M/S.tiruvengadam Investments (P) Ltd v. The Commissioner Of Income Tax Tamil Nadu Iv

IN THE HIGH COURT OF JUDICATURE AT MADRAS THE HONOURABLE Mrs.JUSTICE R.BANUMATHIandTHE HONOURABLE Mr.JUSTICE M.M.SUNDRESH M/s.Tiruvengadam Investments (P) Ltd.,represented by its Director,"Khivraj Estates" III Floor624, Anna Salai,Chennai-6. ... Appellant/Petitioner vs. 1. The Commissioner of Income Tax Tamil Nadu IV, 121, M.G.Road, Chennai-34. 2. The Deputy Commissioner of Income Tax, (Headquarters – IV) Office of the Commissioner of Income Tax, 121, M.G.Road, Chennai-34. ... Respondents/Respondents Prayer: Writ appeals filed under Clause 15 of the Letters Patentagainst the common order of the learned single Judge of this Courtmade in W.P.No.9770 of 2000 dated 09.03.2001. Petition filed under Article 226 of the Constitution ofIndia, praying for a writ of Certioriarified Mandamus or any otherappropriated writ or direction or order calling for the records inC.NO.3499/VDIS/TN-IV/97-98 from the office of the secondrespondent, and quash the order passed in C.NO.3499/VDIS/TN-IV/97-98 by the second respondent The Deputy Commissioner of Income Tax(Head quarters IV) office of the Commissioner of Income Tax, TamilNadu IV, Chennai and consequently direct the respondents to acceptthe declaration of the petitioner under the voluntary Disclosure ofIncome scheme 1997 and issue a certificate under Section 68(2) ofthe VDIS scheme and pass such further orders. https://hcservices.ecourts.gov.in/hcservices/ [Judgment of the Court was made by M.M.SUNDRESH, J] The Writ Appeal has been filed by the assessee beingaggrieved against the order of learned single Judge dismissing theWrit Petition filed challenging the order dated 18.06.1999 passedby the 2[nd] Respondent. 2. Brief facts of the case in nutshell are as follows:- A scheme was introduced by the Respondents in the year 1997by name Voluntary Disclosure of Income Scheme, 1997. Section 65 ofthe said scheme provides for a declaration to be made to theCommissioner by the assessee giving particulars. Section 67 of thesaid scheme provides for payment of interest payable by theassessee while filing a declaration without the payment of tax.Scheme provides for period of three months from the date ofdeclaration for payment of tax. Similarly, Section 68 of the saidAct provides for grant of certificate by the Commissioner on theapplication made by the Assessee. 3. The assessee a filed declaration under VoluntaryDisclosure of Income Scheme, 1997 on 29.12.1997 disclosing thetotal income of Rs.36,51,886/- for the assessment year 1992-93 to1996-97. Thereafter, the assessee paid the tax on 31.03.1998. TheCommissioner has rejected the declaration filed by the assessee onthe ground that under the Voluntary Disclosure of Income Scheme,1997, the tax payable along with interest must have been paidwithin three months from the date of the declaration. In pursuantto the said impugned communication, the assessee has sent a letterdated 14.7.1999 admitting the delay on his part and seeking tocondonation of delay. The said request was again rejected on20.07.1999. Challenging the order dated 18.06.1999 passed by theRespondents, assessee filed the Writ Petition. The learned singleJudge dismissed the Writ petition stating that in the absence ofany specific provisions under the scheme extending the period ofpayment of tax along with interest, the Court cannot exercise suchpower. The learned single Judge further held that the contentionof assessee that impugned order has not been passed by theCommissioner cannot be accepted, since a perusal of file wouldindicate that order has been passed by the Commissioner who is thecompetent authority under the scheme. Challenging the said orderof the learned single Judge, the present Writ Appeal is filed. 4. Issue of extension of scheme beyond the period mentionedunder the scheme has been considered by the Hon'ble Apex Court inthe judgment reported in 259 ITR 1 [Hemalatha Gargya v.Commissioner of Income-Tax and another]. The Hon'ble Apex Court inthe above said decision has observed as follows:- "We are of the view that the submissions of theRevenue must be accepted. A plain reading of theprovisions of the Scheme would show that the taxhttps://hcservices.ecourts.gov.in/hcservices/payable under the Scheme "shall be paid" within the time specified is the general rule provided insection 66, namely, payment prior to the making of adeclaration. The exception to this general rule hasbeen carved out by section 67(1) which allows adeclarant to file a declaration without paying thetax. This exception, however, is subject to twoconditions, viz., (1) the payment of tax within threemonths from the date of the filing of the declarationtogether with, (2) the payment of simple interest atthe rate of two per cent for every month or part of amonth. The period of interest is to commence fromthe date of filing the declaration and shall end withthe date of payment of tax. It may be noted thatunder section 67(1) not only must these twoconditions be fulfilled within the period of threemonths but proof of such payment must also be filedwithin the same period.The use of the word "shall" in a statute, ordinarilyspeaking, means that the statutory provision ismandatory. It is construed as such unless there issomething in the context in which the word is usedwhich would justify a departure from this meaning.There is nothing in the language of the provisionsof the scheme which would justify such a departure.On the other hand, the provisions of section 67(2)make it abundantly clear that if the declarant failsto pay the tax within the period of three months asspecified, the declaration filed shall be deemednever to have been made under the scheme. In otherwords, the consequences of non-compliance with theprovisions of section 67(1) relating to the paymenthave been provided. It is well-settled that whenconsequences of the failure to comply with theprescribed requirement is provided by the statuteitself, there can be no manner of doubt that suchstatutory requirement must be interpreted asmandatory [See Magbul Ahmad v. Onkar Pratap NarainSing, AIR 1935 PC 85, 88].Besides the scheme has conferred a benefit on thosewho had not disclosed their income earlier byaffording them protection against the possible legalconsequences of such non-disclosure under theprovisions of the Income-tax Act. Where theassessees seek to claim the benefit under thestatutory scheme they are bound to comply strictlywith the conditions under which the benefit isgranted. There is no scope for the application ofany equitable consideration when the statutoryprovisions of the scheme are stated in such plainlanguage.Seen from the angle of the designated authority,which is created under the Scheme, it is clear that https://hcservices.ecourts.gov.in/hcservices/ https://hcservices.ecourts.gov.in/hcservices/ the authority cannot act beyond the provisions ofthe Scheme itself. The power to accept paymentunder the Scheme has been prescribed by the statute.There is no scope for the Revenue authorities toimply a provision not specifically provided forwhich would in any way modify the explicit terms ofthe Scheme.In the decision in Smt.Laxmi Mittal's case [1999]238 ITR 97 (P & H), the High Court had relied upon acircular issued by the Central Board of Direct Taxesunder section 119(2)(b) of the Income-tax Act, 1961.The circular has not been brought on record.Assuming that the High Court's reproduction of thecontents is correct, all that the circular said wasthat the date for calculating interest would be 90days from the date of declaration and if the 90[th] dayhappens to be a bank holiday, payment on the 91[st] daybeing, the next working day, would be valid. Thiscircular certainly does not mean that the Board hadthereby empowered the Commissioner under section 119(2)(b) to extend the period for the making ofpayment on sufficient cause being shown. All thatthe circular does is state what is provided insection 10 of the General Clauses Act, 1897, andsection 4 of the Limitation Act, 1963. It is ageneral rule of interpretation and not an orderempowering the Commissioner. In any event, it isdoubtful whether the Board could have empowered theCommissioner to extend the time fixed by sections 66and 67 of the Scheme under section 119(2)(b) of theIncome-tax Act, 1961 given the wording of the Schemeand the fact that the Scheme does not form part ofthe Income-tax Act, 1961, at all." 5. The Hon'ble Apex Court has considered the Judgment ofthe Division Bench of this Court and over ruled the said Judgmentby holding that the scheme being beneficial scheme and assesseeavailing the benefit under the scheme is bound by the termscontained therein. In other words, the assessee seeking reliefunder the scheme cannot seek extension beyond the period mentionedin the said scheme. Hence, on consideration of the above legalposition, the contention of the learned counsel forappellant/assessee that delay being one day, the impugned orderwill have be set aside cannot be accepted. 6. It is a well settled principle of law that betweenequity and law, Courts will have to lean towards law rather thanequity. The Hon'ble Supreme Court in the Judgment reported in(2009) 9 SCC 92 [Vijay Narayan Thatte v. State of Maharastra] hasheld that when there is a conflict between law and equity, it isthe law which must prevail. When there is an express provisionhttps://hcservices.ecourts.gov.in/hcservices/providing for time limit within which the assessee concerned will have to avail the benefit, this Court exercising power underArticle 226 of Constitution of India cannot extend the same. It isalso to be seen that in a Writ of Certiorari, this Court in thenormal circumstances cannot go into the decision rendered by thecompetent authority, but can only consider as to whether thedecision making process is proper or not. have to avail the benefit, this Court exercising power underArticle 226 of Constitution of India cannot extend the same. It isalso to be seen that in a Writ of Certiorari, this Court in thenormal circumstances cannot go into the decision rendered by thecompetent authority, but can only consider as to whether thedecision making process is proper or not. 7. In so far as, the other contention of learned counselfor appellant is concerned, the said contention also cannot beaccepted. Learned single Judge has called for the File andverified that the order impugned has been passed by the 1[st]Respondent. The decision of the 1[st]Respondent has beencommunicated by the 2[nd] Respondent. It is further seen that aperusal of the order dated 18.6.1999 itself would show that theorder has been passed by the office of the Commissioner of Income-Tax, Tamilnadu-IV. It is well settled principle of law thatdecision is different from the communication of the said decision.In as much as a factual finding has been given by the learnedsingle Judge that the impugned order has been passed by the 1[st]Respondent and the said decision having been arrived at on aperusal of records, the contention of learned counsel for appellantthat the order impugned is one without jurisdiction also cannot beaccepted. 8. On consideration of the above said factual and legalposition, we are of the view that the Writ Appeal filed by theappellant is liable to be dismissed and accordingly, the same isdismissed. No costs. Sd/ Assistant Registrar Assistant Registrar/True Copy/ bbrTo 1. The Commissioner of Income Tax, Tamil Nadu – IV, 121, M.G.Road, Chennai-34. 2. The Dy. Commissioner of Income-tax, (Headquarters – IV) Office of the Commissioner of Income Tax, 121, M.G.Road, Chennai-34. + One C.C to Mr.K.Subramanian, Advocate SR.NO.8326 + One C.C to Mr.N.B.N.Swamy, Advocate SR.NO.8165