BABU NAIDU C K Vs. WEALTH TAX OFFICER

JUDGEMENT

(1.) These two writ petitions arise out of similar facts and raise a common question of law. They are, therefore, disposed of by this single judgment.

(2.) The Finance Act, 1965, which was published in the Gazette of India on 11th May, 1965, provided a scheme in S.68 of that Act for voluntary disclosure of secreted income and settlement of income tax liability on the amount se disclosed on a concessional basis. This section was given retrospective effect from 1st March 1965. Such a scheme was there already; and the above section was enacted to give legislative sanction for the same. It may be sufficient for the purpose of this case to read only sub-s.(1), (2) and (3) of S.68.

(3.) On the basis of the above disclosures, the Wealth Tax Officer, Calicut, who is the first respondent in both these cases, took proceedings under S.17 of the Wealth Tax Act, 1957 in respect of the assessment years to which the disclosed income was attributed by the petitioners, to reassess the net wealth which escaped assessment. He accepted the distribution of the disclosed income as made by the petitioners for the purpose of S.68 of the Finance Act, 1965; and there was no dispute that the petitioners are liable for reassessment on that basis. But they claimed that the whole amount of income attributed to an assessment year was not net wealth which escaped assessment for that year; the net wealth was only the said amount less the amount of income tax payable under the Income Tax Act, 1961, in respect of the said amount. The argument may be illustrated with reference to one of the assessment years for the sake of clarity. The income attributed by the petitioner in O. P. 1511 for the assessment year 1962-63 in the declaration under S.68 of the Finance Act, 1965 was Rs. 1,85,250/-as already stated. The Wealth Tax Officer proposed to reassess the said amount as net wealth which escaped assessment for the above assessment year. The petitioner claimed that the net wealth which escaped assessment was not the whole amount of Rs. 1,85,250; but it was only the said amount less the income tax payable in respect of the said amount under the Income Tax Act, 1961, if the said amount was included in his total income and assessed for the year 1962-63. The petitioners put forward this contention in respect of all the assessment years. The claim was repelled by the Wealth Tax Officer. The petitioners filed appeals before the Appellate Assistant Commissioner of Wealth Tax without success. Thereafter they filed revision petitions before the Commissioner of Income Tax, Ernakulam, who is the second respondent in both these cases. The revision petitions of the petitioner in O. P. 1511 of 1969 were dismissed by the Commissioner of Income Tax by a common order dated 30-9-1968, copy of which has been marked as Ext. P7 in that case. In the case of the petitioner in O. P. 1512 of 1969, his revision petitions were dismissed by the Commissioner by a common order dated 19-9-1968, copy of which is marked in that case as Ext. P.9. These writ petitions have been filed to quash the above orders of the Commissioner of Income Tax as well as the original orders passed by the Wealth Tax Officer in the said cases, on the ground that the said orders were contrary to the relevant provisions of the Wealth Tax Act, 1957, in so far as they did not allow the deduction claimed by the petitioners on account of income tax in determining the net wealth.