Decided on March 22,1999

A.K. SONI Appellant


- (1.) IN pursuance of the provisions contained in the Voluntary Disclosure of INcome and Wealth Act, 1976, the petitioner made some voluntary disclosures.
(2.) THE above statute deals with three types of voluntary disclosures. The first is covered by Section 3 of the Act. THE second type of disclosure is visualised by Section 14. This disclosure of income is for those cases where a search and seizure has been made. The third type of disclosure is dealt with by Section 15. This deals with voluntary disclosure of wealth. The petitioner submits that the voluntary disclosure in the present case was made in terms of Section 14. He had paid the tax on the disclosed income in two phases, i.e., 50 per cent, before 31st of March, 1976, and 50 per cent, by 31st March, 1977. It is submitted once that the payment was made in terms of Section 14, then the Revenue was not justified in levying interest. It is this levy of interest which is the subject-matter of challenge in this petition. Learned counsel appearing for the respondent-income-tax authorities submits that the interest was payable and this interest was to be paid in terms of Section 6 of the Act. It is submitted that earlier an Ordinance in the shape of the Voluntary Disclosure of Income and Wealth Ordinance of 1975 came into existence. If the amount of income-tax payable in respect of the voluntarily disclosed income was not paid on or before the 31st day of March, 1976, then the declarant was liable to pay simple interest at 12 per cent, per annum on the amount remaining unpaid after the 1st of April, 1976. It is submitted that this amount was payable in terms of Section 6 of the Ordinance which Ordinance assumed the shape of the Parliament Act 8 of 1976. The short question which thus arises is as to whether the Revenue was within its rights to levy interest in terms of Section 6 or there is immunity from payment of interest when disclosure of income is made in terms of Section 14.
(3.) LEARNED counsel appearing for the petitioner submits that the petitioner disclosed his income in terms of Section 14. It is submitted that in terms of Section 14(5), the immunity provided under Section 14(1) was not to be available to the declarant unless and until the tax chargeable in respect of the income of the previous year or years for which the declaration was made, was paid in accordance with the provisions of Section 5. It be seen that in terms of Section 5, the petitioner could pay one-half of the amount of the income-tax in respect of the voluntarily disclosed income by the 31st day of March, 1976, and the remaining by the 31st day of March, 1977. Section 6 provided that if some tax remains unpaid up to the 1st day of April, 1976, then interest was to be payable. It may further be seen that Sub-section (5A) was inserted in Section 14. It was provided that a declarant not paying the tax in accordance with Section 5 would continue to enjoy the immunity provided he complied with the statutory requirements by the 1st day of January 1978.;

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