Case: Hemalatha Gargya Vs. Commnr. Of Income Tax, A.P.

itself, there can be no manner of doubt that such statutory requirement must be interpreted as mandatory (See: Maqbool Ahmad and Ors. v. Onkar Pratap Narayan Singh AIR 1935 PC, 85, 88). 10. 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 seeks 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.11. Seen from the angle of the Designated authority, which is created under the Scheme, it clear that 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. 12. In the decision in Laxmi Mittals case 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 Courts reproduction of the contents is incorrect, 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 for 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. 13. In none of the decisions of the High Courts which have held that the time prescribed under Section 67(1) was not rigid has any legal basis been relied on, the decision to extend the time appears to have been arrived at on consideration of equity. This approach, in our opinion, was incorrect, as the court had no power to act beyond the terms of the Statutory Scheme under which benefits had been granted to the assessee. By so holding we make it clear we do not intend to reopen those decisions which have become final in favour of the assessees. It may also be noted that in one of such decisions, the Revenue had sought to prefer an appeal before the Court by way of a special leave petition which was dismissed in limine. It needs hardly to be stated that such dismissal would not operate as confirmation of the reasoning in the decision sought to be appealed against, nor does such dismissal by itself operate as an argument in favour of the assessee and against the Revenue. 14. The decision of this Court in Union of India and Ors. v. Kaumudini Narayan Dalal and Anr. (Supra) and Union of India v. Satish Panalal Shah (Supra) do not, as contended by the assessees, hold that the Revenue can never challenge an interpretation which they have not chosen to do so earlier. First, it appears to us that the principle appears to be limited to decisions of the jurisdictional High Court. Additionally, the decisions make it clear that given "just cause", the Department could challenge the interpretation subsequently. We accept the submission of the Revenue that in this case, decisions of other High Courts holding to the contrary as well as the subsequent conflicting decision of the Punjab and Haryana High Court itself would come within the phrase "just cause". 15. The submissions of the assessees that this Court can dilute the rigour of Section 67(2) on the basis of the ratio in M/s. Hindustan Steel Ltd. v. State of Orissa 1969 (2) SCC 627 is unacceptable. That was a case which dealt with the imposition of a minimum penalty for failure to carry out a statutory obligation. The Court held that such an order imposing penalty is the result of a quasi criminal proceeding and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of the law or acted in conscious disregard of its obligation. Because of its qasi-criminal character, the Court held that the element of mens rea or bona fides was to be imported which would justify the authority who was competent to impose the penalty to refuse to impose penalty even when the statute provided for a fixed minimum penalty on proof of default. 16. There is no question of imposition of penalty under the Scheme. What has been prescribed under Section. 67(2) is merely the consequence of the failure to comply with Section 67(1). There is as such no question of importing the doctrine of mens rea or exercising any discretion contrary to the provisions of Section 67(2).17. The submission of the assessees that this Court should not interfere under Article 136 of the Constitution in those cases where the Revenue is in appeal is unacceptable because the issue is purely one of law and given the divergent opinions of the different High Courts, it is an appropriate case where this Court should interfere and settle the difference finally.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]8. 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 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 2% 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.9. The use of the word "shall" be 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 the 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 state itself, there can be no manner of doubt that such statutory requirement must be interpreted asBesides 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 seeks 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.11. Seen from the angle of the Designated authority, which is created under the Scheme, it clear that 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 none of the decisions of the High Courts which have held that the time prescribed under Section 67(1) was not rigid has any legal basis been relied on, the decision to extend the time appears to have been arrived at on consideration of equity. This approach, in our opinion, was incorrect, as the court had no power to act beyond the terms of the Statutory Scheme under which benefits had been granted to the assessee. By so holding we make it clear we do not intend to reopen those decisions which have become final in favour of the assessees. It may also be noted that in one of such decisions, the Revenue had sought to prefer an appeal before the Court by way of a special leave petition which was dismissed in limine. It needs hardly to be stated that such dismissal would not operate as confirmation of the reasoning in the decision sought to be appealed against, nor does such dismissal by itself operate as an argument in favour of the assessee and against the Revenue.There is no question of imposition of penalty under the Scheme. What has been prescribed under Section. 67(2) is merely the consequence of the failure to comply with Section 67(1). There is as such no question of importing the doctrine of mens rea or exercising any discretion contrary to the provisions of Section 67(2).17. The submission of the assessees that this Court should not interfere under Article 136 of the Constitution in those cases where the Revenue is in appeal is unacceptable because the issue is purely one of law and given the divergent opinions of the different High Courts, it is an appropriate case where this Court should interfere and settle the difference finally.