Smt. Monmohini Coomer Vs. Wealth-tax Officer - Court Judgment

Excerpt:
1. all these appeals involve common points. they are disposed of by a common order.2. in these appeals, filed by the assessee, various grounds regarding valuation have been taken. but at the time of hearing the following common additional ground has been raised: for that the return of wealth for the relevant assessment year having filed along with the disclosure after the statutory period provided under the wealth-tax act, the said return is an invalid one and non est in the eye of law and as such the assessment made by the wealth-tax officer on the basis of the said invalid return is illegal and invalid and is also barred by limitation.since the additional ground is pure question of law, the same is admitted. in support of the plea raised in the additional ground dr.pal for the assessee.....

Judgment:
1. All these appeals involve common points. They are disposed of by a common order.

2. In these appeals, filed by the assessee, various grounds regarding valuation have been taken. But at the time of hearing the following common additional ground has been raised: For that the return of wealth for the relevant assessment year having filed along with the disclosure after the statutory period provided under the Wealth-tax Act, the said return is an invalid one and non est in the eye of law and as such the assessment made by the Wealth-tax Officer on the basis of the said invalid return is illegal and invalid and is also barred by limitation.

Since the additional ground is pure question of law, the same is admitted. In support of the plea raised in the additional ground Dr.

Pal for the assessee contended that the assessments made are invalid and illegal inasmuch as the returns on the basis of which proceedings for assessments were taken, are not returns under the Wealth-tax Act, 1957('the Act'). They are merely returns as enclosures to the declarations made under the Voluntary Disclosure of Income and Wealth Act, 1976 ('the 1976 Act'). The question of limitation has also been raised by Dr. Pal. In reply, the learned departmental representative contended that the plea taken by the assessee is not the plea raised in the additional grounds of appeals and, therefore, it should not be entertained. We think the objection is without any substance. The additional ground does raise the legality of the assessments and the question raised by Dr. Pal is purely a question of law and it requires consideration. Mr. Subramanian contended that the assessee having filed the returns along with the declarations, the returns cannot be challenged. In regard to the question of limitation, Mr. Subramanian contended that there is no time limit for making returns and there is no time limit for making the assessments in accordance with law that is applicable for all the assessment years under appeal.

3. At the outset we must analyse the provisions under the 1976 Act before we appreciate the contentions raised by the authorities. The 1976 Act was passed by the Parliament as Act No. 8 of 1976. The 1976 Act replaces the Voluntary Disclosure of Income and Wealth Ordinance, 1975. The 1976 Act deals with voluntary disclosure of income as well as wealth. From Section 3 of the 1976 Act onwards, provisions are made for voluntary disclosure of income and certain immunities to the persons making the declaration. In respect of income voluntarily disclosed, there is no assessment or reassessment to be made under the Income-tax Act, 1961 ('the 1961 Act') but a schedule of rates has been fixed in relation to the income voluntarily disclosed [see Section 3(1)].

Section 14 of the 1976 Act deals with disclosure of income in cases of search and seizure. In respect of disclosures made under Section 14, a provision is made for making an assessment or reassessment. The scheme is that a declaration can be made under Section 14 and the same shall be made to the Commissioner in such form and shall be verified in such manner as has been prescribed by the rules made by the CBDT (Board). A copy of this declaration would then be forwarded to the ITO by the Commissioner and "the information contained therein may be taken into account for the purposes of the proceedings relating to assessment or reassessment of the income of the declarant under the provisions of any of the Acts mentioned in Sub-section (1) of Section 8 or the Wealth-tax Act".

Then come the provisions relating to the voluntary disclosure of wealth. It may be very useful if we reproduce the relevant provisions of Section 15 of the 1976 Act as the whole argument turns upon the construction of Section 15 and the rules made thereunder: 15. (1) Subject to the provisions of this section, where any person makes, on or after the date of commencement of this Act but before the 1st day of January, 1976, a declaration in respect of-- (a) the net wealth chargeable to wealth-tax for any assessment year for which he has failed to furnish a return under Section 14 of the Wealth-tax Act; or (b) the value of the assets which has not been disclosed, or the value of the assets which has been understated, in any return of net wealth for any assessment year, then, notwithstanding anything contained in that Act, the net wealth, or as the case may be, the value so declared shall not be taken into account for the purposes of any proceedings relating to imposition of penalty on the person making the declaration under this Sub-section (hereafter in this section referred to as the declarant) or for the purposes of the prosecution of the declarant under that Act: (i) nothing contained in Clause (a) shall apply in relation to the net wealth assessable for any assessment year for which a notice under Section 14 or Section 17 of that Act has been served upon the declarant before the commencement of this Act; (ii) nothing contained in Clause (b) shall apply in relation to so much of the value of such assets as has been assessed in any assessment for the relevant assessment year made by the Wealth-tax Officer before the date on which the declaration under this sub-section is made.

(2) The declaration under Sub-section (1) shall be made to the Commissioner and shall be in such form and shall be verified in such manner as may be prescribed by rules made by the Board.

(3) A declaration under Sub-section (1) shall be signed by the person specified in Sub-section (2) of Section 4 as if the declaration had been made under that section.

(4) A copy of the declaration made by the declarant under Sub-section (1) shall be forwarded by the Commissioner to the Wealth-tax Officer and the information contained therein may be taken into account for the purposes of the proceedings relating to assessment or reassessment of the net wealth of the declarant under the provisions of the Wealth-tax Act.

The rest of the sub-Sections are not very relevant for our purposes.

Section 20 of the 1976 Act empowers the Board to make rules and prescribe forms in respect of declarations to be made under the 1976 Act. Rule 5 of the Voluntary Disclosure of Income and Wealth Rules, 1975 ('the 1975 rules') reads as follows: 5. Form of declaration under Section 15 in respect of net wealth or value of assets not disclosed or understated--(1) The declaration under subsection (1) of Section 15 of the Ordinance in respect of net wealth or value of assets not disclosed or understated shall be made in duplicate in Form C and shall be verified in the manner indicated therein.

(2) Where a declaration under Sub-rule (1) is made in respect of net wealth or includes any declaration in respect of net wealth, for any assessment year or years, the declaration shall be accompanied by a return of net wealth for such year or years in the form prescribed under Section 14 of the Wealth-tax Act, 1957(27 of 1957).

Form C is the form under which disclosure under Section 15 will have to be made. Item No. 5 of the form requires the declarant to furnish statement of net wealth declared. It is further enjoined on the declarant to attach a return of net wealth for each assessment year.

4. The assessee filed declarations under Section 15(1) of the 1976 Act in respect of her wealth. Admittedly, she was not assessed to wealth-tax for any assessment year for which she filed the declarations nor she filed a return under Section 14 of the Act in relation to those years. The declarations filed by the assessee are in respect of the assessment years 1958-59 to 1967-1968. As required under Section 15 of the 1976 Act, read with Rule 5 of the 1975 Rules, she had filed declarations in Form C enclosing therein the returns of net wealth for each assessment year. In accordance with the provisions of Sub-section (4) of Section 15, a copy of the declaration was forwarded by the Commissioner to the WTO. Obviously the returns filed in accorda nee with Rule 5, read with Form C, which were attached to the declarations, were also sent as a part of the declaration to the WTO. Thereafter, the WTO proceeded to make the assessments for all the years under appeal on the basis of the returns filed by the assessee. While assessing the assessee under the Act, the WTO valued some of the properties of the assessee more than what the assessee disclosed in the returns. That is how the assessee felt aggrieved. The appeals filed by her having failed, the present appeals are filed and, as already stated, among other grounds, the additional ground has been taken.

5. Adverting to the additional ground, we find that Section 15(4) of the 1976 Act contemplates that the information contained in the declaration may be taken into account by the WTO for the purpose of making an assessment or reassessment of the net wealth. The purpose of the declaration, which has to be forwarded by the Commissioner to the WTO, is only for utilising the information contained in the declaration to make an assessment or reassessment, as the case may be. Sub-section (4) itself does not contemplate filing of a return along with the declaration. It is only Rule 5 that contemplates filing of returns of net wealth along with the declaration. The language shows that the declaration shall be accompanied by a return of net wealth. In other words, the return of net wealth would be an enclosure to the declaration. Form C is obviously in consonance with Sub-rule (2) of Rule 5. Now the whole controversy is whether the returns filed by the assessee accompanying the declarations are returns filed under the Act on which the WTO could take action. In our opinion, the returns filed by the assessee as enclosures to the declarations cannot be treated as returns filed by the assessee under the provisions of the Act in order that the WTO can take recourse to the proceedings for assessment under the Act. We set out the reasons hereinbelow.

6. Sub-section (4) of Section 15 of the 1976 Act nowhere indicates that a return of net wealth under the Act will have to be filed. All that it requires is that a declaration should be filed before the Commissioner in the prescribed form and in the prescribed manner. No doubt the rules prescribed do enjoin the declarant to enclose the returns to be filed along with the declarations. If we closely analyse Sub-rule (2) of Rule 5, it merely contemplates filing of return of net wealth in the form prescribed under Section 14 of the Act. To our mind, the Board merely wanted the declarant to use the form prescribed under the Act in order to give full particulars of net wealth. Enclosing a return of net wealth in the form prescribed under Section 14 of the Act does not amount to filing of a wealth-tax return under the said Act. A return under the Act can be filed either under Section 14(1) or 14(2) or in response to notice under Section 17 of the Act. The other provision on the basis of which return can be filed is Section 15 of the Act. A return accompanying the declaration in accordance with Sub-rule (2) of Rule 5 referred to above is not something as filing of a return by an assessee either under Section 14, Section 15 or Section 17. Further, Sub-rule (2) of Rule 5 requires the filing of a return of net wealth in form prescribed under the Act. It does not say that a return under the Act should be filed. Obviously the Board could not have said so inasmuch as a return of net wealth in order to be a valid one must be filed in accordance with the Act and not under the said rule. Besides, Section 15 of the 1976 Act itself does not contemplate filing of a return. The section could have provided that a return should be filed under the Act along with the declaration and that return could have been treated as a return filed under the Act for the purpose of making an assessment. Even Sub-rule (2) of Rule 5 does not say so. Dr. Pal is right in contending that the filing of a return of wealth in the form prescribed under the Act is only a mode of furnishing details of net wealth and not that a return under the Act is filed. If Sub-rule (2) really contemplated filing of a return under the Act, the language would have been slightly different. It would have been enough if the wording would have been 'be accompanied by a return of net wealth...

under the Wealth-tax Act.' As already stated, it should have also been provided that a return so filed shall be treated as a return under the Act in order to clothe the WTO with the jurisdiction to make an assessment: 1. Section 15 only contemplates use of the information contained in the declaration by the WTO. The Legislature is quite aware that in order to make an assessment in a case where no assessment is made or to make a reassessment in a case where there is an under-assessment, the WTO can proceed on the information in his possession. This is the language used in Section 17 of the Act corresponding to Section 147 of the 1961 Act. Being aware of such a position, the Parliament obviously used the expression 'information' which may be taken into account for the purpose of a proceeding relating to assessment or reassessment of net wealth. Section 15 of the 1976 Act does not contemplate at all making of an assessment. It refers to an assessment or a reassessment to be made under the provisions of the Act. This is definitely different from the scheme in relation to levy of tax under the Act relating to voluntary disclosure of income as already mentioned. It is more akin to Section 14 of the 1976 Act.

2. We can also look into the matter from a different angle.

Sub-section (4) of Section 15 postulates use of information in the declaration for the purpose of either assessment or reassessment. In a case where there is no assessment already made and if the assessment is pending, the WTO can make the assessment by using the information in the declaration. Similarly, in a case where an assessment has already been made the WTO can reopen the assessment under the provisions of Section 17 of the Act on the basis of information contained in the declaration forwarded to him. Unlike the provisions of Section 3 of the 1976 Act, Section 15 of the 1976 Act contemplates making of an assessment or a reassessment under the provisions of the Act. Similar is the provision in relation to the disclosure made under Section 14. Section 15 nowhere authorises making of an assessment. Resort to the provisions of the Act has to be taken before an assessment or a reassessment can be made. When the Legislature used 'assessment or reassessment', it definitely contemplated the two situations as mentioned by us. They are--(a) if an assessment has not been made and is pending, the WTO can complete the assessment by the use of the information in the declaration; (b) if an assessment has already been made, reassessment will have to be made by resorting to the provisions of Section 17. He cannot make an assessment if an assessment has already been made. He cannot also treat the return accompanying the declaration as a return under the Act. The reason is obvious as can be seen from the following example. Suppose an assessee filed a return for any year for which declaration is made and no assessment is made on the basis of such return. If really Section 15(4), read with Rule 5(2), is to be understood in the manner the revenue suggests, then the WTO will have to proceed on the basis of the return accompanying the declaration which he cannot obviously do because a return was already filed. Mr. Subramanian, however, contended that a return accompanying the declaration should be treated as a revised return on the basis of which the assessment could be made. We cannot accept this argument inasmuch as there is no express provision nor can it be implied that a return accompanying the declaration in accordance with Sub-rule (2) of Rule 5 is to be treated as a revised return. On the other hand, Section 15(4) if understood in the manner we have indicated, the situation which may arise is easily avoided and there will be no difficulty in reconciling the provisions of the 1976 Act and the 1957 Act. To emphasise the above aspect, we may take another illustration. Suppose an assessment is already made in respect of any year for which declaration is made, the only course open to the WTO is to utilise the declaration as information and reopen the assessment. In such a case there will be reassessment. An assessment is never contemplated in a case where there is already an assessment made. It is trite learning to say that once an assessment is made, it can be altered only by resorting to the specified provisions under the Act, i.e., either by reopening or by rectifying.

Therefore, Section 15 of the 1976 Act should be understood in such a manner that the words used therein are given proper and reasonable meaning.

7. We may also in this connection look to the immunity provided under Section 15(1). The only immunity provided is in respect of penalty and prosecution. The non-obstante clause in Section 15(1) abrogates the provisions of the Act in relation to penalties and prosecutions. In other words, to the extent of penalties and prosecutions only the Act does not apply. But insofar as all other matters are concerned the Act does apply.

8. Mr. Subramanian for the revenue very strenuously contended that the return accompanying the declaration must be treated as return under the 1957 Act on the ground that the 1976 Act is a part of the 1961 Act and the 1957 Act and all the enactments should be read in conjunction with each other. He particularly emphasized the language used in Rule 5(2).

According to him, when the words 'return of net wealth' are used, it is to be treated that a return under the Act is contemplated to be filed.

In our opinion, this argument overlooks the main provisions under Section 15 of the 1976 Act. First of all, when the main provisions themselves do not contemplate filing of a return under the Act, the rule making authority could not make a rule enjoining upon the declarant to file a return under the Act. Obviously the rule must be understood in order to make it workable and valid and if that is kept in mind, the rule should be construed so as to hold that what the rule making authority wants is the particulars of net wealth in the form prescribed under the Act. There is already a form for giving the details of net wealth. The rule making authority thought that such a form may be used. It could never have contemplated that a return under the Act should be filed and that return could be treated as a return for the purpose of making an assessment under the Act. Mr. Subramanian stated that when Form 'C postulates giving of details of net wealth, filing of a return of net wealth along with the declaration will be meaningless unless it is really meant for making an assessment on that return. Here again, we cannot agree with Mr. Subramanian. The statement contemplated under item 5 may not give full details which are required to be furnished. In order to get all the details and to pin down the declarant, the rule making authority wanted that the declarant should file the details, viz., assets and liabilities which are necessary to be filed in a return of net wealth. By no stretch of imagination, a return accompanying the declaration can be treated as a return under either the provisions of Sections 14, 15 or Section 17.

9. Mr. Subramanian also contended that there is a distinction between Section 14 and Section 15 of the 1976 Act in that the declaration under Section 14 need not be accompanied by a return of income as can be seen from rule 4 of the 1975 rules. From this he contends that when a return is necessary to be filed in relation to a voluntary disclosure of net wealth, this is not a mere empty formality but is a provision to enable the WTO to process such a return and make an assessment. On the face of it, the argument is attractive but on a closer examination, we find that it has no substance. The statement of income in item 6 of Form B is a complete statement of all details required relating to income declared under Section 14. There is no necessity for enclosing a return of income when all the details are made available. Mr. Subramanian's point was that there is a difference between Section 14 and Section 15 because under the 1961 Act, the assessment or reassessment is circumscribed by the periods fixed under the said Act whereas there is no time limit for filing a return under the 1957 Act nor is there any time limit for completing the assessment as the law that is applicable for these . assessment years under appeal. He invited our attention to Section 15 of the Act. He, therefore, contended that the rule making authority deliberately made a distinction between voluntary disclosure under Section 14 and voluntary disclosure under Section 15 which applies to the Act. We do not think that the rule making authority made a distinction on account of the reason which Mr. Subramanian wants to advance. In our opinion, the rule making authority wanted a return of net wealth to be filed for the purpose of obtaining details regarding the net wealth and not for the purpose of enabling the WTO to treat that return as a return filed under the Act so that assessment could be made. As is the case of declarations made under Section 14 so is the case in regard to the declaration filed under Section 15. In relation to declaration under Section 15, proceedings will have to be taken under the 1961 Act for the purpose of making an assessment or reassessment, as the case may be, and the information in the declaration will be used as information for that purpose. Similarly, in relation to the declaration under Section 15 an assessment or a reassessment will have to be made in accordance with the provisions of the Act. Without resorting to the provisions of the Act the WTO cannot proceed to make an assessment on the strength of the declaration accompanied by the return. It is only the declaration and the declaration alone that constitutes information under Section 15(4) and the return filed accompanying the declaration has no validity except as an enclosure to the declaration which gives details of net wealth.

10. Merely because there is no time limit for filing a return and for making an assessment (assuming it to be so), there cannot be an assessment unless a return is filed under the provisions of the Act.

That a return is necessary to be filed either under Section 14 or Section 15 or Section 17 of the Act for the purpose of enabling the WTO to make an assessment is obvious. In view of our discussion, since no such returns have been filed by the assessee in all these years and the assessments proceeded only on the basis of returns accompanying the declarations, the assessments so made are invalid, illegal and without jurisdiction. In view of the above, no other contention is necessary to be decided.

11. In the result, all the assessments are quashed. The appeals are allowed.

1. I have gone through the order of my learned brother, the Judicial Member. As I have not been able to reach the same conclusion as he, I write a separate order as follows: 2. The facts giving rise to the controversy are required to be recapitulated before the rival contentions are examined. The assessee is an individual. She filed declaration of her net wealth in terms of Section 15 of the Voluntary Disclosure of Income and Wealth Ordinance, 1975 (later substituted by Voluntary Disclosure of Income and Wealth Act, 1976), declaring voluntarily certain wealth owned by her on the various valuation dates relevant for the assessment years 1958-59 to 1974-75. The declaration was made in Form C. Along with it the assessee filed returns of net wealth for the aforesaid assessment years. The said declaration and the accompanying returns of net wealth were filed by the assessee before the Commissioner in accordance with the provisions of Section 15. The said Commissioner forwarded the said declaration and the returns to the WTO for necessary action. The latter, on receipt of the said declaration and the returns, completed the assessments on the assessee on the basis of the said returns. The wealth declared by the assessee consisted, inter alia, of the following capital of the assessee B. Kumar & Co., bank deposits, jewellery, immovable properties situated at 4, Rawdon Street, Calcutta-17, and of land and building situated at Dehri-on-Sone and agricultural land situated at Dehri-on-Sone, Chanditala. The valuation of the immovable properties situated at 4, Rawdon Street, Calcutta and at Dehri-on-Sone were declared by the assessee on the basis of valuer's report dated 10-12-1975 and 19-12-1975, respectively.

3. While completing assessments on the basis of the aforesaid returns, the WTO did not accept the assessee's valuation of the aforesaid immovable properties. For the detailed reasons given by the WTO in his order for the assessment year 1958-59, he adopted the value of Calcutta property at Rs. 4,99,700 as against the declared figures by the assessee at Rs. 1,47,600. The value of the property situated at Dehri-on-Sone was taken by the WTO at Rs. 70,000 as against the declared figures of Rs. 50,300 by the assessee. The valuations for other years were also adopted by the WTO on the basis of the aforesaid valuation for the assessment year 1958-59.

4. The assessee appealed against the aforesaid assessment orders to the AAC and contested the correctness of the valuations as adopted by the WTO. No question with regard either to the validity of the returns or of the assessments were raised by the assessee before the AAC. The AAC vide his consolidated order for the assessment years 1958-59 to 1967-68 allowed partial relief to the assessee with regard to the valuations of the said properties. The appeals for the assessment years 1968-69 to 1974-75 have not yet been decided by him.

5. As the assessee was not satisfied with the aforesaid decision of the AAC and felt that the original valuation declared by him should have been accepted by him, the assessee filed appeals to the Tribunal against the aforesaid consolidated order of the AAC. In the original memorandum of appeal the assessee's grievances were against the valuation of the aforesaid properties as sustained by the AAC. He also objected to the setting aside the issue of agricultural land and valuation thereof to the WTO.6. When the aforesaid appeals came up for hearing before the Tribunal, the assessee moved on 1-7-1981 for the permission to raise an additional ground which is common in respect of all the years and reads as follows: For that the return of wealth for the relevant assessment year having filed along with the disclosure after the statutory period provided under the Wealth-tax Act, the said return is an invalid one and non est in the eye of law and as such the assessment made by the Wealth-tax Officer on the basis of the said invalid return is illegal and invalid and is also barred by limitation.

7. The aforesaid additional ground of appeal was admitted by the Tribunal and in support of it, it was urged by the learned counsel for the assessee that the statutory period for filing the return of wealth was eight years from the end of the assessment year concerned as laid down in Section 17 of the Act and that, even under Section 15 of the Act no return of wealth could be filed beyond the said period of eight years and, even if filed, the return would not be valid and no assessment on its basis could be made. The learned counsel relied, for the above proposition, on the following decisions--CIT v. S. Raman Chettiar [1965] 55 ITR 630 (SC), Smt. Parbati Devi v. C/J [1970] 75 ITR 625 (All.) and CIT v. Smt. Minabati Agarwalla [1971] 79 ITR 278 (Cal.).

8. As the returns for the assessment years 1958-59 to 1967-68 were, according to the assessee, filed beyond the above referred statutory period of eight years, they were, according to the learned counsel, invalid returns and as such no valid assessments on their basis could be made. The argument that the assessments were time barred was corollary to the above proposition. As the returns were time barred, the assessments were time barred.

9. The above reasoning was countered by the learned departmental representative by pointing out that the returns filed by the assessee were not in response to notices under Section 17, that, therefore, the statutory period stipulated in Section 17 did not apply to them, that the returns were filed under Section 15, that under that section the returns could be filed 'at any time before the assessment is made', that, admittedly, no assessments had been made in respect of the assessment years 1958-59 to 1967-68 and that, therefore, the returns filed under Section 15 were within time and that there was no time limit up to 31-12-1975 under the Act for completing the assessments, that, therefore, the assessments for the assessment years 1958-59 to 1967-68 could be completed at any time, that the case law relied upon by the assessee had no relevance to the law as contained in the Act where there was no provision for a time limit to complete an assessment under Section 16 of the Act and that, therefore, there was no question of either the returns being invalid or the assessments being time barred.

10. In rejoinder, the learned counsel for the assessee submitted that even Section 15 should be read in conjunction and in harmony with Section 17 otherwise discriminatory results were bound to ensue putting an honest and straightforward assessee, who filed returns voluntarily, in a disadvantageous position compared to a recalcitrant and non-co-operative assessee, who did not file his returns at all. In the latter case, the WTO had no option but to take recourse to Section 17 and that did not permit him to go beyond a period of eight years from the end of the assessment year concerned and in such a case no assessment for an assessment year beyond the above statutory period could be made. The Act, according to him, should not be interpreted in such a manner as will give rise to such anomalous and discriminatory situations.

11. The above line of reasoning of the learned counsel does not appear to be in accordance with the plain language of the law. Section 15 is clear and unambiguous and does not admit of any doubt as to its meaning. The relevant provisions of the said section read as follows: "If any person has not furnished a return within the time allowed under Section 14, ... he may furnish a return ... at any time before the assessment is made." It is common ground that up to 31-12-1975 there was no provision in the 1957 Act, analogous to Section 153 of the 1961 Act, stipulating time limits for the completion of the assessments. An assessment for 1957-58, for example, could, therefore, be completed under Section 16 as on 31-12-1975; and, if this be so, a return could always be filed by an assessee under Section 15 before the completion of the assessment, provided he had an obligation to file return under Section 14 of the said Act. Section 14 cast an obligation on every individual and HUF, whose net wealth was above the minimum exempt from wealth-tax, to file his return before June 30 of the assessment year concerned. Therefore, if an assessee, who should have filed his return under Section 14, did not do so within the above period, he could still file his return under Section 15 at any time before his assessment for that year was completed. In the present case, assessments for 1958-59 to 1967-68 had not been completed before the assessee filed returns of net wealth under consideration. Those returns could, therefore, be filed under Section 15 on the dates on which they were (sic). It would be wrong to say that such returns were beyond the statutory period of eight years, for no such period was prescribed under the said section. To read the time limit of Section 17 into Section 15 would be against the specific language of Section 3 5 and, as such, such an argument cannot be countenanced. In fact, Section 17A(1)(a) of the Act, which came into effect from 1-1-1976, authorises assessments of assessment years within four years commencing on and from 1-4-1975 (i.e., up to 31-3-1979), or 'one year from the date of filing a return ... under Section 15'. Thus, theoretically it is possible under the Act that a person may file his return under Section 15 for the assessment year 1957-58 to take an extreme case, as on 31-3-1979; in such a case, the assessment on the basis of the said returns can be made up to 30-3-1980, i.e., within one year from 31-3-1979. When the law itself provides for such a contingency, it is futile to go into the argument of discrimination and the alleged violation of article 14 of the Constitution of India as canvassed by the learned counsel for the assessee, as it is trite law that the Tribunal, which is child of the 1961 Act and the 1957 Act, cannot go into the vires of the said Acts or any provision thereof. The question of adopting interpreta-tional aids would arise only when the language of the statute is ambiguous. But when the language is explicit and admits of no doubt, effect should be given to it, for the prime rule of interpretation of the statutes is that the intention of the Legislature should be inferred from the language used by it in drafting a statute. Such intention, as we have noted above, is clear and according to it, an assessee could file his returns of wealth under Section 15 at any time before the assessments for those years were completed. As the returns of net wealth under consideration were filed before the completion of the assessments in question, the returns in question were valid returns and as such valid assessments on their basis could be made at any time before 31-3-1979 and as the same have, admittedly, been completed before that date, the assessments are valid and it would not be correct to say that they are time barred. The averment of the assessee that the returns in question are invalid and non est in law is also not acceptable to us for the reasons given above. The additional ground taken by the assessee in the circumstances appears to me without substance and is, accordingly, rejected.

12. The learned counsel for the assessee also advanced the proposition that the returns for the assessment years 1958-59 to 1967-68 were not filed under the Act but were filed under the 1976 Act and that no valid assessment could be made under the Act on the basis of such returns.

The learned departmental representative objected to the urging of the above argument by the learned counsel for the assessee as, according to him, it was not the ground of appeal set forth by the assessee as additional ground; it in fact ran counter to the said ground of appeal.

The learned counsel for the assessee countered the objection of the departmental representative by saying that the argument urged by him was in support of the additional ground which is, in his opinion, wide enough to admit the above line of reasoning also and as such he could urge the above argument.

13. To appreciate the rival contentions, let me put the additional ground in juxtaposition to the above argument of the assessee as follows: Additional Ground Argument urged by the assessee allegedly in support of the said groundFor that the return of wealth for That the assessments made arethe relevant assessment year having invalid and illegal inasmuch as thebeen filed, along with the disclo- returns on the basis of which pro-sure, after the statutory period pro- ceedings for assessments werevided under the Wealth-tax Act, the taken, are not returns under thesaid return is an invalid one and Wealth-tax Act. They are merelynon est in the eye of law and as returns as enclosure to the declara-such the assessment made by the tions made under the VoluntaryWealth-tax Officer on the basis of Disclosure of Income and Wealththe said invalid return is illegal Act, 1976.

On the face of it, it appears to me that the basic proposition formulated in the ground of appeal is altogether different from that propounded by the assessee's learned counsel in his above argument. The ground of appeal says that the return of wealth is invalid and non est in law because it has been filed after the statutory period provided under the Act and as such the assessment made is invalid. The argument, on the other hand, does not say that the return is invalid or non est in law. The validity of the return is not at all challenged, yet the validity of the assessment is challenged, not because the return is filed after the statutory period but because that return is filed under the 1976 Act and not under the Act. The argument is, thus, altogether on a plane different from what the ground of appeal is; it is not even a different aspect of the same question. It could have been possible to say so if the ground of appeal was wide enough and had merely stated 'that the assessment is invalid in law*. Then, it could be said that both the arguments were aspects of the same question and could, therefore, be urged in support of the ground of appeal. But, when the ground of appeal is specific, it would not be possible to say that a proposition based on an altogether different premise is only another aspect of the same question. I am, therefore, inclined to uphold the objection of the learned departmental representative on this point, viz., that the arguments urged by the assessee are not in support of the additional ground.

14. Nevertheless, it would not be correct to shut out the assessee on that preliminary ground alone. The argument does go to the root of the matter and does question the validity of the assessments. Both the sides have had full opportunity to make their submissions on this point. The contention raised by the assessee, therefore, deserves to be examined in detail. Leave was, accordingly, granted to the assessee under Rule 11 of the Income-tax (Appellate Tribunal) Rules, 1963 to raise it.

15. The kernel of the controversy raised before us by the learned counsel for the assessee, as noted by my learned brother, also is whether the returns of net wealth, filed by the assessee along with the declaration made under Section 15(1) of the 1976 Act in compliance to Sub-section (2) thereof, read with Sub-rule (2) of Rule 5 of the 1975 Rules can be treated as returns under the Act and whether valid assessments on the basis of the said returns, if permissible under the Act, can be made on the assessee.

16. The stand of the assessee is that they cannot be treated as returns under the Act, that they are mere accompaniments, or annexures to the declaration made, that they are de hors the Act, that they are filed merely to give information of the assessee's wealth to the Commissioner, that the Commissioner passes on the information contained therein to the WTO, that the WTO may (if law permits) make use of such information for the purpose of assessment or reassessment proceedings under the Act, that the WTO has to initiate proceedings under the Act, if necessary, to make use of the information contained in the returns, that such proceedings can be initiated only by issuing notices under Section 14(2) or Section 17, as the case may be, that the returns filed by the assessee in response to the above notices only will be the returns under the Act and that valid assessments can be made on the assessee only on the basis of such returns. As in the present case, no proceedings under the Act were initiated against the assessee (in fact, except for the assessment year 1967-68, no such proceedings could have been initiated under the Act), there were no assessment or reassessment proceedings pending before the WTO in the course of which he might have made use of the information contained in the declaration filed under Section 15(1) of the 1976 Act, valid assessments on the assessee could not be made simply on the basis of the returns of wealth filed vide Sub-rule (2) of rule 5. Assessments made by the WTO were as such invalid and deserved to be quashed.

17. The stand of the department, on the other hand, is that the requirement regarding filing of the wealth-tax returns by Sub-rule (2) of Rule 5 is not an idle formality, they are wealth-tax returns for all the purposes of the 1957 Act, though they are filed under Section 15 of the 1976 Act, that the two Acts are complementary to each other and have to be read together to have a total picture of the scheme devised by the Legislature to bring out the black money and to tax it, that the words and expressions which have not been defined under the 1976 Act have to be understood in the same sense in which they are defined under the Act, that the requirement of filing the returns is only with regard to declarations, pertaining to the assessee's wealth declared under Section 15 of the 1976 Act read with Rule 5(2) thereunder, that there is no such requirement under rule 4 of the 1975 Rules whereby the assessee filed declarations in Form B of his income in cases where search and seizure has taken place, that this distinction has been deliberately kept because, whereas under the 1961 Act there is time limit for filing the returns and finalising the assessments, there were no such time limit under the Act at the relevant time, that, therefore, the provision was made to file the returns under Rule 5(2) but not under rule 4, that such returns could be treated as valid returns under Section 15 of the Act and valid assessments on their basis could be made under the Act, if the provisions of the Act permitted it. As in the present case, such assessments on the basis of wealth-tax returns filed by the assessee under Rule 5(2) were possible, the assessments made were legal and valid and it would not be correct to say that the assessee should be required to undergo the motions of preparing and filing similar returns once again by issue of appropriate notices under Sections 14 and 17 of the Act and that this is precisely what has been done in the assessee's case in respect of the assessment years 1968-69 to 1975-76 and the assessee has no grievance against it.

18. The point raised above is, indeed, interesting, though difficult and without precedent. The matter has, therefore, to be decided on first principles.

19. It is not in dispute that every individual, who has taxable wealth, is subject to the levy of wealth-tax for every assessment year (section 3 of the Act) and that his liability to pay wealth-tax accrues and arises on the corresponding valuation date irrespective of whether he has filed wealth-tax return or not. Despite the above clear-cut legal position and the obligation of an individual thereunder, many individuals who had wealth (and income), which was liable to tax, did not disclose the same to the authorities under the respective Acts and, thus, sizeable portions of wealth and income remained outside the taxation net and the legal system of the country. Not to file returns and pay legally due taxes was in contravention of law and certain penal consequences followed under the respective statutes against the defaulters. Many of the defaulters, who even though wanted to make due compliance of law, felt deterred due to the severe penal and prosecution provisions contained in the 1961 and 1957 Acts, etc., simultaneously the country's open economy was getting severely distorted due to the steadily growing drag exercised by the undeclared income and wealth (popularly known as black money). To get over this undersirable situation and to give a chance to the fugitives of law, so to say, to come into the open, the Government devised the scheme of voluntary disclosure through an Ordinance known as Voluntary Disclosure of Income and Wealth Ordinance, 1975, which was later replaced by the Voluntary Disclosure of Income and Wealth Act, 1976. Its preamble clearly spelled out the above purpose of the said Act and stated, inter alia, that the said Act was meant 'to provide for voluntary disclosure of income and wealth'.

20. The scheme of this Act may briefly be noted. Section 2(b) of the 1976 Act clarifies that all words and expressions used in this Act, but not denned and defined in the 1961 Act shall have the meanings respectively assigned to them in that Act. Section 13(3) of the 1976 Act similarly provided that 'All words and expressions used in this section and in Section 15 but not defined and defined in the Wealth-tax Act shall have the meanings respectively assigned to them in that Act'.

21. The 1976 Act is broadly divisible into two parts; one, dealing with the disclosure of income and another with the disclosure of wealth. The disclosure of income can be either under Section 3 or under Section 14.

The income disclosed under Section 3 is termed as 'voluntarily disclosed income'; it is not included in the total income as per provisions of Section 8 and forms altogether separate block and is subjected to tax at special rates given in the Schedule to the 1976 Act, not in respect of the income of each assessment year, but on the totality of it. The declaration disclosing the income has to be in Form A and has to be made to the Commissioner. Tax is ordinarily required to be paid in terms of Sub-section (1) of Section 5 of the 1976 Act 'before making the declaration' and the proof of such payment is to be attached to the declaration. In certain circumstances, the Commissioner may grant time for making the payment as per provisions of Sub-sections (2) and (3) of Section 5. Apart from paying tax as above, the declarant has also to invest in prescribed securities 5 per cent of the voluntarily disclosed income. This investment has to be made within 30 days of making the declaration. If tax is not paid within the extended time, it may be recovered in the manner prescribed under Section 7 of the 1976 Act. The declaration may be for any assessment year to which the provisions of the Indian Income-tax Act, 1922 ('the 1922 Act') and of the 1961 Act applied. Thus, theoretically a declaration may cover a period as far back as covered by the assessment year 1922-23. The declaration made is a confidential document and no Court may call for it; it cannot be used against the declarant in any penalty or prosecution proceedings under the 1961 Act or the 1957 Act, etc. The.

1976 Act, thus, provides an altogether separate procedure of assessment, payment of tax and collection of tax with regard to the voluntarily disclosed income and no provision of the 1961 Act applies to such income.

22. The same is, however, not the position with regard to the income disclosed under Section 14 of the 1976 Act. Section 14 applies to those cases 'where any books of account, other documents, money, bullion, jewellery or other valuable articles or things belonging to a person have been seized as a result of a search under Section 132 of the 1961 Act or under Section 37A of the 1957 Act'. Such person may make a declaration in respect of any income relating to the previous year in which the search was made or any earlier previous year: (a) for which he has failed to furnish a return under Section 139 of the Income-tax Act, or (b) which he has failed to disclose in a return of income furnished by him under the Income-tax Act before the commencement of this Act, or (c) which has escaped assessment by reason of the omission or failure on the part of such person to make a return under the Indian Income-tax Act, 1922 ... or the Income-tax Act, or to disclose fully and truly all material facts necessary for his assessment or otherwise, Such declaration has to be in Form B, as prescribed under rule 4 of the 1975 Rules, read with Sub-section (2) of Section 14; it has to be made in duplicate to the Commissioner within the period 8-12-1975 to 31-12-1975 and has to be verified in the prescribed manner. The declarant has further to pay tax chargeable in respect of the income of the previous year or years for which the declaration has been made in accordance with the provisions of Section 5 of the 1976 Act. On fulfilment of the above conditions, immunity is granted to the declarant from the various penal and prosecution proceedings under the 1961 Act, the 1957 Act and other Acts mentioned in Section 8 of the 1976 Act.

23. The Commissioner has no role to play with regard to the above declaration except receiving it and then forwarding it to the ITO who is to act upon it in terms of Sub-section (4) of Section 14 by taking into account the information contained in the declaration 'for the purposes of the proceedings relating to assessment or reassessment of the income of the declarant under the provisions of any of the Acts mentioned in Sub-section (1) of Section 8 or the Wealth-tax Act'. The income disclosed under Section 14 was, thus, not to form a separate block, as under Section 3, nor was it subject to special rates. It was to be part of the total income and was to be assessed in accordance with the procedures of the 1961 Act and subjected to tax at the rates prescribed in the respective Finance Acts. As the declaration merely provided information to the ITO and did not suo moto bring into existence an assessment or reassessment proceeding, the only course open to the ITO to take into account the information contained in the declaration for the purposes of proceedings of assessment or reassessment was, if no such proceedings were pending before him, to take recourse to the relevant provisions of the law to bring into existence such proceedings. If such proceedings were already pending, the use of the information could straightaway be made. If they were not pending then, as noted above, such proceedings had to be brought into existence before use of such information could be made for assessment or reassessment. The Acts mentioned in Section 8(1) of the 1976 Act for the purposes of which the information could be used were: A reference to the above Acts makes it clear that the disclosed income could be for any of the years, which would be relevant for the above Acts and could, for example, be for the year 1940-41, to which the provisions of the Excess Profits Tax Act applied and if proceedings under the said Act were pending for any chargeable accounting period under the Excess Profits Tax Act on the date of declaration, use of information contained in the declaration for the purpose of assessment under the Excess Profits Tax Act could be made. If, however, no such proceedings were pending and under the law such proceedings could not be brought into being, no use of the information contained in the declaration for the purpose of assessment under the Excess Profits Tax Act could be made. Similar will be the position in respect of other Acts.

24. The provisions of the 1976 Act pertaining to wealth-tax, are contained in Sections 13 and 15 of the said Act. Section 13 pertains to those cases where the voluntarily disclosed income to terms of Section 3(1) is represented by cash including bank deposits, bullion, investment in shares, debts due from other persons, commodities or any other assets specified in the declaration. No wealth-tax is payable by the assessee in respect of such assets declared by the assessee voluntarily in terms of Section 3(1) provided the conditions specified in Sub-section (1) of Section 8 are fulfilled by the declarant.

25. Section 15 concerns itself exclusively with the disclosure of wealth. Under Sub-section (1) thereof a person could make a declaration in respect of-- (a) the net wealth chargeable to wealth-tax for any assessment year for which he has failed to furnish a return under Section 14 of the Wealth-tax Act; or (b) the value of the assets which has not been disclosed, or the value of the assets which has been understated, in any return of net wealth for any assessment year," From the plain language of the aforesaid clauses, more particularly by the use of the word 'any', it is clear that the declaration under Section 15(1) can relate to any of the assessment years to which the provisions of the Act applied, i.e., for any of the assessment years from 1957-58 to 1975-76.

26. If a person makes a declaration under any of the situations referred to in Clauses (a) and (h) above, then immunity is granted to him under Sub-section (1) of Section 15 of the 1976 Act from prosecution and penal provisions of the Act, provided taxes and deposits in securities have been paid/made in terms of Sub-section (5) of Section 15, to which I will revert in detail later. The penal provisions applicable to situation (a) would be those contained in Section 18(1)(a) or 18(1)(6) of the Act and those applicable to situation (b) would be the ones contained in Section 18(1)(c) and/or 18(1)(b). The provisions pertaining to prosecutions were contained at the relevant time in Section 36 of the Act. According to it, a person could be prosecuted for his failure without reasonable cause to furnish in due time any return mentioned in Section 14 of the Act [section 36(1)(a)]. He could also be prosecuted for making a false verification in the return filed under Section 14 [section 36(2)]. Section 36, however, stood deleted with effect from 1-10-1975 by the Taxation Laws (Amendment) Act, 1975, and in its place new provisions were brought in with erfect from 1-10-1975 as per Sections 35A to 35N of the Act. The immunity from penalty and prosecution provisions of the Act, as granted by Sub-section (1) of Section 15 of the 1976 Act, was not available to the persons covered by the situation described in Clause (a) above, if notice under Section 14 or under Section 17 of the Act had been served upon them before 8-10-1975. If they had not filed the returns by 8-10-1975, that is the date on which the Voluntary Disclosure of Income and Wealth Ordinance came into force, they would have to face the penal consequences of Section 18(1)(a) and also the provisions of prosecution as contained in Section 36. If, however, they had filed the returns and they were not late in doing so, they will not be exposed to penal provisions in the normal course; but if they had filed the returns late, the normal consequences under the Act would follow, and such persons will not be eligible to the protection granted by Sub-section (1) of Section 15 of the 1976 Act even if they had filed returns within the statutory period mentioned in the 1976 Act, i.e., in between dates 8-10-1975 to 31-12-1975. If, however, they had not disclosed the value of some of the assets in such returns or had declared less value of such assets, they could file declarations in respect of such omissions or under-statements and if they did so they were eligible for the immunity in terms of Clause (b) of subsection (1) of Section 15. Such immunity would not, however, be available if, in the meanwhile and before 8-10-1975, assessments had been made in such cases either under Section 16(3) or Section 16(5) of the Act. The denial of immunity in such cases was, however, not total. It was denied only in relation to so much of the value of such assets as had been assessed in any assessment for the relevant assessment year. Penalty proceedings in such cases, if initiated by the WTO, would continue in the normal course; similarly if any prosecution is contemplated in relation to matters arising out of such assessment, it would also be not stopped as the immunity granted by Sub-section (1) of Section 15 did not cover such prosecutions. But, if the value of such assets, as had been assessed, was still less than what its real value was or if some of the assets had not at all been included in such assessment, their real value could well be declared in terms of Clause (b) of Sub-section (1) of Section 15 and in respect of such declaration immunity from penalty and prosecution will be available to the extent indicated in proviso (ii) to Sub-section (1) of Section 15.

27. Section 15 of the 1976 Act like Section 14 of the said Act and unlike Section 3 thereof did not modify the provisions of the existing statute in any respect, except that in cases of the declarants covered by Clauses (a) and (b) of Sub-section (1) of Section 15, the penalty and prosecution provisions of the Act were made inoperative in the circumstances referred to in the immediately preceding paragraph. The rest of the provisions of the Act applied to such declarants and their assessments to wealth-tax had to be made in accordance with the normal provisions of the Act. The declaration was, however, to be made to the Commissioner in terms of Section 15(2) in the prescribed form and was to be verified in the prescribed manner. Sub-rule (1) of Rule 5 prescribes that the declaration referred to in Sub-section (1) of Section 15 shall be made in Form C. Sub-rule (2) of the said rule further stipulated that-- "Where a declaration under Sub-rule (1) is made in respect of net wealth, or includes any declaration in respect of net wealth, for any assessment year or years, the declaration shall be accompanied by a return of net wealth for such year or years in the form prescribed under Section 14 of the Wealth-tax Act, 1957....

It will be seen from the portion italicized above that in cases covered by Clause (a) of Sub-section (1) of Section 15 of the 1976 Act, i.e., where the declarant had failed to furnish a return under Section 14 of the Act, the declarant is required to file not only the declaration in Form C but also a 'return of net wealth' for the relevant year or years. Such return is not required to be filed in cases covered by Clause (b) of subsection (1) of Section 15, i.e., where a return has been filed by the assessee but the value of the assets had either been understated or value of certain assets had not at all been disclosed; a mere declaration in Form C was required to be filed in such a case.

Even Form C makes this position clear. Column 5 thereof pertains to 'statement of net wealth declared'--Amount of net wealth declared has to be given in this column for each assessment year separately. The column then requires the assessee to 'attach a return of net wealth for each assessment year'. Column 6 of Form C pertains to 'statement of value of assets not disclosed or under- stated.' This information is given ex facie in terms of Clause (b) of subsection (1) of Section 15.

It is not required by the form that even this information should be given in 'the form prescribed under Section 14 of the Act.' This information is to be given in the proforma given in column 6 of Form C.28. The immunity granted by Sub-section (1) of Section 15 is made conditional, apart from complying with the formalities indicated above, on the payment of tax on such disclosed wealth. Sub-section (5) of Section 15 provides that 'the immunity provided under Sub-section (1) shall not be available to the declarant unless the wealth-tax chargeable in respect of the net wealth for the assessment year or years for which the declaration has been made is paid by the declarant in accordance with the provisions of Section 5 and the declarant invests in the securities referred to in subsection (3) of Section 3 within the time specified in Sub-section (4) of Section 5 the sum specified in Sub-section (6) of this section.' Explanation to Sub-section (5) of Section 15 explains the mode of computation of wealth-tax which is to be deposited by the declarant in accordance with Sub-section (5) referred to above. Clause (a) of the said Explanation deals with the situation covered by Clause (a) of Sub-section (1) of Section 15, i.e., where no return of net wealth had been filed by the assessee under Section 14 of the Act. In such a case, the wealth-tax shall be computed at the rates applicable to the net wealth of an assessee in the assessment year concerned. Declaration under Clause (b) of Sub-section (1) of Section 15 was to be filed in a case where a return had been duly filed by the assessee but he had either omitted certain assets from inclusion in the said return or had understated their value. Two situations could arise in such a case: (i) where assessment with reference to the said return had not been completed; or In the former case, the wealth-tax had to be computed by adding to the returned wealth the declared value under the declaration and treating the aggregate as the net wealth for the assessment year concerned and working out the wealth-tax payable thereon. From such wealth-tax, the tax payable on the returned wealth was to be deducted. The difference was to be deposited in terms of Sub-section (5) of Section 15. In the latter case, computation of wealth-tax to be deposited had to be made by aggregating the assessed value for the assessment year concerned with the declared value of assets for that year and treating the aggregate as the net wealth and computing wealth-tax with reference to it. From such wealth-tax, the wealth-tax payable on the assessed wealth was to be deducted. The difference represented wealth-tax which had to be deposited by the declarant under Sub-section (5) of Section 15, read with Section 5.

29. Sub-section (6) of Section 15 laid down the procedure for computing the sum which had to be invested by the declarant in the securities referred to in Sub-section (3) of Section 3 within the time mentioned in Sub-section (4) of Section 5.

30. A copy of the aforesaid declaration in Form C, along with the wealth-tax returns, wherever they had been filed in accordance with Rule 5(2) was required to be forwarded by the Commissioner in terms of Sub-section (4) of Section 15 to the WTO, who could take into account the information contained in the declaration 'for the purposes of the proceedings relating to assessment or reassessment of the net wealth of the declarant under the provisions of the Wealth-tax Act'. This provision is in keeping with the scheme of Sub-section (1) of Section 15, namely, that the 1976 Act modifies the 1957 Act only with reference to the penalty and prosecution provisions for the rest, the normal provisions of the Act hold. As such, the declaration filed in terms of Sub-section (1) of Section 15 has to be referred to the WTO to enable him to make use of the information contained in it for the purposes of assessment or reassessment under the Act. The Commissioner himself can do nothing with the declaration and the returns of wealth-tax, if any, filed with it. He can neither make assessment of wealth nor can he quantify tax thereon. He has merely to see that the declaration is in proper form, accompanied with returns, wherever necessary, is properly verified and that tax payable in respect of it and deposit in securities in terms of Sub-section (5) of Section 15 have been made.

After verifying the due compliance of the above formalities regarding the declaration, it has to be forwarded to the WTO, who, as noted above, may make use of the information contained in the declaration either in the proceedings of assessment which might be pending with him on the date of declaration or which might come into being on account of filing of the returns of wealth by the assessee suo moto or which are brought into existence by the WTO by taking action under the relevant provisions of the Act. The relevant provisions of the Act, bringing into existence assessment or reassessment proceedings, are contained in Sections 14, 15 and 17 of the Act. Section 14 makes it obligatory on the part of an individual or a HUF to file suo moto a return of wealth before the specified date if his net wealth is such as is liable to wealth-tax. If such a return is filed by the assessee within the time mentioned in Sub-section (1) of Section 14, an assessment proceeding comes into being.

31. If a person has not furnished a return within the time allowed under Section 14, he may still furnish it at any time before the assessment is made in terms of Section 15. With the filing of such a return also, an assessment proceeding comes into being. As has been pointed out earlier, there was no time limit for completion of assessment under the Act up to 31-12-1975. Assessment proceedings for any of the years right from the assessment year 1957-58 onwards could, therefore, be brought into being by filing wealth-tax returns under Section 15 in respect of the said assessment years, if assessments in respect of those years had not already been completed.

32. Apart from the above, the assessment proceedings could also be brought into existence by the WTO by taking action in terms of Sub-section (2) of Section 14 or Section 17. Action under Sub-section (2) of Section 14 could be initiated by the WTO by serving notice on an assessee under the said sub-section before the end of the assessment year concerned. In terms of Section 17, however, a. notice calling for the filing of the returns could be served at any time within eight years of the end of the assessment year concerned. Action under Section 17 could be taken either for assessment or for reassessment, whereas action under Section 14(2) was possible only for assessment. The sweep of the notices issued under Sub-section (2) of Section 14 and Sub-section (1) of Section 17 in terms of the period covered by them is much less than the sweep of Section 15. Whereas, in terms of Section 17, the WTO could reach, in October 1975, up to the assessment year 1967-68 only [excepting the cases covered by Sub-section (2) of Section 17], the suo moto filing of the returns under Section 15 could be for the assessment years 1957-58 onwards and valid assessments in respect of such assessments could be made up to 31-12-1975 and, even thereafter, up to 31-3-1979 [as per Clause (a) of Sub-section (1) of Section 17A].

33. Thus, the information given by an assessee in Form C could be used for the purpose of making the assessments in the following circumstances: (i) when a return had been filed under Sub-section (1) of Section 14 but the assessment in respect of which had not been completed till the filing of the declaration; (ii) when a notice under Sub-section (2) of Section 14 or Section 17 had been issued for a particular assessment year, thereby bringing the assessment proceedings into being, but the same had not yet culminated into an assessment; and (iii) when the assessee had filed suo moto returns under Section 15 before the completion of assessment for a particular year.

For the purposes of reassessment, however, the information contained in the declaration could be used only by reopening the assessment for the given year under Section 17.

34. Sub-section (7) of Section 15 of the 1976 Act stipulated that 'where any wealth-tax is paid by the declarant for any assessment year in accordance with the provisions of Section 5, read with Sub-section (5) of this section, credit, therefore, shall be given to the declarant in the assessment made under the Wealth-tax Act for that year'.

1. Section 16 of the 1976 Act provided immunity to the declarant from penalty, prosecution, etc., under the Customs Act, 1962, and the Gold (Control) Act, 1968, on fulfilment of certain conditions specified therein.

2. Section 17 of the said Act stipulated that 'the provisions of Chapter XV of the Income-tax Act relating to liability in special cases and of Section 189 of that Act or of Chapter V of the Wealth-tax Act relating to liability to assessment in special cases shall, so far as may be, apply in relation to proceedings under this Act as they apply in relation to proceedings under the Income-tax Act or, as the case may be, the Wealth-tax Act.

3. Section 19 similarly confers powers on the CBDT to remove difficulties in giving effect to the provisions of the 1976 Act, provided the orders passed by the CBDT under the said section are not inconsistent with the provisions of the 1976 Act.

4. Section 20 confers on the CBDT power to make rules for 'carrying out the provisions' of the 1976 Act.

36. From the aforesaid review of the various provisions of the 1976 Act, it is clear that it is an adjunct to the 1961 Act and the 1957 Act and its sole object is to bring within the regular stream of taxation the incomes and wealth, which have been straying, for various reasons, out of it; it is in aid of the said Acts and has to be read in their context and not de hors the said Acts. A separate schedule of taxation, de hors the total income, is visualized only in respect of voluntarily disclosed income covered by Section 3 of the 1976 Act but even here the tax paid is income-tax. The disclosed incomes under Section 14 and voluntarily disclosed wealth under Section 15 of the 1976 Act are, however, to be assessed in the normal course in accordance with the respective provisions of the 1961 Act and the 1957 Act. There is no separate procedure for them under the 1976 Act. Its main purpose is to bring out the hidden income and wealth into the open and on to the income-tax and wealth-tax records and to collect tax in respect of such declared incomes and wealth. The immunity granted by the 1976 Act is, may it be noted, not from taxation and payment of tax but from penalties and prosecutions under the 1961 Act and the 1957 Act and confiscations, prosecutions and penalties under the Customs Act and the Gold (Control) Act. The payment of tax is, in fact, condition precedent to earning the immunities flowing from the declarations under Sections 14 and 15. A declaration, without payment of tax will not earn immunity for the declarant from penalties, prosecutions, etc., and unless this be so, a person may not make declaration. The entire purpose of the 1976 Act is to lure out the hidden incomes and wealth with a view to collect tax thereon by giving the bait of immunity from penalties, prosecutions, and confiscations, etc. A declaration without payment of tax would be meaningless as it would confer no immunity on the declarant--see Sections 14(5) and 15(5) of the 1976 Act. Therefore, the granting of immunity and payment of tax have been interlinked and constitute the basic core of the entire scheme. One is, in fact, the quid pro quo for the other. Without one the other does not stand. The interpretation, therefore, that should be placed on the various provisions of the 1976 Act should subserve the above broad scheme and an interpretation which defeats the basic purpose of the 1976 Act and makes any of its provisions otiose or ineffective should be shunned, without of course doing violence to the language of the 1976 Act.

37. Another important feature of the 1976 Act that is worth bearing in mind is that it creates no charge either of income-tax or of wealth-tax. That charge already subsists by dint of the various provisions of the said two Acts. The 1976 Act merely extends invitation to the assessees to bring their tax affairs in accordance with the normal law of the land by availing of the opportunity provided by said Act. There is no compulsion in said Act. Whether to accept the invitation extended by it or not is entirely for the individual to decide. No penal consequences are provided in the said Act for not accepting the offer. The said Act merely promises certain benefits, concessions and immunities to use the language of Section 18 of the 1976 Act, if the offers contained in Sections 3, 14 and 15 of the said Act are accepted and the conditions stipulated therein are fulfilled.

Conferment of the benefits cannot, in the scheme of the said Act, be divorced from the conditions to be fulfilled. It is, of course, open to an individual not to avail the offer and to face the normal consequences of the law. But he cannot claim the benefits and yet refuse to carry out the obligations or contest the consequences flowing from such compliance on legalistic grounds. Any attempt to claim the benefits but not to carry out the obligations shall be contrary to the scheme of the said Act and defeat its very purpose and should, therefore, not ordinarily be countenanced unless the language of the said Act itself compels such an interpretation and outcome.

38. While interpreting the provisions of a statute, one must look at all the relevant provisions, harmonize them and interpret them in a manner which will give effect to all of them, making none of them otiose or redundant and if one is faced with two alternative interpretations one of which effectuates the purpose of the said Act, and the other defeats it, the Court should lean towards the former rather than towards the latter. In this connection, it may be well to refer to the observations of their Lordships of the Supreme Court in the case of CIT v. S. Teja Singh [1959] 35 ITR 408 where their Lordships observed as follows: ... On the construction contended for by the respondent, Section 18A(9)(i) would become wholly negatory, as Sections 22(1) and 22(2) can have no application to advance estimates to be furnished under Section 18A(3), and if we accede to this contention, we must hold that though the Legislature enacted Section 18A(9)(b) with the very object of bringing the failure to send estimates under Section 18A(3) within the operation of Section 28, it signally failed to achieve its object. A construction which leads to such a result must, if that is possible, be avoided....

Their Lordships quoted with approval the observations of Lord Dunedin in Whitney v. C1R [1925] 10 TC 88, wherein Lord Dunedin stated as follows: A statute is designed to be workable, and the interpretation thereof by a Court should be to secure that object, unless crucial omission or clear direction makes that end unattainable. (p. 415) 39. Bearing in mind the above general observations, I now turn to examine the controversy in the present case.

40. It has been pointed out above that the provisions bearing on the limitations pertaining to filing the returns, completion of assessments, initiating assessment or reassessment proceedings and finalising of such assessments, etc., are not identical in the 1961 Act and the 1957 Act. It is, therefore, but natural that the rules dealing with Sections 14 and 15 of the 1976 Act (i.e., rules 4 and 5 of the 1975 Rules) will be different from each other in their ambit and requirements. The two could not be cast in the same mould. As we have noted above, Rule 5(2) requires that where a declaration is made in respect of net wealth for any assessment year, the declaration shall be accompanied by a return of net wealth for such year. There is no corresponding provision in rule 4. This differential treatment, in the face of more or less identical language in Sub-section 4 of Sections 14 and 15 of the 1976 Act, respectively, has its rationale rooted in the different provisions of the two Acts. Under the 1961 Act, there is a time limit for filing the returns as contained in Section 139(4) of the said Act. No valid return, in violation of the said provisions, could be filed suo moto and as the 1976 Act did not intend to modify the assessment procedure as laid down under the 1961 Act in respect of the disclosed income, the rules made thereunder could not, and did not, make provision for filing the income-tax returns in cases where no returns had earlier been filed. Similar is, however, not the position under the 1957 Act. As noted above, there was no time limit under the Act up to 31-12-1975 for completion of assessments. There is no time limit whatsoever mentioned in Section 15 of the Act except stating that the return under Section 15 could be filed any time before the assessment was completed. It was, therefore, possible under the Act that a person could file returns for the assessment years 1957-58 onwards in between the period 8-10-1975 and 31-12-1975, if he had not been assessed in respect of any of those years earlier. Sub-rule (2) of Rule 5 takes note of this legal position and, therefore, requires that a declaration of net wealth for an assessment year shall be accompanied by a return of net wealth for such year. It is not merely a convenient way of furnishing information regarding net wealth, as suggested by the learned counsel for the assessee. If this were so, the logic would apply mutatis mutandis to the declaration of income under the 1961 Act also, for the income-tax return in that case also would provide the most convenient way of furnishin the information about the income of an assessee and it is well known tuat the concept of income under Section 14 of the 1976 Act is not different from what it is under the 1961 Act.

This explanation does not, in my opinion, provide the clue to the differential treatment given to the declaration of income and wealth under rules 4 and 5. The only rationale explanation of this differential treatment is what has been explained to us by the learned departmental representative and to which I have made reference above, viz., that filing of a voluntary return under Section 15 for the years 1957-58 onwards was possible under the Act during the period 8-10-1975 to 31-12-1975, covered by the 1976 Act and, therefore, Sub-rule (2) of Rule 5 made it incumbent on the declarant to file his returns of net wealth also for the corresponding period so that the necessary legal results from filing such return could follow in law, enabling the WTO to make assessment under the Act by bringing into existence an assessment proceeding. A suo tnoto return under the Act could be filed by an assessee on his own, may be under the bite of his awakening conscience or by somebody's pursuasion or by the inducements provided by the 1976 Act. Whatever be the motivation of filing such a return, it would nevertheless be one under Section 15, as it is filed in the ultimate analysis voluntanly, though beyond the statutory time stipulated under Sub-section (1) of Section 14 of the Act. Once filed, such a return would constitute valid basis for assessment under Section 16 of the Act. The mere fact that the returns of net wealth have been filed to avail of the immunities granted by Sub-section (1) of Section 15 of the 1976 Act and that Sub-rule (2) of Rule 5 provides that 'a declaration of net wealth shall be accompanied by a return of net wealth' will not render the return so filed any the less voluntary for, as noted above, the 1976 Act itself is voluntary and requires voluntary compliance if one wants to earn immunity granted under Section 15(1) of the said Act. If the assessee had filed the said returns de hon the 1976 Act, he would earn no immunity. If he had not filed them at all, he would still be outside the pale of the 1976 Act and subject to all the rigours of Section 36 of the Act and in suitable cases of the Customs Act and the Gold (Control) Act. One instance of how the 1976 Act enures for the benefits of an assessee and how detrimental in its absence this could be for an assessee is provided by the case of R.Seshammal v. CIT [1981] 130 ITR 81 (Mad.). If the assessee in that case had not made a disclosure under Sections 14 and 15 of the 1976 Act, she would have forfeited all her primary gold and jewellery. As she had done so, she was saved by the operation of Section 16 of the 1976 Act.

The above case illustrates in the most striking manner the benefits derived by an assessee by availing of the opportunity provided by the 1976 Act. There is nothing in the language of the 1976 Act or the Act which might suggest that the returns of wealth filed along with the declaration in respect of net wealth under Section 15(1) of the 1976 Act, in accordance with the requirement of Sub-rule (2) of Rule 5 would not be a valid return for the purpose of Section 15 of the Act. The learned counsel for the assessee had pointed out that the declaration and the accompanying returns under Section 15 of the 1976 Act were filed before the Commissioner, whereas the returns under Section 14/15 of the Act furnished to the WTO and, therefore, the return of net wealth filed under Sub-rule (2) of Rule 5 is not the same thing as the return under Section 15 of the Act. The distinction pointed out by the learned counsel is of course valid but that does not detract from the fact that the return is nevertheless the 'return of net wealth' and, besides, this difference as regards the forum is only a minor matter of procedure. The Commissioner can do nothing with the return. He has to send it to the WTO for necessary action. As all matters regarding voluntary disclosure were centralized with the Commissioner, the filing of the return, in the first instance, is also required to be before him. He is, however, merely a channel and is, under the law, required to forward it to the WTO, who alone can proceed with it and make assessment with reference to it. Nothing, therefore, turns on it. The quality of the return does not get altered thereby.

41. The learned counsel for the assessee had pointed out that the language of Section 15 of the 1976 Act nowhere provided for the filing of the returns of the net wealth to match the declaration of net wealth and that the rule making authority could not extend the provisions of the statute by making the rule. The principle is, of course, axiomatic with which there could be no quarrel. The rule making power has been conferred on the Board by Section 20 of the 1976 Act and this power has to be exercised by the Board 'for carrying out the provisions of this Act'. It was, therefore, for the assessee to show that the Board has, in some respect, transgressed its power by enacting Sub-rule (2) to Rule 5 and that the enactment of that sub-rule was not for carrying out the provisions of the 1976 Act. The learned counsel for the assessee has not been able to demonstrate as to how the said sub-rule made by the Board was contrary to the provisions of the 1976 Act. In fact, it appears to me that the said Sub-rule (2) is necessary to effectuate the main purpose of Rule 5 and of the 1976 Act, for by filing such returns the ground is laid for effectively using the information contained in the declaration for making assessments by bringing into existence the proceedings of assessment in terms of Section 15 of the Act. The rule has the same force as the statute and it also has the sanction of the Parliament inasmuch as Sub-section (3) of Section 20 of the 1976 Act specifically requires the Central Government to place every rule before the Parliament and unless it is modified or disapproved by the Parliament, the rule has the sanction of the Parliament. In the present case, it is not the contention of the assessee that Sub-rule (2) to Rule 5 has not been approved by the Parliament. To say, therefore, that the sub-rule has less sanctity than the statute itself would not be correct.

42. In fact, the learned counsel had never called in question the vires of Sub-rule (2) to Rule 5 before us. It is also not that the assessee has not complied with the said sub-rule. In fact, the logic advanced by the learned counsel, i.e., that the rule making authority could not have made Sub-rule (2) to Rule 5, if carried to its limit, it will not in any way advance the assessee's case, for, if the returns of net wealth would not have been required to be filed through Sub-rule (2) the assessee need not have filed them. The fact, however, is that he has filed them and they are duly verified and complete in all respects.

Can they be ignored by the WTO, once they are on his record If they are not under Rule 5, they are straight under Section 15 of the Act. If they are under Sub-rule (2) to Rule 5, they are nonetheless the returns of net wealth. The WTO cannot regard them as mere scrap of paper. Once filed they have to be taken to their logical conclusion. There can, therefore, be no escape from assessments by following this line of reasoning, once it is held that the valid returns of net wealth have been filed.

43. It was perhaps faced with this difficulty that the assessee's learned counsel took the stand that the return of net wealth filed under Sub-rule (2) of Rule 5 was not return of wealth under the Act; it was merely 'in the form prescribed under Section 14 of the Act' and that if the sub-rule intended that the return of net wealth be filed under the Act, it could have straightaway said so, rather than using the roundabout expression. This argument does not appeal to me. It is well to remember that Sub-rule (2) of Rule 5 does not say that 'declaration shall be accompanied by a statement giving details of net wealth for such year or years in the form prescribed under Section 14 of the Act'; it in unambiguous terms lay down that 'the declaration shall be accompanied by a return of net wealth for such year or years in the form prescribed under Section 14 of the Act'. The words 'return of net wealth for such year', as used in Sub-rule (2) of Rule 5 have not been defined in the 1976 Act. As per provisions of subsection (3) of Section 13 of the 1976 Act, the said words have to be understood in the same sense in which they are used under the Act. The concept of 'net wealth' is defined in Clause (w) of Section 2 of the Act and provision for filing a 'return' of net wealth is made in Section 14 of the said Act. This return has to be 'in the prescribed form'. The use of the words 'in the form prescribed under Section 14 of the Wealth-tax Act' immediately after the phrase 'a return of net wealth for such year or years', in Sub-rule (2) of Rule 5, has, therefore, to be understood in the above context. It merely serves to describe the 'return of net wealth' and explains that the form of such return is prescribed under Section 14. To read this descriptive phrase in any other sense, particularly restricting the meaning of the phrase 'a return of net wealth' and equating it with 'statement giving details of net wealth' would not, in my opinion, be correct. A 'return of net wealth' has a certain connotation under the Act and its meaning does not get changed merely because Sub-rule (2) of Rule 5 further clarifies that it will be in the form prescribed by Section 14. That is, more is less, the phraseology used in Section 14, itself. By borrowing it in Sub-rule (2), no different meaning was intended to be ascribed to the phrase 'return of income'. It has, in my opinion, the same connotation as that spelled out by Section 14. That the draftsman could have used a different phraseology instead of the one actually adopted, would not justify giving a different meaning to the phrase from what the plain language justifies, for the draftsmen's language may differ from person to person and simply because certain drafts would have satisfied the learned counsel more, it would not be correct that a different meaning be ascribed to the plain language of the draftman by imputing to him something which he has not said. What has to be filed along with the declaration is the 'return of net wealth'. Such return, may it be noted, is not part of the declaration; it is in addition to it. It is verified independently of the declaration. Both of them are, of course, supplementary to each other; but nevertheless have separate existence independent of each other and the two can subsist de hors each other.

One of them is filed under Sub-rule (1) and another under Sub-rule (2).

The declaration filed under Sub-rule (1) will not have the same legal consequences as the return would. Whereas no legal assessment is possible under the Act on the basis of the declaration alone, one is possible on the basis of the return of wealth filed in the prescribed form. Will such legal consequences be denied only because the return of wealth is filed in terms of Sub-rule (2) of Rule 5 Will such a return not bring into existence a proceeding of assessment under Section 15 of the Act which can culminate into a valid assessment Is there any provision in the 1976 Act which compels such an inference 44. A careful reading of the 1976 Act as a whole leaves no doubt in my mind that it is not so. The 1976 Act is not a piece of legislation as noted earlier de hors the 1961 Act and the 1957 Act. It is no doubt independent of the said Acts but in the same sense in which the Finance Act is. Its main purpose is to effectuate the 1961 Act and the 1957 Act and not to supplant them and to create a separate charge or a separate category of income or wealth. All the terms used in it and not defined in it specifically have to be assigned the same meaning as those given to them in the 1961 Act and the 1957 Act. There is, therefore, no reason to believe that a 'return of net wealth' as used in Sub-rule (2) of Rule 5 will have a meaning different from that assigned to it in the Act. It is a return of wealth under the Act even though filed under inducement of the 1976 Act to earn immunities granted by it. The quantum of the total income returned in it cannot be different from that mentioned in the declaration. The declaration, in other words, is fully matched by the return of wealth. It would as such be an idle and redundant act on the part of the WTO to ask once again the assessee to file returns by issuing notices under Section 17 of the Act. The same returns would be filed once again in response to such notices. It could not, in my opinion, be the objective of the Legislature or the Board to prescribe procedures which would be meaninglessly repetitive. Instead of requiring the filing of the returns of net wealth in the prescribed form, the rule could as well have provided that the details of the net wealth shall be given in the same form in which details of wealth are given while filing the return of wealth. The verification of the declaration would cover these details as well. Instead of laying down this procedure and leaving it to the WTO to call for the returns under the relevant provisions of the Act to match the said declaration, the rule prescribed that in respect of net wealth the returns of net wealth in the prescribed form must also be filed simultaneously so that assessment for all the years could proceed apace without undue loss of time. There is nothing unreasonable in this requirement. Instead it carries out the purpose of the 1976 Act more expeditiously.

45. This requirement also served another purpose, viz. to bind the assessee to his declaration to effectuate the purpose of the declaration under the 1976 Act. Declaration of net wealth under the 1976 Act, as noted earlier, could be made for any year from the assessment year 1957-58 onwards. Action under Section 17 of the Act could, however, be taken only for eight years preceding the assessment year 1975-76 as on the date of declaration. If, therefore, a person was allowed to make declaration of net wealth for the assessment year 1957-58 onwards but liability to tax on him could not be fastened for a year beyond that covered under Section 17, the purpose of the 1976 Act would be defeated in respect of those years to which provisions of Section 17 could not be applied. In respect of those years, if the above requirement of Sub-rule (2) of Rule 5 be not there, a piquant situation might arise that though there was declaration of net wealth yet no tax could be collected from the assessee in respect of such declared wealth. Could, therefore, be any meaning in such a declaration and would it be serving the object and purpose of the 1976 Act Declaration is made so that tax is paid on the hidden wealth and it comes out into the open. Payment of tax and granting of the immunity are, for this reason, interlinked. A declaration without payment of tax brings forth no immunity and without immunity the declaration is barren. When such is the scheme of the 1976 Act, I must adopt the interpretation which will effectuate the purpose of the 1976 Act rather than defeat it.

46. The returns of net wealth filed under the 1976 Act, as noted above, are as much voluntary as returns filed by the assessee under the weight of his own conscience. If the latter could be a return under Section 15, the former would as well be, for, as noted earlier, the 1976 Act, as such, creates no charge of wealth-tax and no obligation to file the return of net wealth. That charge is already there under the- Act. It merely serves to persuade the assessee to file the returns in exchange for certain concrete benefits which it promises to confer on the assessees if they paid taxes on the basis of their declarations. Not to regard such a return as voluntary would not, in my opinion, be justified. It is a return under Section 15 of the Act though prompted by lure of earning immunity promised by the 1976 Act, it is filed with the declaration but has separate existence and separate legal consequences flowing from it. The regular assessment with reference to such return is, in my opinion, possible.

47. A point was made by the learned counsel for the assessee that no reassessment under the Act is possible on the basis of such returns filed under Sub-rule (2) of Rule 5 and that in such a case action under Section 17 was inevitable and that, therefore, it would not be correct to regard the returns filed under Rule 5(2) as returns of net wealth under the Act. The above argument appears to be based on misreading the Sub-rule (2) of Rule 5 for, as pointed out above, a return of net wealth has to be filed only in cases covered by Clause (a) of Sub-section (1) of Section 15 of the 1976 Act, i.e., where a return of wealth-tax has earlier not been filed and where notices under Sections 14 and 17 of the Act have not been served. The return is not to be filed in respect of cases covered by Clause (b) of subsection (1) of Section 15 of the 1976 Act where the returns have been filed but the value of some assets has either not been disclosed or the value of assets has been understated. In the cases covered by Clause (b), again two situations are possible: (i) where as a result of the return filed earlier, assessment has been completed; or In the latter case, the assessment proceeding is still pending and, therefore, the information contained in the declaration filed in Form C can be used for assessment. It is not necessary to provide for the filing of the return of net wealth in such a case to effectuate the provision of the 1976 Act. If, however, assessment has already been completed, no useful purpose will be served by filing the return of net wealth; for, in such a case, reopening of the assessment is necessary for making use of the information contained in the declaration as the 1976 Act makes no amendment to the procedure of assessment or reassessment. Rule 5(2), therefore, does not require filing of a return of net wealth in such cases. It requires filing of the return of net wealth only in those cases where they may have legal meaning and effect in terms of the Act and where they can be acted upon in terms of Section 15, read with Section 16 of the Act. It is not, therefore, correct to say that the returns filed in terms of Rule 5(2) may not have legal effect under the Act in certain situation. The filing of returns has been prescribed under Rule 5(2) only in those cases where these returns will have legal effect and, therefore, in my opinion, they have to be treated as valid on the basis of which valid assessments are possible.

48. What would happen in those cases where the assessments have been completed and then declarations are filed in terms of Clause (b) of Subsection (1) of Section 15 of the 1976 Act Even though it is not necessary to express an opinion on this aspect of the question as for the determination of the present appeals, yet as the general scheme of the 1976 Act has been examined, it may be pointed out that in such cases the WTO will have to take steps to reopen the assessment in question on the basis of the information contained in the declarations, if permissible in law [it may be pointed out in the passing that in Clause (a) of Sub-section (1) of Section 17 of the Act there is no reference of the word'information'and, as such, it could not be correct to link the use of the word 'information' as used in Sub-section (4) of Section 15 of the 1976 Act with the provisions of Clause (a) of Sub-section (1) of Section 17]. It may, however, be noted that the declarant will, even in such cases, have to deposit tax and make investment in the securities in terms of Sub-section (5) of Section 15.

The tax so paid is to be adjusted in terms of Sub-section (7) of Section 15 against the tax demand raised on regular assessments, wherever such assessments can in law be made. What would, however, happen in cases where reassessments are not possible under the law is not spelled out in Sub-section (7) of Section 15, nor under any other provision of the Act. Will the tax paid under Sub-section (5) of Section 15 be refunded to the assessee in such a situation It would not be correct to express any definitive opinion on this aspect of the problem as it has not been debated before us, nor does it arise for determination in the present appeals because as held earlier, in my opinion, valid assessments are possible on the basis of the returns filed by the assessee in compliance with Sub-rule (2) of Rule 5 and such assessments have, in fact, been made in the present case.

49. My learned brother has not expressed any opinion on the merits of the case. I also, therefore, refrain from expressing my opinion on it.

If necessary the matter will be gone into at the appropriate stage.

50. For statistical purposes, I will treat the assessee's appeals as unsuccessful.

Since we have differed in our opinion on the following question in deciding the above appeals, we refer the matter to the President of the Tribunal for a decision on the point at issue by a Third Member: Whether the returns accompanying the declarations under Section 15 of the Voluntary Disclosure of Income and Wealth Act, 1976, in terms of Rule 5(2) of the Voluntary Disclosure of Income and Wealth Rules, 1975, can be treated as returns filed under the Wealth-tax Act for the purpose of making valid assessments 1. On a difference of opinion between the learned members who heard these appeals originally, the following point of difference was stated: Whether the returns accompanying the declarations under Section 15 of the Voluntary Disclosure of Income and Wealth Act, 1976,, in terms of Rule 5(2) of the Voluntary Disclosure of Income and Wealth Rules, 1975 can be treated as returns filed under the Wealth-tax Act for the purpose of making valid assessments The cases having been assigned by the President to himself, they have come up before me as Third Member for hearing under Section 255(4) of the 1961 Act, as applied to the wealth-tax proceedings under Section 24(11) of the 1957 Act.

2. The learned counsel, Dr. D. Pal, assisted by Shri S.P. Choudhary for the assessee strongly relied on the order of the learned Judicial Member. In particular, he took pains to point out the fallacy in the reasoning given by the learned Accountant Member for taking the view against his client. The main thrust of his argument is that the schemes envisaged under the 1976 Act for income and wealth are materially different and that the object behind not providing for filing returns along with disclosure declarations relating to income is not what has been attributed by the learned Accountant Member. According to him, the filing of return or information of the type required to be filed in the return was not considered necessary in the case of disclosure of income as the disclosed income was to be taxed under the scheme as a separate block of income in accordance with the rates prescribed under the schedule to the Act. The intention behind prescribing for giving the details as are filed in the return form for wealth-tax, according to him, was to pin down or tie down the assessees to the identifiable assets as parts of their wealth. In this context Dr. Pal pointed out that Rule 5(2) did not contemplate the filing of returns in the cases of partially escaped wealth as column 6 of Form 'C itself was sufficient to serve the purpose. In nutshell, his argument is that the returns filed as annexures to the declaration in Form 'C were not and could not be treated as returns filed voluntarily under Section 15 of the Act to give the WTO jurisdiction to make assessments without recourse to Section 17 of the Act. He also contended that Section 15(4) of the 1976 Act clearly indicated that the WTO could make use of the information contained in the declaration (which may include information given in the return filed along with the declaration) but did not give him jurisdiction to treat the returns filed and marked annexures as returns under Section 15. It is further contended that the return under Section 15 has to be filed before the WTO and, therefore, assuming the returns filed as annexures to the declaration in Form 'C could be treated as returns, they would not be returns under Section 15 as those were filed before the Commissioner and not before the WTO.3. Shri MX. Bhattacharjee, the learned standing counsel for the department, assisted by Shri K. Subbarao, the senior departmental representative, on the other hand, strongly relied on the order of the learned Accountant Member. According to him, the learned Accountant Member has discussed the issue threadbare in his order duly pointing out the fallacy in the reasoning given by the learned Judicial Member.

He strongly urged that under the Act until Section 17A was introduced with effect from 1-4-1976, there was no time limit for making an assessment and that the returns of wealth under Section 15 could be filed by an assessee at any time before the assessment was completed and that, therefore, returns filed by an assessee in any manner, for any purpose and before any authority, if those conform to the returns to be filed under Section 14(1)/(2) of the Act, will have to be treated as returns under Section 15, giving the WTO jurisdiction to make the assessment on the basis of those returns. In this context, Shri Bhattacharjee pointed out that under the 1976 Act the Commissioner was bound to accept the declaration as filed by the assessees provided certain formalities provided under the 1976 Act were complied with. It was for the WTO to verify whether or not whatever was disclosed by the assessee was correct. If the interpretation sought to be given by the learned Judicial Member was accepted, he contended, the same will defeat the purpose of the 1976 Act.

4. I have heard the learned counsels of both the sides very carefully.

I have also gone through the orders of the learned members, the relevant provisions of the 1976 Act and the Rules and Schedule thereunder. The controversy has been brought out very succinctly in the point of difference stated by the learned members. Since the contentions raised on behalf of the parties are practically the same as were advanced before the Bench originally and have been dealt with by the learned members faithfully and elaborately, of course according to their own approach, it is not necessary for me to deal with each and every aspect in my order. In my opinion, it will suffice, in a case like the one before me, where every aspect has been dealt with in great detail, to give my reasons for agreeing with one or the other member.

5. The 1976 Act envisages disclosure of both income and wealth. The scheme for disclosure of income is mainly contained in Sections 3 to 12 of the 1976 Act. The important feature is that the voluntarily disclosed income under the said Act does not form a part of the assessee's total income as is understood under the 1961 Act and is liable to tax at the rates provided in Section 3(1) and the Schedule thereunder. In other words, the disclosure of income under the 1976 Act will have no bearing on the assessment under the 1961 Act as such except that what is disclosed will not be considered or included in the total income in income-tax assessments.

The scheme for disclosure of wealth, on the other hand, is materially different. This is evident from Sections 13 and 15 of the 1976 Act itself. Section 13 exempts assets out of the disclosed income under that Act. A reading of Sub-sections (5) and (6) of Section 15, on the other hand, provides that the rate of tax to be applied on the wealth disclosed will be ordinary rates applicable to net wealth each year or 2 1/2 per cent of the net wealth declared for any number of years, whichever is less. Further, in the case of escapement of net wealth altogether, column 5 of Form 'C, in which a declaration has to be filed, by itself requires the figure of the net wealth to be declared for each year as distinct from column 6 meant for disclosure of only specific assets or understatement in the value. It is, perhaps, for this reason that the rule making authority considered it necessary to have full particulars of the net wealth inasmuch detail as possible so that the declarant is tied down to a specific stand. Since a return form was readily available wherein there was provision for furnishing the necessary particulars, column 5 itself required the return of net wealth to be attached for each assessment year as laid down in Rule 5(2). In this context, it is necessary to refer to the rule which reads as under: 5. Form of declaration under Section 15 in respect of net wealth or value of assets not disclosed or understated.

(2) Where a declaration under Sub-rule (1) is made in respect of net wealth, or includes any declaration in respect of net wealth, for any assessment year or years, the declaration shall be accompanied by a return of net wealth for such year or years in the form prescribed under Section 14 of the Wealth-tax Act, 1957(27 of 1957).

The rule requires that the declaration in Form 'C in an approprite case should be accompanied by a return of net wealth in the form prescribed under Section 14 of the Act. This shows on the face of it that the return was filed as an annexure or a part of the declaration and not as an independent return as understood under the Act. The mere fact that the rule making authority, instead of asking the declarant to file a number of details which go to make the net wealth separately, laid down that a return in a particular form should be attached, cannot and will not by itself make such a return or returns as returns under Section 15 of the Act.

6. Section 15(4) of the 1976 Act which provided for the Commissioner forwarding the declaration to the WTO, is also couched in a language which supports my reading of the rule and the form. It provides for forwarding a copy of the declaration, not even the original declaration, far less the returns of net wealth accompanying the declaration. Further, it gives the WTO a limited jurisdiction only, namely, he can use the information contained therein (meaning thereby the declaration) for the purpose of proceedings for assessment or reassessment. It is difficult, if not impossible, to read from this language that the declaration or, say, the return accompanying it as an annexure, can or will form the basis of assessment itself to give the WTO jurisdiction to make the assessment which he has not because of fetters on his power under Section 17 of the Act.

7. There is one more aspect which persuades me to adopt the view taken by the learned Judicial Member. The scheme under the 1976 Act is to induce the delinquent assessees to come forward and make a clean confession of their wrong doings. It provides for certain immunities.

If the declaration made is wrong or incomplete, the ordinary law will, of course, come into play and the assessees will have to suffer. To read from this the vesting of power which the WTO did not have under Section 17 and the assessee had, admittedly, not given by filing returns under Section 15 as such, to give him jurisdiction to assess power to make assessments for years for which he could not have taken action is simply inconceivable. On the other hand, it will be in keeping with the scheme of voluntary disclosure of income and wealth if it is read that the declarations of net wealth for the years for which the WTO could not take action under Section 17 were to be accepted in the spirit as whatever is offered is something that would have never come to the exchequer. For the years coming within the scope of Section 17, the WTO, if he found that the information contained in the declarations was wrong, could certainly take action on the basis of the information for making the correct assessment or reassessments.

8. There is, yet, another reason for justifying my aforesaid view. If such returns, filed as annexures to the declarations of net wealth as contemplated in Section 15(1)(a) of the 1976 Act, in Form 'C were to be treated as returns under Section 15 of the Act, it will be mandatory for the WTO to complete the assessments under Section 16 of the said Act on the basis of the returns. However, Section 15(4) of the 1976 Act does not at all contemplate assessments in all such cases. It is assumed that the tax payable on the basis of the wealth-tax declarations in terms of Sections 15(5)/(6) and paid by the declarant is correct. A copy of the declaration is passed on to the WTO to enable him to use the information contained in the declaration for the purpose of proceedings relating to assessments or reassessments, if necessary, and if the same can be used within the four corners of the Act.

9. Having regard to the above discussion, I am of the view that the returns being declarations in Form 'C under Section 15 of the 1976 Act, read with Rule 5(2) thereof, were not and could not be treated as returns filed under Section 15 of the Act, to give the WTO jurisdiction to make a valid assessment without invoking the provisions of Section 17 of the Act.

10. The order will be placed before the Bench for deciding the appeals according to the majority view.