IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 09.02.2010 CORAM : THE HONOURABLE Mrs.JUSTICE R.BANUMATHI and THE HONOURABLE Mr.JUSTICE M.M.SUNDRESH Writ Appeal No1084 of 2001 M/s.Tiruvengadam Investments (P) Ltd., represented by its Director, "Khivraj Estates" III Floor 624, 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 Patent against the common order of the learned single Judge of this Court made in W.P.No.9770 of 2000 dated 09.03.2001. WP. 9770/2000:- (Prayer) Petition filed under Article 226 of the Constitution of India, praying for a writ of Certioriarified Mandamus or any other appropriated writ or direction or order calling for the records in C.NO.3499/VDIS/TN-IV/97-98 from the office of the second respondent, 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, Tamil Nadu IV, Chennai and consequently direct the respondents to accept the declaration of the petitioner under the voluntary Disclosure of Income scheme 1997 and issue a certificate under Section 68(2) of the VDIS scheme and pass such further orders. For Appellant : Mr.N.B.N.Swamy For Respondents : Mr.K.Subramaniam For RR1 & 2 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 being aggrieved against the order of learned single Judge dismissing the Writ Petition filed challenging the order dated 18.06.1999 passed by the 2nd Respondent. 2. Brief facts of the case in nutshell are as follows:- A scheme was introduced by the Respondents in the year 1997 by name Voluntary Disclosure of Income Scheme, 1997. Section 65 of the said scheme provides for a declaration to be made to the Commissioner by the assessee giving particulars. Section 67 of the said scheme provides for payment of interest payable by the assessee while filing a declaration without the payment of tax. Scheme provides for period of three months from the date of declaration for payment of tax. Similarly, Section 68 of the said Act provides for grant of certificate by the Commissioner on the application made by the Assessee. 3. The assessee a filed declaration under Voluntary Disclosure of Income Scheme, 1997 on 29.12.1997 disclosing the total income of Rs.36,51,886/- for the assessment year 1992-93 to 1996-97. Thereafter, the assessee paid the tax on 31.03.1998. The Commissioner has rejected the declaration filed by the assessee on the ground that under the Voluntary Disclosure of Income Scheme, 1997, the tax payable along with interest must have been paid within three months from the date of the declaration. In pursuant to the said impugned communication, the assessee has sent a letter dated 14.7.1999 admitting the delay on his part and seeking to condonation of delay. The said request was again rejected on 20.07.1999. Challenging the order dated 18.06.1999 passed by the Respondents, assessee filed the Writ Petition. The learned single Judge dismissed the Writ petition stating that in the absence of any specific provisions under the scheme extending the period of payment of tax along with interest, the Court cannot exercise such power. The learned single Judge further held that the contention of assessee that impugned order has not been passed by the Commissioner cannot be accepted, since a perusal of file would indicate that order has been passed by the Commissioner who is the competent authority under the scheme. Challenging the said order of the learned single Judge, the present Writ Appeal is filed. 4. Issue of extension of scheme beyond the period mentioned under the scheme has been considered by the Hon'ble Apex Court in the judgment reported in 259 ITR 1 [Hemalatha Gargya v. Commissioner of Income-Tax and another]. The Hon'ble Apex Court in the above said decision has observed as follows:- "We are of the view that the submissions of the Revenue must be accepted. A plain reading of the provisions of the Scheme would show that the tax payable under the Scheme "shall be paid" within the https://hcservices.ecourts.gov.in/hcservices/ time specified is the general rule provided in section 66, namely, payment prior to the making of a declaration. The exception to this general rule has been carved out by section 67(1) which allows a declarant to file a declaration without paying the tax. This exception, however, is subject to two conditions, viz., (1) the payment of tax within three months from the date of the filing of the declaration together with, (2) the payment of simple interest at the rate of two per cent for every month or part of a month. The period of interest is to commence from the date of filing the declaration and shall end with the date of payment of tax. It may be noted that under section 67(1) not only must these two conditions be fulfilled within the period of three months but proof of such payment must also be filed within the same period. The use of the word "shall" in a statute, ordinarily speaking, means that the statutory provision is mandatory. It is construed as such unless there is something in the context in which the word is used which would justify a departure from this meaning. There is nothing in the language of the provisions of 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 fails to pay the tax within the period of three months as specified, the declaration filed shall be deemed never to have been made under the scheme. In other words, the consequences of non-compliance with the provisions of section 67(1) relating to the payment have been provided. It is well-settled that when consequences of the failure to comply with the prescribed requirement is provided by the statute itself, there can be no manner of doubt that such statutory requirement must be interpreted as mandatory [See Magbul Ahmad v. Onkar Pratap Narain Sing, AIR 1935 PC 85, 88]. Besides the scheme has conferred a benefit on those who had not disclosed their income earlier by affording them protection against the possible legal consequences of such non-disclosure under the provisions of the Income-tax Act. Where the assessees seek to claim the benefit under the statutory scheme they are bound to comply strictly with the conditions under which the benefit is granted. There is no scope for the application of any equitable consideration when the statutory provisions of the scheme are stated in such plain language. Seen from the angle of the designated authority, which is created under the Scheme, it is clear that https://hcservices.ecourts.gov.in/hcservices/ the authority cannot act beyond the provisions of the Scheme itself. The power to accept payment under the Scheme has been prescribed by the statute. There is no scope for the Revenue authorities to imply a provision not specifically provided for which would in any way modify the explicit terms of the Scheme. In the decision in Smt.Laxmi Mittal's case [1999] 238 ITR 97 (P & H), the High Court had relied upon a circular issued by the Central Board of Direct Taxes under 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 the contents is correct, all that the circular said was that the date for calculating interest would be 90 days from the date of declaration and if the 90th day happens to be a bank holiday, payment on the 91st day being, the next working day, would be valid. This circular certainly does not mean that the Board had thereby empowered the Commissioner under section 119 (2)(b) to extend the period for the making of payment on sufficient cause being shown. All that the circular does is state what is provided in section 10 of the General Clauses Act, 1897, and section 4 of the Limitation Act, 1963. It is a general rule of interpretation and not an order empowering the Commissioner. In any event, it is doubtful whether the Board could have empowered the Commissioner to extend the time fixed by sections 66 and 67 of the Scheme under section 119(2)(b) of the Income-tax Act, 1961 given the wording of the Scheme and the fact that the Scheme does not form part of the Income-tax Act, 1961, at all." 5. The Hon'ble Apex Court has considered the Judgment of the Division Bench of this Court and over ruled the said Judgment by holding that the scheme being beneficial scheme and assessee availing the benefit under the scheme is bound by the terms contained therein. In other words, the assessee seeking relief under the scheme cannot seek extension beyond the period mentioned in the said scheme. Hence, on consideration of the above legal position, the contention of the learned counsel for appellant/assessee that delay being one day, the impugned order will have be set aside cannot be accepted. 6. It is a well settled principle of law that between equity and law, Courts will have to lean towards law rather than equity. The Hon'ble Supreme Court in the Judgment reported in (2009) 9 SCC 92 [Vijay Narayan Thatte v. State of Maharastra] has held that when there is a conflict between law and equity, it is the law which must prevail. When there is an express provision providing for time limit within which the assessee concerned will https://hcservices.ecourts.gov.in/hcservices/ have to avail the benefit, this Court exercising power under Article 226 of Constitution of India cannot extend the same. It is also to be seen that in a Writ of Certiorari, this Court in the normal circumstances cannot go into the decision rendered by the competent authority, but can only consider as to whether the decision making process is proper or not. 7. In so far as, the other contention of learned counsel for appellant is concerned, the said contention also cannot be accepted. Learned single Judge has called for the File and verified that the order impugned has been passed by the 1st Respondent. The decision of the 1st Respondent has been communicated by the 2nd Respondent. It is further seen that a perusal of the order dated 18.6.1999 itself would show that the order has been passed by the office of the Commissioner of Income- Tax, Tamilnadu-IV. It is well settled principle of law that decision is different from the communication of the said decision. In as much as a factual finding has been given by the learned single Judge that the impugned order has been passed by the 1st Respondent and the said decision having been arrived at on a perusal of records, the contention of learned counsel for appellant that the order impugned is one without jurisdiction also cannot be accepted. 8. On consideration of the above said factual and legal position, we are of the view that the Writ Appeal filed by the appellant is liable to be dismissed and accordingly, the same is dismissed. No costs. Sd/ Assistant Registrar /True Copy/ Sub Assistant Registrar bbr To 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 W.A.No.1084 of 2001 GS(CO) https://hcservices.ecourts.gov.in/hcservices/