TRIBHOVANDAS BHIMJI ZAVERI Vs. UNION OF INDIA

JUDGEMENT

(1.) We are concerned in this appeal by special leave with the provisions of the Voluntary Disclosure of Income and Wealth Act, 1976 (hereinafter called "the said Act", which was deemed to have come into force on 8th October, 1975. The said Act was preceded by an Ordinance in the same terms, called the Voluntary Disclosure of Income and Wealth Ordinance, 1975, which had come into force on that day.

(2.) The appellants are a partnership firm. Their accounting year is the Samvat Year. The accounting year relevant to the Samvat Year 2031 and to the Assessment Year 1976-77 ended on 3rd November, 1975.

(3.) On 28th October, 1975, a search on the premises of the appellants under S. 132 of the Income-tax Act, 1961, was conducted by the Commissioner of Income-tax, Bombay City-1 (the third respondent). During the search, which continued from time to time until the end of December 1975, cash jewellery, diamonds and books of account were seized. On 31st December, 1975, the appellants made a disclosure under S. 3(1) of the said Ordinance/Act for the Assessment Years 1965-66 to 1975-76. A copy of the appellants declaration in this behalf has been placed before us. The appellants disclosed thereby for the said Assessment Years en bloc an income of Rs. 1.41 crores thus, Rs. 1.20 crores being the value of silver bars, silverware, diamonds, set jewellery and other ornaments; Rs. 20 lakhs in cash and Rs. 1 lakh being the value of miscellaneous assets, including furniture and fixtures. On 21st November, 1975 the 3rd respondent informed the appellants that since cash, jewellery, diamonds and books of accounts had been seized from the appellants before the declaration was filed, it was not in order under the terms of S. 3(2)(ii). He added that the declaration ought to be filed under S. 14(1). The appellants made a request for review of this decision which, on 30th December, 1975, was rejected. On 31st December, 1975, which was the last date for filing of declarations under the said Ordinance/Act, the appellants made a declaration, under protest, under the provisions of S. 14. The appellants made representations to the Central Board of Direct Taxes in furtherance of their desire to have the declaration under S. 3(1) accepted but, on 20th June, 1980, the Board declined to interfere.