B.N.Banerjee, J. - (1.) For the assessment years 1938-39, 1939-40, 1940-41, 1941-42. 1942-43 and 1943-44, the petitioner was assessed to income-tax by the respondent No. 2 Income-tax Officer, under the Income-tax Act, 1922, on the basis of returns filed by him. The demands made on the basis of such assessments were all paid by him.
(2.) It now appears, however, that the petitioner had not made full and complete disclosure of his income for the several years mentioned above.
(3.) On May 21, 1951, there was published, in the Statesman, a press note concerning a concessional scheme for speeding up collection of income-tax in arrears, coupled with the allurement that persons making voluntary or quasi voluntary disclosures of secreted income, before a prescribed date, would be allowed immunity from prosecution. A copy of the press note was forwarded to the Solicitor for the petitioner by Mr. S.K. Mondal, Central Government Solicitor. The press note reads as follows: "New Delhi, May 20--The Government of India have decided to introduce immediately a concessional scheme under which income-tax assessees will be allowed to pay their arrears according to an agreement instalment plan. The concession, which will be in operation for a limited period, will apply provided the outstanding taxes are paid by March 31, 1952. In the meantime, properties of assessees, which are under 'attachment' by the authorities, will not be sold. The concessional scheme of arrears payment will, however, not apply to cases in which settlement has been made by the Income-tax Investigation Commission. The scheme announced today, forms part of a special drive by the Government to speed up disposal of pending cases and realisation of tax arrears. Plans for the drive were considered at a recent conference of the Commissioners of Income-tax held in New Delhi, under the chairmanship of Mr. Mahabir Tyagi, Minister of State for Finance. According to a recent assessment, the announcement said, the tax arrears on April 1, this year stood at Rs. 152.32 crores and the number of pending assessments at about 541.000. It has also been decided that persons making voluntary or quasi-voluntary disclosures, before August 31, 1951, will he allowed immunity from prosecution. The entire amount of arrears of Rs. 152.32 crores, it is pointed out, does not, however, represent recoverable demand, as quite a substantial part involves cases which are pending settlement of relief claims, disposal of appeals and completion of certificate proceedings, and also includes amounts due from persons who have no assets, have left India, or gone into liquidation. REMISSION OF PENALTIES The special drive is intended to collect the arrears which are immediately realisable. The concessional payment scheme has been evolved in view of difficulties of assessees in paying in lump sum accumulated arrears of a long period. According to further details of the scheme, if payments are made punctually under the agreed instalment plan, any penalty imposed for nonpayment of taxes (but not any penalty imposed for concealment or income) will be reduced or remitted according to the circumstances of the case after the taxes have been fully paid. The concessional scheme further provides that assessees will be allowed to bring into their accounts so much cash as represents an estimated intangible addition to the income declared. This will involve no penalty, prosecution or further tax. Thus cash representing the difference between the assessed income and the income determined by the department according to the assessee's accounts (by disallowance of sums appearing in accounts) will be allowed to be introduced without further taxation, provided the cash introduced is utilised for payment towards outstanding demands and the grounds of appeal or revision against such estimated addition are withdrawn. In respect of voluntary disclosures, it has also been decided that, in imposing any penalties, the department will take into account all the mitigating circumstances including the speed with which such disclosures are made and the extent of co-operation received from the assessee. The assessees' capacity to pay both the arrears and the current tax liabilities will be taken into account while fixing the period allowed for payment and also the rate of instalment. Other measures envisaged relate to improvement of the administrative organization of the department and rationalisation and simplification of the existing procedure with a view to ensuring that the emphasis is laid on the broader and more important aspects of a case rather than on a meticulous security (sic) of minor issues.";