IN THE HIGH COURT OF KERALA AT ERNAKULAM
OP No. 13513 of 1998(H)
1. ISSAC C.ROY (MINOR)
... Petitioner
Vs
1. THE COMMR. OF INCOME TAX
... Respondent
For Petitioner :SRI.TKM.UNNITHAN
For Respondent :SRI.P.K.RAVINDRANATHA MENON (SR.)
The Hon'ble MR. Justice S.SIRI JAGAN
Dated :08/01/2007
O R D E R
S. Siri Jagan, J.
=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
O.P. No. 13513 of 1998
=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
Dated this, the 8th January, 2007.
J U D G M E N T
Petitioners 3 and 4 are father and mother respectively of
petitioners 1 and 2 who are minors. These minors also derive income
taxable under the Income Tax Act. Apparently, some income so
derived by the minors were not disclosed in the returns for the
relevant period. Government brought into force by the Finance Act,
1997, the Voluntary Disclosure of Income Scheme, 1997 (for short
‘the Scheme’) by which on declaration of income, which were earlier
not disclosed, no penalty would be attracted and the assessee was
allowed to pay the tax at 30% of the income disclosed. The 3rd
petitioner-father filed a declaration under the Scheme on behalf of the
minors on 30-12-1997. On 31-12-1997, the last date fixed for filing
return under the Scheme expired. The tax due on the income was
also paid. Subsequently, the return was rejected as invalid on the
ground that a minor was not entitled to file a return under the
Scheme subsequent to the assessment year 1993-1994. In the above
circumstances, the 4th petitioner-mother filed a return including the
said income in her return and sought for adjustment of the tax paid at
the time of filing return under the Scheme. This was rejected on the
ground that as per the Scheme, tax once paid would not be refunded.
The request of the 4th petitioner to adjust the tax paid against the tax
payable under her return was also rejected by Ext. P14 order. This is
under challenge in this original petition.
The contention of the petitioners is that since the intention of
the petitioners was bona fide and the mistake occurred on account of
the circumstances beyond the control of the petitioners although they
may not be entitled to the benefit of the Scheme, certainly, the
respondents cannot deny the benefit of adjustment of the amount
already paid towards tax payable on the 4th petitioner’s return. The
OP. 13513/1998. -: 2 :-
petitioners rely on a decision of the Supreme Court in Hemalatha
Gargya v. Commissioner of Income-tax and another, reported in
[2003] 259 ITR 1. In that case, return under the Scheme was delayed
by one day. The tax paid pursuant thereto was refused to be adjusted
or refunded to the assessee. Although, in that decision the Supreme
Court denied the assessee the benefit of the Scheme, it held thus:
“As a consequence, in our view, the appeals preferred by the
assessees must be and are hereby dismissed whereas the appeals
preferred by the Revenue authorities must be and are hereby
allowed. However, having held that the assessees are not entitled to
the benefit of the Scheme since the payments made by them were
not in terms of the Scheme, we direct the Revenue authorities to
refund or adjust the amounts already deposited by the assessees in
purported compliance with the provisions of the Scheme to the
concerned assessee in accordance with law. All the appeals are
accordingly disposed of without any order as to costs.”
I am of opinion that the said direction of the Supreme Court squarely
applies to the petitioners’ case.
In the above circumstances, I direct the respondents to adjust
the tax paid by the petitioners at the time of filing the return under
the Voluntary Disclosure of Income Scheme, 1997 in respect of the
pending demands from the petitioners under the Income-tax Act. The
original petition is allowed as above.
Sd/- S. Siri Jagan, Judge. Tds/