Hakimchand D. Chotai vs Commissioner of Income Tax

D.A. Mehta, J.—This petition challenges the action of respondent authority in not issuing certificate of the full amount disclosed under the Voluntary Disclosure of Income Scheme, 1997 (VDIS); alternatively, the action of respondent authority in not refunding the sum of Rs. 7,42,000 paid as tax and interest under VDIS has been challenged.

Heard Mr. S.N. Soparkar, learned senior advocate for the petitioner and Mr. M.R. Bhatt, learned standing counsel for respondent authority. It is an agreed position between the parties that the issue is no longer res Integra by virtue of the decision rendered by Supreme Court in the case of (2002) 83 ITD 774

It is an admitted position between the parties that the petitioner made a declaration disclosing income of Rs. 34,50,000 on which total tax (inclusive of interest) payable was Rs. 10,77,000. The declaration was made on 8th Dec, 1997. The petitioner paid a sum of Rs. 3,35,000 towards tax on 8th Dec, 1997. The balance amount of Rs. 7,00,000 towards tax and Rs. 42,000 towards interest was paid only on 26th March, 1998. Admittedly, the said date viz., 26th March, 1998 fell beyond the statutorily prescribed period of three months from the date of declaration and hence the respondent authority accepted the declaration only in relation to the income relatable to tax paid amounting to Rs. 3,35,000. Hence, the aforesaid challenge.

The petitioner has made the following principal prayers:

(a) To command to the respondent to issue to the petitioner certificate of the full amount accepting the declaration made by the petitioner under VDIS, 1997 at Annex. ''B'' hereto; or

In the alternative:

(b) To command to the respondent to refund and/or permit adjustment of the amount of Rs. 7,42,000 paid by the petitioner under VDIS, 1997 if it is found as not covered under the Scheme.

In light of the aforesaid decision of the apex Court prayer (a) cannot be granted and the petitioner assessee cannot succeed on the said count. In relation to the alternative prayer, i.e. prayer (b), the apex Court has stated in the case of Hemalatha Gargya (supra) thus:

However, having held that the assessees are not entitled to the benefit of the Scheme since the payments made by them were not in terms of the Scheme, we direct the Revenue authorities to refund or adjust the amounts already deposited by the assessees in purported compliance with the provisions of the Scheme to the concerned assessees in accordance with law.

Hence, the respondent authority is directed to either refund or adjust the amount already deposited by the assessee to the tune of Rs. 7,42,000 in accordance with the directions issued by the apex Court. The petition is accordingly partly allowed.

Rule made absolute to the aforesaid extent with no order as to costs.