LAXMI MITTAL VS COMMISSIONER OF INCOME-TAX, 2000 PTD-HARYANA-HIGH-COURT-INDIA 3526 (1999)

Income-tax---

----Voluntary disclosure of income---Disclosures to be made before 31-12-1997---Assessee making disclosure on 27-12-1997---Payment to be made alongwith declaration or within 90 days of declaration ---Assessee making payment on 30-3-1998---Delay due to circumstances beyond her control---Since last date for making disclosure was 31-12-1997 last date for payment of tax would expire on 30-3-1998---Commissioner not justified in rejecting declaration of assessee as "non est"---Voluntary disclosure of Income Scheme, 1997---Indian Finance Act, 1997, S.67.

The assessee in spite of having declared her income on December 27, 1997, was unable to pay tax alongwith interest within 90 days of declaration, i.e., March 27, 1998, due to circumstances beyond her control. The payment was made on March 30, 1998, after a delay of three days. The Commissioner of Income-tax held the declaration under the scheme "non est". On a writ petition:

Held, allowing the petition, that since the declaration could have been made on or before December 31, 1997, the consequent last date for payment of tax would expire on March 31, 1998. The provisions of a taxing statute are to be construed liberally and in favour of the assessee. In case tax was not deposited alongwith the declaration, interest at the rate of 2 per cent for every month or "part of a month" could be charged. Therefore, the order passed by the Commissioner of Income-tax was liable to be set aside.

Sanjay Kaushal for Petitioner.

R. P. Sawhney, Senior Advocate with Rajesh Bindal for Respondent.

JUDGMENT

The petitioner is aggrieved by the order, dated July 27, 1998, passed by the Commissioner of Income-tax, Patiala, by which the declaration under the Voluntary Disclosure of Income Scheme, 1997, has been "treated as non-est". A few facts may be noticed.

The Government of India had introduced the Voluntary Disclosure of Income Scheme, 1997. Under this scheme a person was entitled to make the declaration of the income by December 31, 1997. Thereafter, under section 67 of the scheme, the tax and interest, etc., if any, had to be paid within three months. The petitioner made a declaration of an amount of Rs.20,42,274. This declaration was made on December 27, 1997. Along with the declaration, the petitioner had paid an amount of Rs.2,682 by way of tax. The remaining amount of tax, viz., Rs.5,50,000 could have been deposited on or before March 27, 1998. The petitioner submits that when she was going to get the money for making the deposit, she had an accident. Along with her husband, she was admitted to a nursing home. A copy of the certificate, dated March 28, 1998, issued by Dr. Raj Kumar Sharma has been produced as annexure-P-3. In this situation, the deposit could not be made on March 27, 1998. The amount of Rs.5,50,000 alongwith Rs.33,000 as interest was actually deposited on March 30, 1998. Thus, according to the respondent, there was delay of three days. On this account, the declaration made by the petitioner has been treated as non-est. The petitioner claims that the delay had occurred on account of reasons totally beyond her control. Under the circular, dated September 3, 1998, the authority has the discretion to extend the period. In the present case also the discretion should have been exercised. Its failure to do so is arbitrary and unfair.

The respondent contests the petitioner's claim and maintains that in view of the provisions of section 67 of the scheme the deposit had to be made within three months. On account of failure, the declaration is non-est. Thus, the period cannot be extended and the order passed by the Commissioner is legal and valid.

Learned counsel for the parties have been heard.

It is the admitted position that under the Scheme a declaration could be made on or before December 31, 1997. It is also not disputed that the deposit of the tax could be made simultaneously with the declaration or within three months thereafter. In case the tax was not deposited alongwith the declaration, interest at the rate of 2 percent. for every month or "part of a month" had to be made. Still further, it is clear to us that since the' declaration could have been made on or before December 31, 1997, the last date for deposited of tax alongwith interest would expire on March 31, 1998. We may also add that the provisions of a taxing statute are normally construed liberally and, if possible, in favour of the assessee. Added to all this is -the fact that petitioner has given an explanation for her failure to make the deposit on March 27, 1998. She had met with an accident. She had got injuries. She was admitted to a nursing home. These facts have not even been denied. The respondent has not disputed the correctness of the averment made by the petitioner.

Mr. Sawhney submits that section 67 lays down as inflexible rule an according to this provision the deposit has to be made within a period of three months from the date of declaration. Any failure renders the declaration and the deposit non-est. This contention cannot be accepted. The Government of India has itself issued a circular, dated September 3, 1998. By this circular it has been, inter alia, provided by the board that the period for calculating interest will be 90, days from the date of declaration. If the 90th day happens to be a bank holiday, payment on the 91st day being the next working day would be valid. Thus, it is clear that section 67 does not embody a totally inflexible rule. When things are beyond the control of the citizen, certain moving space is normally allowed. This is precisely what the petitioner is wanting in the present case.

Taking the totality of circumstances into consideration it appears that the petitioner was unable to make the deposit on account of reasons beyond her control. The Revenue has suffered no loss as the interest for three months, viz., Rs.33,000 has been deposited by the petitioner. Still further, it is also clear that a declaration under the scheme could be made on or before December 31, 1997. The tax along with interest could have been deposited on or before March 31, 1998. Any deposit before that should not be considered as being beyond the scheme. In any event, the interest having been paid, the Revenue has suffered no loss.

Resultantly, the order passed by the Commissioner on July 27, 1998, a copy of -which has been produced as annexure-P-4 with the writ petition, is set aside. In the circumstances, there shall be no order as to costs.

M.B.A./73/FC ??????????????????????????????????????????????????????????????????????????????????? Order accordingly.