KHANDELWAL OIL INDUSTRIES Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN compliance with the directions issued by this Court, the Tribunal has stated the case and referred the undernoted questions of law arising out of the order passed by the Tribunal in ITA No. 21/Ind/1982 decided on 2nd Aug., 1983 connectible with RA No. 88/Ind/1983 for the asst. yr. 1974 75 for our consideration and opinion :

(2.) FACTS lie in a narrow compass. The assessee is a firm registered under the Partnership Act and under the IT Act for the asst. yr. 1974 75 for which the accounting year ended on Diwali 1973. In respect of the assessment year in question, the assessee filed its return on 30th June, 1974 disclosing a total income of Rs. 55,702. While proceedings for assessment were pending before the ITO, the assessee made a disclosure of income of Rs. 31,600 on 31st Dec., 1975 under the Voluntary Disclosure of Income and Wealth Ordinance, 1975 in respect of the asst. yrs. 1972 73 to 1975 76. During the course of assessment, the ITO discovered that the assessee had inflated his purchases to the extent of Rs. 33,566. He added the above amount in the income of the assessee. On appeal, the assessee demanded set off of Rs. 31,600 disclosed by it under the aforesaid scheme. The CIT(A) set aside the assessment and remanded the case. The ITO reframed the assessment and allowed benefit of Rs. 7,900, i.e., 1/4th of the declared amount of Rs. 31,600. The declared amount was, thus, treated as applicable to four asst. yrs. 1972 73 to 1975 76, as the assessee had not given any bifurcation of the amount yearwise. The assessee contended that credit is required to be given for any one of the four years. The assessee eventually made the bifurcation as noted below :

(3.) THE CIT, Bhopal issued a certificate in favour of the assessee showing disclosure of the amount as Rs. 31,600. This amount is built up of Rs. 21,130 as cash, Rs. 8,890 as tax paid and Rs. 1,580 as security (Annexure D). In this certificate dt. 5th Oct., 1976, the assessment years are mentioned as 1972 73 to 1975 76. No effort was made to ask the assessee to specify a particular year or to state whether credit is sought in respect of all these four years. At a later stage, the assessee came forward with specification and contended that a sum of Rs. 31,597 out of the disclosed amount of Rs. 31,600 be taken as relating to asst. year 1974 75. As the disclosure is voluntary in nature and is intended to confer benefit on the person making the disclosure, the disclosure should be applied according to the wishes of the person disclosing the same. The Ordinance does not seem to "confer any different discretion on the Department". As it is luculent, the Ordinance begins with the expression like "Voluntary Disclosure". That being so, it cannot be permitted to be applied contrary to the wishes of the person disclosing the same.