SUDARSANABABU S Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) The petitioner is challenging Ext. P2 whereunder petitioner's application for benefit under the Voluntary Disclosure of Income Scheme introduced by the Finance Act, 1997 was rejected by the Commissioner of Income Tax. I heard counsel for the petitioner and Standing Counsel appearing for the respondents.

(2.) The petitioner made application under VDIS under S.64(1) of the Finance Act, 1997 on 30/12/1997. Though the application was to be filed before the Commissioner of Income Tax, petitioner submitted the application before the Assessing Officer at Kollam on 30/12/1997. The officer immediately transmitted the same to the concerned authority namely, the Commissioner of Income Tax at Trivandrum. The application reached the Commissioner on 31/12/1997 and Ext. P4 receipt was also issued from the Commissioner's office. Though VDIS application has to accompany payment of tax in terms of S.66 of the Act, S.67 of the Finance Act, 1997 authorises payment of tax along with interest within 90 days of making declaration. The petitioner admittedly did not remit the tax along with the declaration in terms of S.66 of the Act. However, petitioner remitted the tax along with interest under S.67 on 31/03/1998. According to the Commissioner of Income Tax, payment ought to have been made on or before 30/03/1998 and on account of the delay of one day in making payment, petitioner was not entitled to the benefit of VDIS. After declining the benefit under VDI Scheme, notice under S.148 was issued to the petitioner for bringing to tax the escaped income which again is based on information available in the VDIS declaration.

(3.) Counsel for the respondent contended that the authority to entertain the application under the VDI Scheme is the Commissioner of Income Tax and therefore, the date of filing of declaration has to be reckoned with reference to the date on which the application was received by the Commissioner of Income Tax at Trivandrum, which is 31/12/1997. Counsel appearing for the petitioner contended that the respondents' argument is not tenable because the declaration to the Commissioner was received by the Assessing Officer at Kollam on 30/03/1997 and the balance i.e. transmission of the application by the Assessing Officer to the Commissioner, is with the department. I am of the view that the department's contention that date of filing the declaration has to be reckoned from the date on which the Commissioner actually received the application at Trivandrum is not tenable for the simple reason that if the application received by the Assessing Officer at Kollam reaches the Commissioner on 1st January or any later date on account of the delay taken by the Assessing Officer in transmitting the application, it should not lead to denial of benefit of the scheme to the applicant. In this case it so happened that the application reached in one day from the Assessing Officer at Kollam to the Commissioner at Trivandrum. However, even if there was a delay of one or two days in the application reaching the Commissioner, Trivandrum from the Assessing Officer at Kollam, then obviously department cannot reject the application on account of such delay because application should be deemed to have been received by the Commissioner as on the date on which his subordinate officer received it at Kollam. Even though the Assessing Officer is not the authority to entertain the application under VDIS and under S.64(5) and the Commissioner is the authority to receive the application, when the assessee makes the declaration to the Commissioner, but delivers it to the Assessing Officer and such officer accepts it, then the date of application to the Commissioner should be certainly the date of receipt by the Assessing Officer, no matter how much time he may take to deliver it to the Commissioner. If the department's claim is accepted, then the same will lead to an anomalous situation that applications received in time by the assessing authorities would have to be rejected, if such applications did not reach the Commissioner on the last date. Therefore, I am of the view that the department's case that date of making declaration is 31/12/1997 when the Commissioner's office issued receipt of the same, is not correct and the date of receipt of the application is 30/12/1997 when the petitioner delivered the application before the Assessing Officer. Ext. P4 is only an acknowledgement of receipt of application and the date given therein has no significance because assessee can always plead that the application was filed on 30/12/1997 when it was delivered to the Assessing Officer.