JUDGMENT
A.R. Dave, J.
1. The grievance which the petitioner company has ventilated in the present petition is with regard to not granting of a certificate under the provisions of s. 68(2) of the Finance Act, 1997, in respect of particulars of the voluntarily disclosed income and the amount of income-tax paid in respect thereof by the petitioner-assessee.
2. The facts in brief giving rise to the present petition are as under :
3. The petitioner had made a declaration on 30th December, 1997 to the effect that it was having an undisclosed income which it wanted to disclose under a scheme known as Voluntary Disclosure of Income Scheme of 1997 (VDIS). As per the provisions of s. 67 of the Finance Act, 1997, the petitioner had to make payment of tax payable on the amount of income disclosed within a period of 3 months from the date of filing of the declaration. The case of the petitioner is that though the tax payable under the said scheme was paid on 30th March, 1998 and the petitioner company was entitled to a certificate under the provisions of s. 68(2) of the Finance Act, 1997, from the respondent, the petitioner company was not granted the certificate.
4. In the above-referred circumstances, the petitioner has been constrained to approach this Court with a prayer that the respondent be directed to grant a certificate under the provisions of s. 68(2) of the Finance Act, 1997.
5. Learned advocate appearing for the petitioner has submitted that the respondent has not issued the certificate on the ground that the tax was paid on the 91st day of the filing of the declaration. It has been submitted by him that the declaration was filed on 10th December, 1997 and the tax was paid on 30th March, 1998. It has been submitted by the learned advocate that the tax has been duly paid within a period of 3 months as provided under s. 67(1) of the Act and, therefore, the reason given by the respondent that the amount was paid on 91st day is absolutely irrelevant.
6. The learned advocate has relied upon Circular No. 755 issued by the CBDT dt. 25th July, 1997 [published in (1997) 226 ITR (St) 33] wherein at answer to question No. 48, the aspect with regard to the period within which the tax is to be paid has been explained. Question No. 48 and its answer referred to in the said circular are reproduced hereinbelow.
“Question No. 48 : If disclosure is made on 31st December, 1997, would the declaration be held to be valid if total tax payment is made by 31st March, 1998?
Answer : Yes.”
7. The learned advocate has submitted that if we compare the illustration given hereinabove by the CBDT in the circular referred in hereinabove with the same of the petitioner, it is very clear that the petitioner ought to have been issued a certificate under the provisions of s. 68(2) of the Act.
8. On the other hand, the learned advocate appearing for the respondent Department has submitted that the petitioner is not entitled to certificate under the provisions of s. 68(2) of the Act for the reason that the petitioner had not deposited the amount of tax within 90 days but the tax was paid on the 91st day as stated in para 2 of the affidavit-in-reply filed by the respondent. He has also relied upon a circular issued by the CBDT dt. 3rd September, 1998, and more particularly cls. II and IV of the said circular and has submitted that the petitioner ought to have deposited the amount of tax within 90 days and the cheque deposited by the petitioner ought to have been encashed within 90 days from the date of filing of the declaration. It has been submitted by the learned advocate appearing for the respondent that the cheque was encashed on 3rd April, 1998, and, therefore, the payment was not made as per the provisions of the said circular within 90 days from 30th December, 1997, that is the day on which the declaration was filed by the petitioner and, therefore, the petitioner was rightly not given a certificate under s. 68(2) of the Finance Act, 1997.
9. We have heard the learned advocates and have also perused circulars referred to hereinabove. Upon perusal of the record, it is not in dispute that the declaration was filed by the petitioner on 30th December, 1997 and the cheque was delivered by the petitioner on 30th March, 1998. It is also not in dispute that payment by cheque is an accepted mode of payment.
10. It is very clear from the language of s. 67(1) of the Act that the declarant has to pay the tax within 3 months from the date of filing of the declaration. As the section itself is very clear that the declarant has to make payment of tax within 3 months, we fail to understand as to how the Department can insist that the period should be counted in days and not by months and urge that tax be paid within 90 days. Any circular making any provision contrary to the provision of s. 67(1) of the Act cannot hold the field and therefore we do not agree with the submission of the learned advocate appearing for the respondent that the amount of tax ought to have been paid within 90 days. Circular No. 755 issued by the CBDT and referred to hereinabove, which is clarificatory in nature, elucidates the position. Looking to the said illustration, one cannot say that the petitioner assessee has not made payment of tax within the period prescribed. In the circumstances, we are of the view that the amount of tax was required to be paid within 3 months from the date of the declaration and, therefore, the respondent cannot insist upon payment of tax within 90 days as submitted by the learned advocate for the respondent. We may also observe that it would also not be proper on the part of the respondent to act in contravention of the illustration given in the circular dt. 25th July, 1997 issued by the CBDT which clarifies the legal position by giving an illustration so as to enable the concerned persons to take an appropriate action in pursuance of the provisions of s. 67(1) of the Finance Act, 1997.
11. Submission made by the learned advocate for the respondent that the cheque ought to have been encashed within 90 days is also not well-founded. What is relevant here is payment and not encashment of the cheque. It is a settled legal position that in case of payment by cheque, the payment is deemed to have been made on the date of delivery of the cheque and not on the date of encashment when the cheque is honoured. In the instant case, it is not in dispute that the cheque was honoured. Though the cheque was encashed on 3rd April, 1998, the payment must be deemed to have been made on 30th March, 1998 when challan dt. 30th March, 1998 was submitted by the petitioner to the respondent along with cheque. We are therefore of the view that payment of tax was made within the period prescribed. We are supported by a judgment delivered by the Hon’ble Supreme Court in the case of CIT vs. Ogale Glass Works Ltd. (1954) 25 ITR 529 (Bom), which lays down law to the effect that when the cheque is not dishonoured but is encashed, the payment relates back to the date of the receipt of the cheque and in law, the date of payment would be the date of the delivery of the cheque.
12. In view of the above-referred clear position, we are of the view that the petitioner has been wrongly denied the certificate under provisions of s. 68(2) of the Finance Act, 1997, and, therefore, we direct the respondent to issue necessary certificate under the provisions of s. 68(2) of the said Act as expeditiously as possible. The petition is allowed accordingly. Rule is made absolute with no order as to costs.