COMMISSIONER OF INCOME TAX Vs. SURENDRA PAL

JUDGEMENT

(1.) THESE references under Section 256(1) of the Income-tax Act, 1961, have been made by the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur. Since the question of law involved in all these cases is common, they are disposed of by this common judgment. The question of law framed by the Income-tax Appellate Tribunal is as under:

(2.) THE brief facts of the case are that the firm, Madira Kraya Vikraya Sangh, Kota, was carrying on the business of sale and supply of country liquor. THE assessment of the firm was completed under Section 143(3) of the Income-tax Act, 1961, and, while assessing the firm, the Income-tax Officer had allowed refund in respect of the tax which was deposited under the Voluntary Disclosure of Income and Wealth Act, 1976 (hereinafter to be referred to as "the Act, 1976"). A declaration has been submitted under the Act of 1976 by the assessee as one of the partners of the firm had deposited the tax due in accordance with the provisions of the said Act. This refund has arisen on account of allowing the deduction of loss. Subsequently, the Income-tax Officer initiated proceedings under Section 154 read with Section 251 against the assessees who were the partners of the firm on the ground that the Act of 1976 does not provide for refund of the tax which has been paid and, accordingly, the assessment order was rectified and the demand was created. Against these assessment orders, the matter was challenged before the Appellate Assistant Commissioner of Income-tax who has upheld the orders passed by the assessing authority and has held that Section 9 itself imposed an unqualified restriction on set-off of loss or relief granted to the assessee in any appeal in respect of voluntary disclosure of income and, therefore, the appellant is not entitled to set-off of losses or grant of refund. THE assessees challenged this matter before the Income-tax Appellate Tribunal, Calcutta Bench 'D', Camp at Jaipur. THE Income-tax Appellate Tribunal has held that the provisions of Sections 8 and 10 of the Act of 1976 were intended to apply to disclosures made under the provisions of preceding Sections and the intention of the framers of the Act could not be that Section 10 would apply to disclosures made under any of the provisions of the Act, even though they were in accordance with the provisions found in the latter Sections. It was held that there was nothing in Sections 9 and 10 of the Voluntary Disclosure of Income and Wealth Ordinance by which the refund could be denied to the appellants. According to the Tribunal, the provisions of Sub-section (1) of Section 3 and Section 14 have used different phraseology inasmuch as Section 14(6) of the 1976 Act requires that where any tax is paid by the declarant in accordance with the provisions of Section 5 read with Sub-section (5) of this section, credit therefor has to be given to the declarant in the assessment made under the Indian Income-tax Act, 1922, or, as the case may be, the Income-tax Act, 1961, in respect of his total income of the previous year or years and assessment has to be made accordingly.

(3.) UNDER Section 3(1) of the Act of 1976, a person can declare his income liable to tax for any assessment year up to 1975-76. This section is not a bar in respect of any undisclosed income for any previous year falling after the previous year in which the search was made. The provisions of Section 3 and Section 14 are applicable in respect of different fields. Section 14 is applicable for declaration of income in respect of the previous year in which the search was made or any earlier previous year thereto while the provisions of Section 3 are applicable in a case of search and seizure of account books, documents, money, bullion, jewellery or other valuable articles or things for the period subsequent to the previous year in which the search was made.