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2000 DIGILAW 1222 (MAD)

M. Kuppan v. Commissioner of Income Tax

2000-12-01

R.JAYASIMHA BABU

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Judgment :- R. JAYASIMHA BABU, J. The petitioner contends that the delay in making the deposit should not come in the way of the declaration being accepted by the authorities. The declaration under the Voluntary Disclosure Scheme was filed on December 23, 1997. The tax had to be paid within 90 days by March 23, 1998. It is not the case of the petitioner that any steps had been taken for paying the tax before that date. It was only on March 24, 1998, that the petitioner purchased a draft for the amount of tax payable and that draft was credited to the account of the Income-tax Department on March 27, 1998 Counsel submitted that the reason for the delay has now been set out in the affidavit filed with the petition, the reason being that the petitioner was in financial difficulties. That reason cannot be regarded as acceptable when the voluntary disclosure scheme is one which provided immunity for interest and penalties for the income that had been suppressed, subject to the terms of the scheme being complied with. Though the contents of the scheme were well known, the petitioner's declaration was filed but money was not deposited along with that declaration. The petitioner chose to take advantage of the 30 days period for payment, and after having exhausted that period, the petitioner bestirred himself by going to the bank and purchasing a draft some thing he should have done earlier. The explanation now offered in the writ petition cannot, in the circumstances, be accepted as affording justification for the delay In view of this position, reliance placed by the petitioner on the decision of this court in the case of E. Prahalatha Babu v. CIT is not of assistance to the petitioner. The decision was rendered on the facts of that case. It was observed that some leniency with regard to the strictness of the period of limitation is permissible. As to whether any leniency should be shown depends upon the facts of the given caseReliance was placed by counsel on a decision of the Punjab and Haryana High Court, in the case of Smt. Laxmi Mittal v. CIT. The Punjab and Haryana High Court itself by a subsequent judgment in the case of Kamal Sood v. Union of India, held that the law had been stated was far too broad in the case of Smt. Laxmi Mittal. The Punjab and Haryana High Court itself by a subsequent judgment in the case of Kamal Sood v. Union of India, held that the law had been stated was far too broad in the case of Smt. Laxmi Mittal. It was also held in the later decision that the Commissioner has no power to condone the delay in making the deposit. The later Bench rested its ultimate decision on the ground that the petitioner before it had not offered any explanation In the case of Smt. Laxmi Mittal, the explanation was that the petitioner therein had met with an accident and by reason of that accident, deposit could not be made and there was delay of one or two days. That decision was followed by the Madhya Pradesh High Court in the case of Sardar Machhi Singh v. CIT. The learned single judge of that court found on the facts before him that there was proper explanation for the delay as the last date on which the payment was required to be made was a bank holiday and the deposit was made two days later, the extent of the delay being one day after excluding the bank holiday. The Supreme Court declined to entertain the SLP against that judgment of the Madhya Pradesh High Court in the case of CIT v. Sardar Machhi Singh (see 2000 245 ITR(St) 70-SLP(C) No. 11153 of 2000). Mere refusal to grant leave to appeal, however, cannot be construed as approval for the view taken by the High Court in that case Learned counsel for the petitioner submitted that the decision of the learned single judge of this court has been approved by the Division Bench by the rejection of the writ appeal. In the judgment of the Division Bench in W.A. No. 2460 of 1999 decided on December 23, 1999 (CIT v. E. Prahalatha Babu, this court observed at paragraph 2 (page 310) as under "We heard the appellant's counsel. It was submitted by the appellant's counsel that the Voluntary Disclosure of Income Scheme is a special procedure and the payment of tax should be made in accordance with the scheme and if there is any violation of the procedure prescribed under the scheme by any person, such persons cannot be given the benefit of the scheme. It was submitted by the appellant's counsel that the Voluntary Disclosure of Income Scheme is a special procedure and the payment of tax should be made in accordance with the scheme and if there is any violation of the procedure prescribed under the scheme by any person, such persons cannot be given the benefit of the scheme. It is true that the said proposition of law is correct." Thus, the Division Bench upheld the contention of the Revenue that the Voluntary Disclosure of Income Scheme is a special scheme and that unless the persons comply with the requirements of that scheme, the benefit cannot be given and that the violation of the procedure prescribed in the scheme would disentitle the persons from claiming the benefit The Division Bench, however, declined to interfere with the order of the learned single judge on the ground that the order was a discretionary one The decision of the Division Bench therefore cannot be read as having laid down the law that the persons filing the declaration belatedly have a right to have the delay condoned on the sole ground that the delay does not exceed three years On the facts of this case, I do not find any warrant for holding that the authorities should have accepted the declaration, even though the requirements of the Voluntary Disclosure of the Income Scheme regarding the period within which the payment should have been made, had not been adhered to and no special reason which would warrant a very special concession being extended to the petitioner, had been put forth before the authorities. The reason put forth before this court is not one which can be regarded as sufficient in law to warrant the exercise of the discretionary power in favour of the petitioner even if it could be held that such discretion is available despite the fact that the Commissioner is not given such power under the scheme to condone the delay in making the paymentThe petition is, therefore, dismissed. Consequently, W.M.Ps. Nos. 9402 and 9403 of 2000 are closed It is made clear that the Revenue has no right to retain the money which the petitioner had deposited on March 27, 1998, unless proceedings have been initiated against the petitioner to tax any disclosed or undisclosed income. Consequently, W.M.Ps. Nos. 9402 and 9403 of 2000 are closed It is made clear that the Revenue has no right to retain the money which the petitioner had deposited on March 27, 1998, unless proceedings have been initiated against the petitioner to tax any disclosed or undisclosed income. If no such proceeding has been commenced as of today, the deposit made by the petitioner shall be returned to the petitioner, if the petitioner seeks such refund.