act where the returns have been filed but the value of some assets has either not been disclosed or the value of assets has been understated. In the cases covered by cl. (b), again two situations are possible: (i) where as a result of the return filed earlier, assessment has been completed; or (ii) where assessment has not been completed. In the latter case, the assessment proceeding is still pending and, therefore, the information contained in the declaration filed in Form C can be used for assessment. It is not necessary to provide for the filing of the return of net wealth in such a case to effectuate the provision of the 1976 Act. If however, assessee has already been completed, no useful purpose will be served by filing the return of net wealth; for, in such a case, reopening of the assessment is necessary for making u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us, nor does it arise for determination in the present appeals because as held earlier, in my opinion, valid assessments are possible on the basis of the returns filed by the assessee in compliance with sub-r. (2) of r. 5 and such assessment have, in fact, been made in the present case. 60. My ld. Brother has not expressed any opinion on the merits of the case, I also, therefore, refrain from expressing my opinion on it. If necessary the matter will be gone into at the appropriate stage. 61. For statistical purposes, I will treat the assessee's appeals as unsuccessful. Since we have differed in our opinion on the following question in deciding the above appeals, we refer the matter to the President of the Tribunal for a decision on the point at issue by a Third Member. "Whether the returns accompanying the declarations under s. 15 of the Voluntary Disclosure of Income and Wealth Act, 1976, in terms of r. 5(2) of the Voluntary Disclosure of Income and Wealth Rules, 1975, can be treated as returns filed under the WT Act for the purpose of making valid assessments?" T.D. SUGLA, PRESIDENT 62. On difference of opinion between the ld. Members who heard these appeals originally, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns filed and marked annexures as returns under s. 15. It is further contended that the return under s. 15 has to be filed before the WTO and, therefore, assuming the returns filed as annexures to the declaration in Form 'C' could be treated as returns, they would not be returns under s. 15 as those were filed before the Commissioner and not before the WTO. 64. Shri M.L. Bhattacharjee, the ld. Standing counsel for the departmental representative, on the other hand, strongly relied on the order of the ld. A.M. According to him, the ld. A.M. has discussed the issue threadbare in his order duly pointing out the fallacy in the reasoning given by the ld. J.M. He strongly urged that under the Act until s. 17A was introduced w.e.f. 1st April, 1976 there was no time limit for making an assessment and that the returns of wealth under sec. 15 could be filed by an assessee at any time before the assessment was completed and that, therefore, returns filed by an assessee in any manner, for any purpose and before any authority, if those conform to the returns to be filed under s. 14(1)(2) of the Act, will have to be treated as returns under s. 15, giving the WTO jurisdiction to make the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umber of years, whichever is less. Further, in the case of escapement of net wealth altogether, column 5 of Form 'C', in which a declaration has to be filed, by itself requires the figure of the net wealth to be declared for each year as distinct from column 6 meant for disclosure of only specific assets or understatement in the value. It is, perhaps, for this reason that the rule making authority considered it necessary to have full particulars of the net wealth inasmuch detail as possible so that the declarant is tied down to a specific stand. Since a return form was readily available wherein there was provision for furnishing the necessary particulars, column 5 itself required the return of net wealth to be attached for each assessment year as laid down in r. 5(2). In this context, it is necessary to refer to the rule which reads as under: "5. Form of declaration under s. 15 in respect of net wealth or value of assets not disclosed or understated. (1) xx xx xx (2) Where a declaration under sub-rule (1) is made in respect of net wealth, or includes any declaration in respect of net wealth, for any assessment year or years, the declaration shall be accompanied by a return o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f it is read that the declarations of net wealth for the years for which the WTO could not take action under s. 17 were to be accepted in the sprit as whatever is offered is something that would have never come to the exchequer. For the years coming within the scope of s. 17, the WTO, if he found that the information contained in the declarations was wrong, could certainly take action on the basis of the information for making the correct assessment or reassessments. 69. There is, yet another reason for justifying my aforesaid view. If such returns, filed as annexures to the declarations of net wealth as contemplated in s. 15(1)(a) of the 1976 Act, in Form 'C' were to be treated as returns under s.15 of the Act, it will be mandatory for the WTO to complete the assessments under s.16 of the said Act on the basis of the returns. However, s. 15(4) of the 1976 Act does not at all contemplate assessments in all such cases. It is assumed that the tax payable on the basis of the wealth-tax declarations in term of ss. 15(5)(6) and paid by the declarant is correct. A copy of the declaration is passed on to the WTO to enable him to use the information contained in the declaration for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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