1 AFR HIGH COURT OF CHHATTISGARH, BILASPUR Writ Petition No.1825 of 2004 Nawal Kishore Agrawal, S/o Jai Prakash Agrawal, R/o 350, Samta Colony, Raipur (C.G.) ---- Petitioner Versus 1. Commissioner of Income Tax, Raipur (C.G.) 2. Union of India, Through Secretary, Ministry of Finance, North Block, New Delhi 3. Central Board of Direct Taxes, Through Secretary, New Delhi 4. Assistant Commissioner of Income Tax, Raipur (C.G.) 5. Income Tax Officer Circle 1(3), Raipur (C.G.) Respondents For Petitioner: Mr. Siddharth Dubey, Advocate. For Respondents: Mrs. Naushina Ali, Advocate. Hon'ble Shri Justice Sanjay K. Agrawal Order On Board 08/11/2017 1. petitioner made declaration of capital gains etc., under Voluntary Disclosure of Income Scheme, 1997 (for short, 'VDIS') before income tax authorities and also paid requisite tax, but his declaration of VDIS was not accepted and it was rejected on ground that petitioner was not holding assets on date of declaration and it was declared invalid. Calling in question, legality, validity and correctness of that order, this writ petition has been preferred by petitioner holding that his declaration was strictly in accordance with VDIS. 2. Return has been filed opposing writ petition stating that since petitioner was not holding assets on date of declaration 2 therefore, it has been rightly declared invalid and writ petition as framed and filed is liable to be dismissed. 3. Learned counsel for petitioner would submit that petitioner had already sold gold and silver articles and utensils and therefore he has submitted computation of capital gains and thus, question of holding property on date of making declaration does not arise, as he had submitted capital gains as on date of declaration and there was no such condition in VDIS to hold property on date of declaration. Therefore, holding declaration to be invalid is without jurisdiction and without authority of law, as there is no such condition precedent enumerated in VDIS for holding property on date of declaration. 4. Learned counsel for respondents would support impugned order and would submit that in clarification issued by Central Board of Direct Taxes (CBDT) it has clearly been stated that ... where declarants have declared jewellery but have also claimed that they has sold these prior to date of declaration. According to scheme, declarant has to declare asset that he holds at time of making declaration . Therefore, petitioner's declaration was contrary to provisions of Scheme and it has rightly been declared invalid by income tax authorities. 5. I have heard learned counsel for parties and considered their rival submissions and also perused entire material available on record with utmost circumspection. 6. Voluntary Disclosure of Income Scheme, 1997 came into force with effect from 9-6-1997. Clause 64 (1) (b) of said Scheme states as under: - 3 64. (1) Subject to provisions of this Scheme, where any person makes, on or after date of commencement of this Scheme but on or before 31st day of December, 1997, declaration in accordance with provisions of section 65 in respect of any income chargeable to tax under Income-tax Act for any assessment year ....... (b) which he has failed to disclose in return of income furnished by him under Income-tax Act before date of commencement of this Scheme; ....... then, notwithstanding anything contained in Income- tax Act or in any Finance Act, income-tax shall be charged in respect of income so declared (such income being hereinafter referred to as voluntarily disclosed income) at rates specified hereunder, namely: ....... 7. careful perusal of aforesaid clause would show that disclosure can be made if assessee has failed to disclose in return of income furnished by him under Income-tax Act before date of commencement of this Scheme. By virtue of clause 68 of VDIS, voluntarily disclosed income is not to be included in total income. petitioner has not disclosed any gold or silver articles under above Scheme, but has submitted computation of capital gains in which he has stated that he had already sold gold and silver articles and utensils, as such, it is disclosure of amount received on account of sale of those assets and computation of capital gains has been filed while making declaration under Section 65 of Finance Act, 1997, whereas CBDT clarification dated 16-10-1997 provides as under: - WHERE DECLARED JEWELLERY TO CLAIMED TO HAVE BEEN SOLD : DO NO 3965/M/INV.-VDIS/97, DATED 16-10-1997 Instances have come to notice where declarants have declared jewellery but have also claimed that they has sold these prior to date of declaration. According to 4 scheme, declarant has to declare asset that he holds at time of making declaration. Therefore, such declarations are contrary to provisions of Scheme. Such cases of declarations should not be accepted. Necessary instructions may be issued to Commissioners. 8. careful perusal of aforesaid clarification would show that it relates to declaration of voluntarily disclosed income claiming that jewellery has already been sold prior to date of declaration. In instant case, admittedly and undisputedly, petitioner has not declared any jewellery towards undisclosed income, whereas he has stated that he had already sold jewellery and computation sheet of capital gains has been filed, therefore, said clarification would not be applicable to facts of present case. There is no enabling provision in VDIS, 1997 directing holding of assets included in statement of capital gains on date of declaration. Therefore, reason assigned by Assistant Commissioner of Income Tax rejecting VDIS by petitioner as invalid, is contrary to law and also contrary to provisions of their own VDIS. Accordingly, it is quashed. competent authority / respondents are directed to consider and accept declaration as submitted by petitioner under VDIS, in accordance with law. Consequently, certificate, if any, be issued to petitioner. It is made clear that petitioner has confined this writ petition to issuance of certificate under VDIS and Court has not commented on reassessment order dated 28-3-2003 (Annexure P-10). 9. writ petition is allowed to extent indicated herein-above. No order as to cost(s). Sd/- (Sanjay K. Agrawal) Judge Soma Nawal Kishore Agrawal v. Commissioner of Income-tax, Raipur/ Union of India, New Delhi/ Central Board of Direct Taxes, New Delhi/ Assistant Commissioner of Income-tax, Raipur/ Income-tax Officer Circle 1(3), Raipur