GOPALAKRISHNAN NAIR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The petitioner is an Advocate practicing at Thiruvananthapuram. He is an assessee to Income Tax. He submitted a return under the Voluntary Disclosure of Income Scheme, 1997 (hereinafter referred to as 'V.D.I.S.') on 31st December, 1997 declaring a total income of Rs.4,83,000/- and the tax payable thereon was Rs. 1,44,900/-. The petitioner did not remit the tax due along with the declaration. However, he had paid the tax together with interest due thereon for the period from the date of declaration till the date of payment on 30th March, 1998. It so happened that the interest paid was deficit by Rs. 360/-. This, according to the petitioner, happened on account of the fact that though the petitioner had calculated the interest on the tax due for the period of three months at Rs. 6,519/-, by mistake the petitioner had paid only Rs. 6,1591-. The respondent by notice dated 15th April, 1998 (Ext. P1) informed the petitioner that the interest remitted is less by Rs. 360/-. The petitioner immediately on receipt of the said communication remitted the sum of Rs. 360/- and submitted a reply dated 29th April, 1998 (Ext. P2) explaining the circumstances under which the deficit occurred. The respondent, however, by communication dated 1st May, 1998 (Ext. P3) treated the declaration submitted by the petitioner as invalid. The petitioner has challenged the said communication in this proceedings.

(2.) Shri Jayasankar Nambiar, learned Counsel appearing for the petitioner submits that the declaration was submitted well within the time provided under the scheme and the remittance of the tax and interest calculated thereon also was paid well within the time provided therefor. He further submitted that it so happened that instead of remitting interest of Rs. 6,519/- the petitioner happened to remit only Rs.6,159/- by mistake and that is how deficit of Rs.360/- occurred. The Counsel further submitted that immediately on receipt of the communication (Ext. P1) from the respondent the petitioner remitted Rs.360/- and submitted a reply. The Counsel brought to my notice me provisions of S.67(1) as well as the provisions of sub-s.(2) thereof of the V.D.I. Scheme which according to the Counsel will settle the issue. The Counsel pointed out that S.67(l) of the scheme provided for payment of tax due as per declaration filed within three months from the date of filing the declaration together with interest due thereon from the date of filing of the declaration till payment before the expiry of three months from the date of declaration. The Counsel, however, submits that even if there is some delay in payment of the interest on the tax due as per the declaration within the time specified in sub-s.(1) of S.67 of the Scheme, such delay or non payment of interest on the tax due cannot have the effect of nullifying the declaration. Counsel submits that the consequences of non compliance of the provisions of S.67(1) is provided in sub-s.(2) itself.

(3.) Shri George K. George, Standing Counsel (Government of India), Taxes, on the other hand submits that S.67(l) is absolute in terms and unless the tax declared in the return together with the interest thereon is not paid within three months from the date of filing the declaration S.67(2) will come into play and consequently the declaration will become invalid. The Counsel also submitted that even though S.67(2) refers only to the tax element and there is no reference to the interest payable under S.67(1) the cumulative effect of the provisions of S.67(1) and (2) is that both the tax and interest thereon have to be paid within the three months specified in S.67(l) failing which the ' consequence specified in sub-s.(2) would follow. The Counsel also relied on the decision of the Supreme Court in Hemalatha Gargya v. C.I.T. ( 2003 (259) ITR 1 ) and submits that the Supreme Court has clearly specified the parameters so far as the availing of the benefit of V.D.I. Scheme. Standing Counsel states that it is specifically stated that both the tax and interest has to be paid within the time specified in S.67(1) of the Scheme and that there is no question of any equitable consideration. The Standing Counsel further submits that if any liberal view is taken in the matter that will have an adverse impact on the very efficacy of the Scheme.