P.N. Khanna, J.
(1) The question that has been raised in this petition is whether the Income-tax officer can reject the Explanationn of an assessed in respect of any sums found credited in his books, on the ground that the nature and source of the said sum in the hands of the depositors in whose names the credit stands, has not been satisfactorily explained merely by the said depositor, having declared it as his income in pursuance to the voluntary disclosure scheme set out in Finance (No. 2) Act of 1965 (Act'No. Xv of 1965).
(2) The petition has been filed by three petitioners. Messrs Jain Brothers, a partnership firm, is petitioner No. 3 and consists of two partners, Rattan Lal, petitioner No. 1, and Khazanchi Lal, petitioner N'o- 2. The firm is being assessed in the status of a registered firm under section 184 of the Income-tax Act, 1961, herein called 'the 1961 Act', while petitioners Nos. I and 2 are being assessed in the status of individuals. The Income-tax officer has been imp leaded as respondent No. I, while the Additional Commissioner of Income-tax is respondent No. 2. The Commissioner of Income-tax is respondent No. 3, and the Chairman, Central Board of Direct Taxes is respondent No. 4.
(3) During the assessment year ending on March 31, 1967. the petitioners filed returns of their income under section 139 of the 1961 Act. The Income-tax officer, respondqnt No. 1, completed the assessments under section 143 of the 1961 Act and while framing the assessment of petitioner No. 3 added back a sum of Rs. 30,000.00 as income from undisclosed sources. This sum related to three credits standing in the firm's books in the names of Narinder Kumar Jain, son of Rattan Lal, petitioner No. 1 (Rs. 10,000.00), Smt. Dil Bahari Jain, wife of Rattan Lal, (Rs. 15,000.00) and Smt. Chandravati Jain, wife of Khazanchi Lal, petitioner No. 2 (Rs. 5,000.00), as loans advanced to the firm. On being asked the petitioner explanied that these amounts belonged to the aforesaid three creditors or depositors, which had been duly declared by them under the voluntary disclosure scheme under the Finance Act and income-tax had been paid in respect thereof and that these amounts were later deposited by the aforesaid depositors with respondent No. 3. The Income-tax officer was, however, of the opinion that the aforesaid depositors were not in a position to earn the said amounts and that the purpose of the voluntary disclosure scheme was to enable the persons who had earned some income prior to March 31, 1964, but had not paid the tax thereon to come forward to get the tax liabilities settled. The immunity under section 24 of the Finance Act was conferred on the declarants only. If it was found that the income was declared by a person to whom it did not belong, there was nothing, according to the Income-tax Officer, to prevent it being taxed in the hands of the person to whom it actually belonged. The onus, according to him, rested entirely on the assessed under section 68 of the 1961 Act. The Explanationn offererd by the petitioners in this case was, thereforee, held to be unsatisfactory and the credits standing in the aforesaid names were treated as unexplained cash credits and were charged to tax as income of the firm (petitioner No. 3) from undisclosed sources. Petitioner No. 3 filed a revision application under section 264 of the 1961 Act against the order of the Income-tax Officer. The Additional Commissioner of Income-tax Delhi, however, agreed with the Income-tax Officer and held that the disclosures granted immunity from further taxation only to the persons who disclosed the income. He was of the opinion that the credits represented concealed income of the petitioner firm and rejected the revision application. It is under these circumstances that the petitioners have filed this writ petition praying for the issue of a writ, order or direction in the nature of mandamus or certiorari, inter alia, setting aside the aforesaid additions to the total incomes of the firm. petitioner No. 3, as its income from undisclosed sources and in the alternative declaring that the said sum was taxable, if at all, in the assessment year prior to March 31, 1964 and not in the assessment year 1967-68.
(4) Mr. R. H. Dhebar, the learned counsel appearing on behalf of the respondents, raised two preliminary objections. Firstly, that the order of the Additional Commissioner of Income-tax, respondent No. 2, was an order based on appreciation of evidence and was final, the determination made by him was a finding of fact, to reopen which this court will not exercise its jurisdiction under Article 226 of the Constitution. Secondly, that the petitioners had an alternate remedy open to them by going in appeal to the Appellate Assistant Commissioner against the order of the Income-tax Officer and thereafter before the Tribunal. The petitioners could then in an appropriate case ask for a reference to this court. The petitioners had by-passed the said statutory remedies available to them and had approached this court by first going in revision before the Commissioner; which they should not be allowed to do. Both the contentions of the learned counsel, however, are not tenable. In the first place, it is not a question of reopening a finding of fact recorded by the Income-tax Officer. The questions involved are whether the finding of the Income-tax Officer is supported by any evidence and whether a declaration made and tax paid by a declarant under the voluntary disclosure scheme as envisaged in the Finance Act can be questioned to ascertain the nature and source of the sum so declared by the declarant as its owner, for the purpose of determining if it was still in the nature of an unexplained cash credit, appearing in the books of a third party. These are substantial questions of law and by interpreting them wrongly the Income-tax Officer cannot assume jurisdiction which may not vest in him. There is, thereforee, nothing to prevent this court from examining these questions in exercise of its jurisdiction under Article 226 of the Constitution. The second objection is equally devoid of force. inasmuch as a revision to the Commissioner is a remedy provided under the 1961 Act itself. It cannot be said that this remedy was pursued in a wrong forum which did not have jurisdiction. There is no other remedy under the said Act, which the petitioners can avail of as against the order in revision. The petitioner, thereforee, cannot be debarred from invoking the aid of Article 226 of the Constitution.
(5) Coming to the merits, Mr. G. C. Sharma for the petitioner contended that the intial onus which lies on the assessed under section 68 of the 1961 Act to give an Explanationn for any sum found credited in his books was duly discharged, in this case, when the petitioners pointed out that the amount so disclosed belonged to persons, who had disclosed it in pursuance to the voluntary disclosure scheme set out in the Finance Act. This, according to him, was the end of the matter and the Income-tax Officer had no jurisdiction to question the veracity of the said disclosure. According to him, section 24 of the Finance Act put a seal of finality on the disclosure so made and provided a conclusive proof of the ownership of the amount so declared. This amount is required to be charged to income-tax as if it were the total income of the declarant notwithstanding anything contained in the Indian Income-tax Act, 1922, herein called 'the 1922 Act', or the 1961 Act. The tax payable on that amount, said the learned counsel, when paid, was not refundable in any circumstances and the declarant was not entitled to reopen any assessment or reassessment made under the Act, nor could he claim any set off or relief in appeal, reference or revision or in other proceedings in relation to any such assessment or reassessment such being the case, Mr. Sharma contended, the Income-tax Officer, while dealing with the case of another assessed in whose books he may find such sum credited in the name of the person who had made the declaration under section 24 of the Finance Act, cannot enter into an investigation to determine the nature and source of the said sum in the hands of such person and come to a finding that the sum so declared as his, was actually not his. The Income-tax Officer in the present case having reopened and questioned the veracity of the declarations made by the depositors under the Finance Act and having treated the said voluntarily disclosed amounts as the income of the assessed firm, petitioner No. 3, was acting beyond jurisdiction and the petitioners in the circumstances, were entitled to the reliefs which they had prayed for in the present petition.
(6) Mr. Dhebar, on the other hand, contended that the voluntary disclosure scheme gave a limited immunity to the declarant and the benefits which it gave to him were restricted to him alone. The Income-tax authorities were, thereforee, entitled to determine whether the amount disclosed was or was not the income of the declarant, while dealing with the case of another assessed under section 68 of the 1961 Act. The legal fiction created by section 24 of the Finance Act was restricted to the voluntary disclosure scheme itself. The protection enjoyed by the declarant under that scheme extended only to the amounts so declared being not liable to be added, in any assessment, in the income of the declarant. There was no absolute finality attached to the declaration, especially when the nature and source of the sum declared was being determined for the purpose of its inclusion in the income of an assessce other than the declarant. For, if the legislature intended to impart such a finality, it would have so provided in the Finance Act itself, which it had not done. Mr. Dhebar also submitted that there was no double taxation involved in the scheme as it was not the same tax levied on the same person and even if any double taxation was involved the same was permissible as the statute had not prohibited it. There was, thereforee, nothing, according to him, which prevented the Income-tax Officer from investigating into the nature and source of the sums found credited in the books of the petitioners and to reject their Explanationn to the effect that the sums belonged to persons who had made declarations about them under the Finance Act.
(7) In order to better appreciate the respective contentions of the counsel, it is necessary first to examine the relevant provisions of section 24 of the Finance Act, which constituted the scheme under which the voluntary disclosures of income were made by the depositors.
(8) Section 24 of the Finance Act has 16 sub-sections. Sub-section (1) provides that where any person makes on or after August 19, 1965 and before April 1, 1966 a declaration in accordance with sub-secion (2) in respect of the amount representing income chargeable to tax under the 1922 Act or the 1961 Act, for any assessment year commencing on or before April 1, 1964 for which he has failed to furnish the return within time or which he has failed to disclose in his return or which has escaped assessment by reason of his omission or failure aforesaid, he shall, notwithstanding anything contained in the said Acts, be charged to income-tax in accordance with sub-section (3) in respect of the amounts so declared as reduced by any amount specified in any order made under sub-sections (4) or (6). Sub-section (2) requires the declaration to be made to the Commissioner disclosing, inter alia, the amount of income declared, giving, where available, details of the previous year or years in which the income was earned and the amount pertaining to each such year, and whether the amount declared is represented by cash (including bank deposits), beullion, investment in shares, debts due from other person, commodity or any other assets and the name in which it is held and location thereof. Subsection (3) creates a legal fiction by providing that income-tax shall be charged on the amount of the voluntary disclosed income at certain specified rates 'as if such amount were the total income of the declarant'. Under sub-section (4) the Commissioner is required, within 30 days, if satisfied that the whole or any part of the amount of income declared has been detected or deemed to have been detected by the Income-tax officer prior to the date of declaration, to make an order in writing to that effect and forward a copy thereof to the declarant. Any person who objects to such an order may, within 30 days, apply to the Board under subsection (5) requesting for appropriate relief in the matter. The Board may pass such orders under sub-section (6) as it thinks fit. Subsection (7) provides that the Commissioner shall forward the declaration to the Income-tax Officer together with a copy of his order, if any, under sub-section (4) and the Income-tax Officer shall thereupon determine the sum payable by the declarant in accordance with sub-section (3) and if the order of the Commissioner has been varied by the Board under sub-section (6), also the sum so payable in respect of the variation made, and shall serve on the declarant a notice of demand under section 156 of the 1961 Act and the provisions of Chapter Xv and Chapter XVII-D of and the Second and the Third Schedules to, that Act, shall as far as may be apply accordingly, as if the said sum were a sum payable under that Act. Sub-section (8) makes the order under sub-section (6) final. Sub-section (9) provides that any amount of income-tax paid in pursuance of a declaration made under this section shall not be refundable in any circumstances, It further provides that no person, who made the declaration shall be entitled in respect of the voluntary disclosed income or any amount of tax paid thereon to reopen any assessment or re-assessment made under the 1922 Act or the 1961 Act or the Excess Profits-tax Act, 1940 or the Business Profits Tax Act, 1947 or the Super Profits Tax Act, 1963 or the Companies (Profits) Sur-tax Act, 1964 or claim any set off or relief in any appeal, reference, revision or other proceeding in relation to such assessment or reassessment. Sub-section (10) lays down that the amount of the voluntary disclosed income shall not be included in the total income of the declarant for any assessment year under any of the Acts mentioned in sub-section (9) if he has credited such amount in the books of account, if any, maintained by him for any sources of income or in any other record. Under sub-section (II), nothing contained in any declaration made is admissible as evidence against the declarant for the purpose of any assessment proceeding or any proceeding relating to imposition of penalty or for the purpose of prosecution under any of the Acts mentioned in sub-section (9) or the Wealth-tax Act. Sub-section (12) makes all particulars contained in any declaration or record of any proceeding confidential and no public servant can disclose any particulars contained in any such declaration on record, except' to an officer employed in execution of any of the Acts mentioned in subsection (9) or the Wealth-tax Act to any officer appointed by the Comptroller and Auditor-General of India or the Board to audit income-tax receipts or refunds. Sub-section (13) deals with rectification of any mistake apparent from the record of any proceeding. Sub-section (14) requires the income-tax under the said section to be deposited to the credit of the Central Government. The Commissioner on an application by the declarant is required under sub-section (15) to grant a certificate to him setting forth the particulars of the voluntary disclosed income and the amount of income-tax paid and the date of payment. Sub-section (16)(b) provides that all other words and expressions used in section 24 but not defined and defined in the 1961 Act shall have the meanings respectively assigned to them in the said Act.
(9) Thus, where any person makes a declaration in respect of the amount representing income chargeable to tax under the 1922 Act for any assessment year commencing on or before April 1, 1964, which has neither been disclosed nor detected earlier, he shall be charged income-tax in accordance with sub-section (3) in respect of the amount so declared- By the help of a legal fiction introduced in sub-section (3) by use of the words: 'as if such amount were the total income of the declarant', the amount so declared is turned into his total income and income-tax, according to that section, is charged on it at the prescribed rates. The declarant is required to give in his declaration, inter alia, details as to whether the amount is represented by cash, bullion, investments, etc. and the name in which it is held and location thereof. It is significant that he is not required to disclose the nature and source of the amount as declared. Income-tax is charged on the amount so declared in accordance with sub-section (3) notwithstanding anything contained in the 1922 Act or the 1961 Act. This result has been achieved by incorporating a non obstinate clause to this effect in sub-section (1). The Income-tax Officer has then to determine the sum payable by the declarant in accordance with sub-section (3) and to serve upon him a notice of demand under the 1961 Act. He is not to enter into any investigation. Finality is sought to be attached to the said declaration and the subsequent proceedings, by sub-sections (9) to (12) according to which any amount of income-tax paid in pursuance of the aforesaid declaration is made non-refundable in any circumstances. The declarant is not entitled to reopen any assessment or reassessment or claim any set off or relief. The amount so declared is treated as a separate block of income of the declarant; and is not to be included in his total (disclosed) income for any year, if he has credit such amount in his .books of account, if any, or in any other record. In short, the amount so declared by the declarant is his total income and income-tax is charged thereon at the prescribed rates, which is not refundable in any circumstances nor can any set off or relief be claimed by him in respect thereof.
(10) Mr. Dhebar contended that under sub-section (1) of section 24, the declaration is required to be made in respect of the amount which represents the income of the declarant. The declaration cannot be made in respect of an amount which is not the income of the declarant. If, thereforee, a person has made a declaration with respect to an amount which is not his income but is the income of somebody else, then, the learned counsel urged, there is nothing to prevent an investigation into the true nature and source of the said amount. This contention is not well forwarded. When a declaration is made under sub-section (1), then notwithstanding anything contained in the 1922 Act or the 1961 Act, income-tax has to be charged thereon in accordance with sub-section (3) as if it were the total income of the declarant himself. Without investigating into the nature and source of the amount, the Income-tax Officer under sub-section (7) is required to determine the sum payable by the declarant in accordance with sub-section (3). By the fiction introduced in sub-section (3) the amount declared becomes the total income of the declarant. The aim of section 24 of the Finance Act, as was explained by the Finance Minister in his speech while introducing the budget for the year 1965-66 was 'to mitigate the evil of the mischief in the economy created by unaccounted income and wealth'. It is for this reason that investigation into the truth of declaration was specifically ruled out. Whatever was declared was to be treated as the total income of the declarant. The object of bringing out on the surface the hidden and unaccounted money was achieved by enabling a declaration to be made with respect to it. It is, thereforee, not possible for the revenue to go into the question of nature and source of the declared amount and to say that it does not represent the income of the declarant.
(11) Mr. Dhebar contended that the benefits under the scheme introduced by section 24 of the Finance Act are available to the declarant alone. There is nothing according to him, to prevent the Income-tax Officer, if he is not statisfied with the Explanationn of the assessed (otherthan the declarant) about the nature and source of the amount found credited in his books, from including the said amount in the total Income of that assessed in spite of it having already been made subject of a declaration by the declarant and then taxed under the scheme. This contention, too, is not well founded. For, if the amount declared is the income of the declarant and has to be taxed in his hands which tax is not refundable under any circumstances, then the same amount cannot be the income of any other person also. The legal fiction created by sub-section (3) of section 24 of the Finance Act by which the amount declared by the declarant has to be charged to income-tax at the prescribed rates, 'as if such amount were the total income of the declarant', can operate only on the assumption that it is not the income of any one else. As was observed by the Supreme Court in Commissioner of Income-tax, Delhi v. Teja Singb : [1959]35ITR408(SC) 'it is a rule of interpretation well settled that in construing the scope of a legal fiction it would be proper and even necessary to assume all those facts on which alone the fiction can operate.' Mr. Dhebar submitted that a legal fiction is adopted in law for a limited purpose. The legal fiction contained in sub-section (3) is limited in its scope, he said, to the purposes of the Finance Act and cannot be invoked when applying the provisions of section 68 of the 1961 Act. But, what is the purpose of the Finance Act? It is to bring to income-tax all such income which has hitherto remained undisclosed, by treating it as the total income of the declarant. If, thereforee, the declared amount becomes under the Finance Act the total income of the declarant for the purpose of charging income-tax on it, it cannot be the income of some one else also for the same purpose of again charging income-tax on it. The legal fiction created by sub-section (3), thereforee, finally imprints on the sum declared the character of 'total income' of the declarant; and the finality is achieved by enacting that the income tax paid as a result of the declaration shall not be refunded in any circumstances. If Mr. Dhebar's contention is accepted, this very amount which has irrevocably become under the Finance Act the income of the declarant will be subjected to income-tax by the Income-tax Officer under section 68 of the 1961 Act as the income also of the assessed in whose bookS it may be found to have been credited. Apart from nullifying the fiction created by sub-section (3) as aforesaid, it would result in double taxation on the same income, and that too not only in one year, but year after year. For, the Income-tax Officer dealing with the declarant would be able to pin him down to his declaration, which is irrevocable and continue to charge income-tax on the income of the amount declared by him under the Finance Act year after year. The Income-tax Officer dealing with the assessed in whose books the said amount stands credited, will by virtue of section 68 of the 1961 Act, be able to charge the same amount to income-tax as his income. This will create an anomalous situation which neither the Finance Act nor the 1922 Act or the 1961 Act contemplates. There was nothing to prevent the legislature from enacting a specific provision for such a double taxation if it really was intended to be charged. In its absence, we are not privileged to read in the enactments concerned something which the legislature in its wisdom has omitted to provide. In Jain Brothers and others v. Union of India and others : [1970]77ITR107(SC) , the Supreme Court on page 112(2) observed: 'It is not disputed that there can be double taxation if the legislature has distinctly enacted it. It is only when there are general words of taxation and they have to be interpreted, they cannot be so interpreted as to tax the subject twice over to the same tax'. In the present case, the legislature has nowhere sanctioned the imposition of double taxation whether by express or by implied words. The Act, under these circumstances, cannot be interpreted so as to tax the subject or the same income twice over.
(12) In Income-tax Officer v. Bachu Lal Kapoor : [1966]60ITR74(SC) the members of a Hindu undivided family were assessed as individuals. Subsequently, the Income-tax Officer issued notice under section 34 of the 1922 Act for assessing the Hindu undivided family in regard to the escaped income of the same assessment year for which the members as individuals had already been taxed. The Supreme Court observed that there was nothing wrong in the Income-tax Officer initiating proceedings against the Hindu undivided family. But, it was held that after the assessment proceedings culminated in the assessment of the Hindu undivided family, appropriate adjustments had to be made by the Income-tax Officer in respect of the tax realised by the revenue on that part of the income, which had been assessed in the hands of the individuals. This direction was given by the Supreme Court on the well known dictum that the charge has to be levied on an income only once. It was observed that the Act does not envisage taxation of the same income twice over 'on one passage of money in the form of one sort of income'. A similar claim for an adjustment, set off, refund or relief cannot be made in the present case by the declarant as sub-section (9) of section 24 of the Finance Act provides a statutory bar against it. The only way to avoid double taxation in this case would, thereforee, be not to tax this amount again in the hands of the assessed in whose books it may be found credited, on the plea that the Explanationn of a mere declaration by the declarant is not sufficient. It has, on the other hand, to be accepted as a satisfactory Explanationn.
(13) Section 24 of the Finance Act is even otherwise an overriding provision and section 68 of the 1961 Act has to yield place to it. Subsection (1) of section 24 of the Finance Act specifically lays down that where any declaration in respect of the amount representing income chargeable to tax is made, the said amount is to be charged to tax in accordance with sub-section (3) 'notwithstanding anything contained in the' 1922 Act or the 1961 Act. The provisions of section 24, by this non obstinate caluse have thus specifically been made to override the provisions of the 1922 Act and the 1961 Act. The amount which becomes the total income of the declarant under the Finance Act cannot, thereforee, be included in the total income of any other assessed by invoking section 68 of the 1961 Act. Section 68 is a part of the general law of income-tax, while section 24 of the Finance Act is a special provision which specifically deals with the undisclosed amount. A special provision according to the settled principles of interpretation has to be given effect to; while the general provision would be applicable to such cases only to which the special provision would not apply. Sub-section (1) read with sub-section (3) of section 24 of the Finance Act, thereforee, enjoys an overriding posi- corporation oversection 68 of the 1961 Act. The Income-tax Officer will not, thereforee, be able to include the declared amount in the total income of the assessed as unexplained credit standing in his books.
(14) Mr. Dhebar then submitted that sub-section (1) read with subsection (3) of section 24 of the Finance Act constituted a separate law of taxtion, which was an independent statute having nothing to do with the 1922 or 1961 Acts. The income-tax charged on income under the 1922 Act or the 1961 Act could not be said to be a second charge when the same income had been charged to income-tax under the Finance Act also. Even the toal income referred to in sub-section (3) of section 24 of the Finance Act, according to the learned counsel, was not the same total income as was referred to in section 2(45) of the 1961 Act. These contentions however, are not correct. Section 4 of the 1961 Act provides that where any Central Act enacts that income-tax shall be charged at any rate, income-tax shall be charged at that rate in respect of the total income of the previous year of every person- Sub-section (3) of section 24 of the Finance Act, which is a Central Act enacts that income-tax shall be charged on the amount of voluntary disclosed income at the specified rates, as if such amount were the total income of the declarant. The amount voluntary disclosed is not charged to income- tax, as such, but is required to be taken as 'the total income' of the declarant for levying income-tax thereon, because income-tax under section 4 of the 1961 Act is charged in respect only of the total income. Sub-section (16)(b) of section 24 of the Finance Act specifically enacts that words and expressions used in the said section but not defined and defined in the 1961 Act have the meanings respectively assigned to them in the said Act. The expression 'total income' in the Finance Act, thereforee, has to be given its meaning as given in section 2(45) of the 1961 Act, according to which it means the total amount of income referred to in section 5 computed in the manner laid down in the Act. So whatever may be the ingredients of the amount declared by the declarant under the Finance Act, it is deemed to be the 'total income' of the declarant, as if it was the income referred to in section 5 computed in the manner laid down in the 1961 Act and has to be charged to income-tax as such. Mr. Dhebar contended that the definition of total income as contained in section 2(45) of the 1961 Act has to be read subject to the opening words in section 2 reading, 'unless the context otherwise requires'. According to him, the context here is different, because under the 1961 Act total income has to be computed in the manner laid down in that Act, whereas under the Finance Act the amount declared has to be taken as the total income without going into the manner in which it has been computed. The contention of Mr. Dhebar is not well founded. The use of the words 'as if it were the total income of the declarant' introduces in sub-section (3) a 'legal fiction' implying that an imaginary state of affairs is to be treated as real. Whatever, thereforee, be the manner of computing the amount declared, it has by the said legal fiction to be treated as the total income as defined in section 2(45). There is nothing else in sub-section (3) or any other provisions in the Finance Act from which it could be said that the expression 'total income' used in that Act is something different from the same expression when defined and used in the 1961 Act. The legislature could well have enacted that income-tax shall be charged under the Finance Act on the amount voluntarily disclosed. But, the said voluntarily disclosed amount under the Finance Act has been first turned into the 'total income' of the declarant because income-tax is charged under the 1961 Act on the 'total income'. The provisions in the Finance Act have, thereforee, been brought in line with and made supplementary to the 1961 Act. The expression 'income-tax' itself; has acquired a connotation well known and understood in law. It implies a tax on income charged under the provisions of the relevant Income-tax Act. There is nothing in the Finance Act to show that the income-tax referred to therein was intended by the legislature to be an income-tax of a kind different from the (me levied under the 1922 or 1961 Acts. The contention of Mr. Dhebar that the income-tax levied under the Finance Act is altogether a different variety of income-tax and, thereforee, its imposition does not involve double taxation of income has no basis.
(15) Mr. Dhebar then relied on a judgment of the Gujarat High Court, in Manilal Gafoorbhai Shah v. Commissioner of Income-tax Gujarat, Ahmedabad, (1973) 2 I t J 283 the learned Judges of that court while examining the scope of section 24, observed that they could not attribute to the legislature an intention to encourage fraud. But, from the budget speech of the Finance Minister, noticed earlier, it was clear that the Government's various measures to unearth unaccounted incomes and wealth had not met the desired success. It was expected under the scheme, as the Finance Minister put it, that 'those who have been misled in the past would find in it a reason enough to return to the path of civic responsibilities. It was not a question of encouraging fraud. It was intended to forgive and forget the by-gones and to give an opportunity to those who had been misled in the past to return to the right path. Persons who had not disclosed their income in the past were, thereforee, not to be questioned. Even if the declarant was a benamidar, his declaration was not to be questioned and the amount declared by him was treated as his total income. This was done in order to bring to the surface the hidden wealth. There was no question of encouraging fraud. It was a measure specifically designed to ignore the misdeeds of the past. Once the hidden amount came out to the surface, the declarant, whoever he may be, was to be treated as its owner and was expected to keep to the right path thereafter. The law, thereforee, specifically created a fiction for the purpose of treating the declared amount to be the income of the declarant. With respect, we must say, that the fiction contained in sub-section (3) and the non obstinate clause in sub-section (1) of section 24 appeared to have escaped the notice of the learned Judges of the Gujarat High Court in thte said case. As was observed in Vestey's (Lord) Executors v. Inland Revenue Commissioners, (1949) I All E.R. 1108 'tax avoidance is an evil, but it would be the beginning of much greater evil if the courts were to overstretch the language of the statute in order to subject to taxation people of whom they disaproved'. The well settled rule of interpretation of fiscal statute is that 'if the person sought to be taxed comes within the letter of the law, he must be taxed, however great the hardship may appear to the judicial mind to be. On the other hand, if the Crown seeking to recover the tax cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of the law the case might otherwise appear to be.' (Partington v. Attorney General, (1969) L. R. 4 H.L. 100.
(16) The facts of the case before the Gujarat High Court were even otherwise different as the amount declared had been detected by the Income-tax Officer prior to the date of declaration. The said judgment, thereforee, cannot be of any use to the revenue in this case. Mr. Dhebar also referred to a judgment of the Allahabad High Court in M/s. Badri Prasad and Sons v. Commissioner of Income-tax, U.P., Kanpur, Itr 40 of 1972 decided on September 12, 1973, (7). The learned Judges in that case upheld the finding of the Tribunal to the effect that the Finance Act 'neither intended nor had the effect of converting the income belonging to the person behind the screen into the income of the declarant.' The learned Judges of the Allahabad High Court, we must say with respect, did not consider the effect of the fiction introduced in sub-section (3) or of the non-obstante clause in sub-section (1) of section 24 of the Finance Act. The said judgment, thereforee, is of little help to the revenue.
(17) Coming to the facts of this case, the Income-tax Officer while scrutinising the books of the assessed, petitioner No. 3, found certain sums credited in favor of three depositors. The Explanationn given was that the said sums had been duly declared voluntarily by the depositors, under section 24 of the Finance Act. There is no reason why this Explanationn be disregarded as being unsatisfactory. Under section 68 of the 1961 Act, the initial onus lies on thhe assessed to offer a satisfactory Explanationn. The Explanationn offered in the present case should have been taken to be satisfactory in view of the statutory provisions discussed above. The onus shifted thereafter on the Income-tax Officer to establish that the sum so credited were the income of the assessed, which has not been discharged. In any case, the provisions of the Finance Act as already noticed, override the provisions of the 1961 Act. The Income-tax Officer had no jurisdiction while dealing with the case of the petitioners to question the declarations made by the depositors under the Finance Act, as a result of which they (the depositors) had already paid tax, which under no circumstances could be refunded or adjusted. The Income-tax Officer could not treat the amounts deposited by the depositors withthe petitioner No. 3 as if they were not their income and to treatthe same as the income of petitioner No. 3. This petition, thereforee, must succeed and a writ of certiorari must issue, quashing the impugned orders in so far as they relate to the addition of Rs. 30,000.00 as the petitioner's income from undisclosed sources. We quash the order dated May 30, 1972 of the Additional Commissioner of Income-tax and dated January 18, 1972 of the Income- tax Officer in so far as they relate to the addition of Rs. 30.000.00 to the income of petitioner No. 3. We accordingly set aside the addition of Rs. 30,000.00 to the total income of the petitioner No. 3 and direct the respondents not to charge any income-tax in respect of the said sum from the petitioners. In the peculiar circumstances of the case, however, we make no order as to costs.