SWAMINATHAN V N Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE petitioner herein seeks in this writ petition the issue of a writ of certiorari to quash the order dated May 30, 1977, of the respondent, the Commissioner of Income-tax, Tamil Nadu-III, Madras demanding a sum of Rs. 9,000 from the petitioner as interest on the second instalment of tax on wealth paid by the petitioner.

(2.) THE circumstances under which the writ petition came to be filed are as follows :-

(3.) ADMITTEDLY, the assessee did not pay the wealth-tax payable on the wealth disclosed in the petitioner's voluntary returns before the declaration was made. Nor did he file proof of payment along with the declaration. Therefore, the petitioner's voluntary returns before the declaration was made. Nor did he file proof of payment along with the declaration. Therefore, the petitioner cannot be taken to have paid the wealth-tax in accordance with s. 5(1). Then we have to consider whether the petitioner has paid the wealth-tax accordance with s. 5(2) Section 5(2) contemplates a case where a declarant is not in a portion to pay the wealth-tax along with the return for good and sufficient reasons and the Commissioner can extend the time for payment of the wealth-tax which remains unpaid or allow payment of the same in two equal instalments, one by March 31, 1976, and the other by March 31, 1977. Though the assessee in fact has paid the wealth-tax substantially in two instalments, one before March 31, 1976, and the other before March 31, 1977, he has not filed any application seeking permission to pay the amount of wealth-tax in instalments after showing good and sufficient reason for not paying the full amount of wealth-tax in respect of the voluntarily disclosed wealth in accordance with sub-s. (1). Since the payment of wealth-tax has been made by the petitioner without following the procedure contemplated by sub-s. (2), as he did not file any application for extension of time or for payment of instalments after satisfying the Commissioner, the payment of the wealth-tax by the petitioner cannot be said to be in accordance with s. 5(2). Since the payment has not been made in accordance with s. 5(2) the petitioner will not be entitled to the immunity under s. 15(1) in respect of the wealth disclosed by him in his voluntarily disclosed returns, and he has to pay the interest as contemplated by sub-s. (5A) of s. 15 as amended by the Finance (No. 2) Act of 1977, if he wants to get the immunity. Therefore, if the petitioner requires immunity in respect of the wealth disclosed by him under the provisions of the Central Act 8 of 1976, he has to comply with sub-s. (5A) of s. 15 by paying interest on the amount which remained unpaid on April 1, 1976, till the date of payment which in this case is on March 28, 1977. If he fails to pay interest, he will not get the immunity under s. 15(1). Therefore, the demand in this case for payment of interest cannot be said to be an illegal demand. That is a facility given by the statute to the petitioner so as to enable him to get immunity under the provisions of the Act in respect of the net wealth disclosed by him in his returns. If the petitioner does not require any immunity, it is open to him to ignore the demand for payment of interest. Hence, it is in the interest of the petitioner himself to pay interest and get immunity under the provisions of the Act.