The Madhya Pradesh High Court has held that the voluntarily disclosed income is not liable to be included with regular income declared in the return under section 139 as tax paid under VDIS is not liable to be refunded.
The petitioner, an individual has first availed the benefit of VDIS by submitting the return 01.07.1997 and 31.12.1997 for the assessment year 1993-94 to 1997-98 and paid the income-tax @ 30%. Thereafter, he filed the belated IT returns under Section 139 on 23.01.1998 and deducted income so disclosed in VDIS i.e. voluntary disclose income. For the assessment year 1993-94 to 1997-98, he has declared his income Rs.13,74,947/- with the description of assets i.e. cash, debtor, share and bank account and paid income tax Rs. 4,12,482/- on 26.12.1997. Thereafter, he submitted return for those two assessments years 1996-97 and 1997-98 by declaring income from salary, NSC, Bank, Unit Trust, Mutual fund etc Rs.3,74,234/- and deducted the income under VDIS and claimed tax liability ‘Nil’ to claim the refund of Rs.49003/-. The Income Tax Officer has rejected the returns of the AY 1996-97and1997-98 under Section 143 (1) (4) of the Income Tax Act.
The petitioner contended that he could not file the income tax return before the Income Tax Officer in time due to circumstances beyond his control, secondly, he is entitled to refund of Rs. 45,000/- as he had paid the Income-tax under VDIS-1997 and again payment of tax on the said income does not arise, therefore assessment be revised for the assessment of the year 1996-97 and 1997-98 for granting the refund of Rs. 45,000/- and 92,064/- respectively.
A division bench of the High Court comprising Shri Justice Vivek Rusia & Shri Justice Amar Nath observed that this is not the intention of the VDIS.
“The voluntarily disclosed income is not liable to be included with regular income declared in the return under section 139 as tax paid under VDIS is not liable to be refunded at any cost. The income tax return submitted under Section 139 is not liable to be reopened after availing of the VDIS. The source of income shown for voluntary disclose income and income source shown in the return under Section 139 is altogether different. Under Section 64 of the Finance Act only those persons are entitled to give declaration in respect of income chargeable under the tax under the Income Tax Act for any assessment year, firstly for which he has failed to furnish return under Section 139, secondly, which he has failed to disclose in a return of income furnished by him under the Income Tax Act before the date of commencement of the scheme, thirdly, which has escaped assessment by reason of the omission or failure. As per clause sub-clause (a), in this case, the petitioner did not furnish any return under Section 139 before 31.12.1997, therefore, in voluntarily disclosed income, he ought to have disclosed his all income from all the sources because till 31.12.1997, he did not disclose his any of the income by submitting the return under Section 139. He submitted the return under section 139, after 31.12.1997 i.e. 23.01.1998 to bring his case within clause 64 (1) (b),” the Court said.
SUBHASH CHANDRA vs COMMISSIONER OF INCOME TAX INDORE REGION
CITATION: 2022 TAXSCAN (HC) 234
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
