Law: Income Tax Act, 1961

Section: 132

Income-tax---Voluntary disclosure---Scope and object of provisions of 1976 Act--¬Disclosure after search and seizure for year in which seizure is made and earlier years---No right to concessional rate of tax---Even if search conducted after act had come into force---Disclosure can be made under S.14 and not S.3---Indian Voluntary Disclosure of Income and Wealth Act, 1976, Ss.3 & 14---Indian Income Tax Act, 1961, S.132. The object of the Voluntary Disclosure of Income and Wealth Act, 1976, is to motivate the voluntary declaration of concealed income and with that object in mind the schedule to the Act prescribes concessional rates of tax. A declaration of concealed income made after books or other documents or valuable assets have been seized cannot be said to be a voluntary disclosure; it is made because the books, documents and assets seized would disclose to the assessing authority the concealment of income. Such concealment could have been in respect of the previous year in which the seizure was made or in respect of any previous year prior thereto. The provisions of section 3(2) of the Act must be read as substantive provisions which debar the assessee, who has declared concealed income for a previous year during which a seizure of his books, documents or valuable assets has been made or for any previous year prior thereto, from getting the advantage of the concessional rates of tax set out in the Schedule. Such assessee is, however, not entirely excluded from the ambit of the legislation for he may file a declaration under section 14 and obtain the comparatively limited---but still substantial--benefits prescribed therein. The words of section 3(2) are clear and unambiguous. The words "in respect of a previous year in which a search has been made" cannot be so read as to mean that, for the provisions of section 3(2) to apply, the search and seizure should have taken place before the Ordinance/Act came into force. The words must be interpreted as they read. So read, they harmonize with the provisions of section 14. To those assessees who have declared concealed income subsequent to a seizure during a previous year, for that previous year or for any…

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