SHASHI DEVI Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) BY this petition under Article 226 of the Constitution of India, the petitioner seeks to challenge the action of the respondents in issuing the commission under Section 131(1)(d) of the Income-tax Act, 1961, to the Valuation Officer and to quash the notices dated March 5, 1998, and June 25, 1998, issued by the Valuation Officer and to direct the Assessing Officer-respondent No. 1 to accept the valuation report submitted by the petitioner while disclosing her income under the Voluntary Disclosure of Income Scheme, 1997.

(2.) THE brief facts necessary for disposal of the petition are that the petitioner, who is carrying on business of repairs of electrical fittings, etc., is assessed to income-tax by respondent No. 1. For the assessment year 1996-97, she filed a return showing an income of Rs. 43,950. According to her, she started raising a construction of the property in the financial year 1993-94 and completed it by 1995-96. According to the petitioner, she had invested an amount of Rs. 10,89,000 in construction of the aforesaid house/ property. Out of this amount, she could explain the expenditure of Rs. 5,42,544 but the balance amount of Rs. 5,46,756 could not be explained by her, and, therefore, she made a disclosure under the Voluntary Disclosure of Income Scheme, 1997, promulgated by the Government in accordance with Section 62 of the Finance Act, 1997 (Act No. 26 of 1997). THE petitioner submits that according to the scheme a person could make a declaration in accordance with the provisions of Section 65 of the Finance Act for any assessment year of any income chargeable to tax which has escaped assessment by reason of omission or failure on the assessee's part to make a return or to disclose fully or truly all material facts necessary for his assessment or otherwise. According to the petitioner, the declaration so made has to be accepted by the Commissioner of Income-tax and such income is not to be included in the total income. THE petitioner not being in a position to explain her income made a declaration to the Commissioner on December 30, 1997. THE said disclosure was accepted by the Commissioner of Income-tax under Section 68(2) of the Scheme. It is contended that the Government had assured that in respect of investment made in the construction of a house property if any declaration is made it would not be a subject-matter of an investigation. Placing reliance upon an answer to question No. 16 of Circular No. 754 (see [1997] 226 ITR (St.) 8), dated June 10, 1997, it is contended that the Department could not insist upon any valuation certificate along with the declaration and it would be the responsibility of the declarant to declare the correct value. Referring to the answer to question No. 46 of Circular No. 755 (see [1997] 226 ITR (St.) 33), dated July 25, 1997, it is contended that no valuation could be got done by the Department but if on the basis of other information it is found that a higher amount was invested than the amount disclosed, then suitable proceedings under the Act can be taken in respect of the difference between the true value of investment and the amount disclosed. THE petitioner submits that in view of the declarations made by the Government, the Assessing Officer should not have issued a notice purporting to be under Section 131(1)(d) of the Act. According to the petitioner, before making the declaration the property was got valued by the approved valuer who had given the correct valuation and as the correct valuation was given by the petitioner, there was no scope for invoking the provisions of Section 131(1)(d) of the Act. THE petitioner says that issuance of the notice under Section 131(1)(d) of the Act and the commission issued to the Valuation Officer, etc., are bad and the same deserve to be quashed by this court.

(3.) THE conditions set out in Clauses (a), (b) and (c) of Section 64(1) are not cumulative but alternative. Fulfilment of any of the conditions specified in the abovesaid clauses entitles an eligible person to make a declaration under Section 65 in respect of the undisclosed income.