P.N. KHANNA, J.

( 1 ) THE question that has been raised in this petition is whether the Income-tax

officer can reject the explanation of an assessee in respect of any sums found

credited in his books, on the ground that the nature and source of the said sum in

the hands of the depositors in whose names the credit stands, has not been

satisfactorily explained merely by the said depositor, having declared it as his

income in pursuance to the voluntary disclosure scheme set out in Finance (No. 2)

Act of 1965 (Actno. XV of 1965 ).

( 2 ) THE petition has been filed by three petitioners. Messrs Jain Brothers, a

partnership firm, is petitioner No. 3 and consists of two partners, Rattan Lal,

petitioner No. 1, and Khazanchi Lal, petitioner No- 2. The firm is being assessed in

the status of a registered firm under section 184 of the Income-tax Act, 1961,

herein called the 1961 Act", while petitioners Nos. I and 2 are being assessed in the

status of individuals. The Income-tax officer has been impleaded as respondent No.

I, while the Additional Commissioner of Income-tax is respondent No. 2. The

Commissioner of Income-tax is respondent No. 3, and the Chairman, Central Board

of Direct Taxes is respondent No. 4.

( 3 ) DURING the assessment year ending on March 31, 1967. the petitioners filed

returns of their income under section 139 of the 1961 Act. The Income-tax officer,

respondent No. 1, completed the assessments under section 143 of the 1961 Act

and while framing the assessment of petitioner No. 3 added back a sum of Rs.

30,000. 00 as income from undisclosed sources. This sum related to three credits

standing in the firms books in the names of Narinder Kumar Jain, son of Rattan Lal,

petitioner No. 1 (Rs. 10,000. 00), Smt. Dil Bahari Jain, wife of Rattan Lal, (Rs.

15,000. 00) and Smt. Chandravati Jain, wife of Khazanchi Lal, petitioner No. 2 (Rs.

5,000. 00), as loans advanced to the firm. On being asked the petitioner explained

that these amounts belonged to the aforesaid three creditors or depositors, which

had been duly declared by them under the voluntary disclosure scheme under the

Finance Act and income-tax had been paid in respect thereof and that these

amounts were later deposited by the aforesaid depositors with respondent No. 3.

The Income-tax officer was, however, of the opinion that the aforesaid depositors

were not in a position to earn the said amounts and that the purpose of the

voluntary disclosure scheme was to enable the persons who had earned some

income prior to March 31, 1964, but had not paid the tax thereon to come forward

to get the tax liabilities settled. The immunity under section 24 of the Finance Act

was conferred on the declarants only. If it was found that the income was declared

by a person to whom it did not belong, there was nothing, according to the Incometax

Officer, to prevent it being taxed in the hands of the person to whom it actually

belonged. The onus, according to him, rested entirely on the assessee under section

68 of the 1961 Act. The explanation offered by the petitioners in this case was,

therefore, held to be unsatisfactory and the credits standing in the aforesaid names

were treated as unexplained cash credits and were charged to tax as income of the

firm (petitioner No. 3) from undisclosed sources. Petitioner No. 3 filed a revision

application under section 264 of the 1961 Act against the order of the Income-tax

Officer. The Additional Commissioner of Income-tax Delhi, however, agreed with the

Income-tax Officer and held that the disclosures granted immunity from further

taxation only to the persons who disclosed the income. He was of the opinion that

the credits represented concealed income of the petitioner firm and rejected the

revision application. It is under these circumstances that the petitioners have filed

this writ petition praying for the issue of a writ, order or direction in the nature of

mandamus or certiorari, inter alia, setting aside the aforesaid additions to the total

incomes of the firm. petitioner No. 3, as its income from undisclosed sources and in

the alternative declaring that the said sum was taxable, if at all, in the assessment

year prior to March 31, 1964 and not in the assessment year 1967-68.

( 4 ) MR. R. H. Dhebar, the learned counsel appearing on behalf of the respondents,

raised two preliminary objections. Firstly, that the order of the Additional

Commissioner of Income-tax, respondent No. 2, was an order based on appreciation

of evidence and was final, the determination made by him was a finding of fact, to

reopen which this court will not exercise its jurisdiction under Article 226 of the

Constitution. Secondly, that the petitioners had an alternate remedy open to them

by going in appeal to the Appellate Assistant Commissioner against the order of the

Income-tax Officer and thereafter before the Tribunal. The petitioners could then in

an appropriate case ask for a reference to this court. The petitioners had by-passed

the said statutory remedies available to them and had approached this court by first

going in revision before the Commissioner; which they should not be allowed to do.

Both the contentions of the learned counsel, however, are not tenable. In the first

place, it is not a question of reopening a finding of fact recorded by the Income-tax

Officer. The questions involved are whether the finding of the Income-tax Officer is

supported by any evidence and whether a declaration made and tax paid by a

declarant under the voluntary disclosure scheme as envisaged in the Finance Act

can be questioned to ascertain the nature and source of the sum so declared by the

declarant as its owner, for the purpose of determining if it was still in the nature of

an unexplained cash credit, appearing in the books of a third party. These are

substantial questions of law and by interpreting them wrongly the Income-tax

Officer cannot assume jurisdiction which may not vest in him. There is, therefore,

nothing to prevent this court from examining these questions in exercise of its

jurisdiction under Article 226 of the Constitution. The second objection is equally

devoid of force. inasmuch as a revision to the Commissioner is a remedy provided

under the 1961 Act itself. It cannot be said that this remedy was pursued in a wrong

forum which did not have jurisdiction. There is no other remedy under the said Act,

which the petitioners can avail of as against the order in revision. The petitioner,

therefore, cannot be debarred from invoking the aid of Article 226 of the

Constitution.

( 5 ) COMING to the merits, Mr. G. C. Sharma for the petitioner contended that the

intial onus which lies on the assessee under section 68 of the 1961 Act to give an

explanation for any sum found credited in his books was duly discharged, in this

case, when the petitioners pointed out that the amount so disclosed belonged to

persons, who had disclosed it in pursuance to the voluntary disclosure scheme set

out in the Finance Act. This, according to him, was the end of the matter and the

Income-tax Officer had no jurisdiction to question the veracity of the said disclosure.

According to him, section 24 of the Finance Act put a seal of finality on the

disclosure so made and provided a conclusive proof of the ownership of the amount

so declared. This amount is required to be charged to income-tax as if it were the

total income of the declarant notwithstanding anything contained in the Indian

Income-tax Act, 1922, herein called "the 1922 Act", or the 1961 Act. The tax

payable on that amount, said the learned counsel, when paid, was not refundable in

any circumstances and the declarant was not entitled to reopen any assessment or

reassessment made under the Act, nor could he claim any set off or relief in appeal,

reference or revision or in other proceedings in relation to any such assessment or

reassessment such being the case, Mr. Sharma contended, the Income-tax Officer,

while dealing with the case of another assessee in whose books he may find such

sum credited in the name of the person who had made the declaration under

section 24 of the Finance Act, cannot enter into an investigation to determine the

nature and source of the said sum in the hands of such person and come to a

finding that the sum so declared as his, was actually not his. The Income-tax Officer

in the present case having reopened and questioned the veracity of the declarations

made by the depositors under the Finance Act and having treated the said

voluntarily disclosed amounts as the income of the assessee firm, petitioner No. 3,

was acting beyond jurisdiction and the petitioners in the circumstances, were

entitled to the reliefs which they had prayed for in the present petition.

( 6 ) MR. Dhebar, on the other hand, contended that the voluntary disclosure

scheme gave a limited immunity to the declarant and the benefits which it gave to

him were restricted to him alone. The Income-tax authorities were, therefore,

entitled to determine whether the amount disclosed was or was not the income of

the declarant, while dealing with the case of another assessee under section 68 of

the 1961 Act. The legal fiction created by section 24 of the Finance Act was

restricted to the voluntary disclosure scheme itself. The protection enjoyed by the

declarant under that scheme extended only to the amounts so declared being not

liable to be added, in any assessment, in the income of the declarant. There was no

absolute finality attached to the declaration, especially when the nature and source

of the sum declared was being determined for the purpose of its inclusion in the

income of an assessce other than the declarant. For, if the legislature intended to

impart such a finality, it would have so provided in the Finance Act itself, which it

had not done. Mr. Dhebar also submitted that there was no double taxation involved

in the scheme as it was not the same tax levied on the same person and even if any

double taxation was involved the same was permissible as the statute had not

prohibited it. There was, therefore, nothing, according to him, which prevented the

Income-tax Officer from investigating into the nature and source of the sums found

credited in the books of the petitioners and to reject their explanation to the effect

that the sums belonged to persons who had made declarations about them under

the Finance Act.

( 7 ) IN order to better appreciate the respective contentions of the counsel, it is

necessary first to examine the relevant provisions of section 24 of the Finance Act,

which constituted the scheme under which the voluntary disclosures of income were

made by the depositors.

( 8 ) SECTION 24 of the Finance Act has 16 sub-sections. Sub-section (1) provides

that where any person makes on or after August 19, 1965 and before April 1, 1966

a declaration in accordance with sub-section (2) in respect of the amount

representing income chargeable to tax under the 1922 Act or the 1961 Act, for any

assessment year commencing on or before April 1, 1964 for which he has failed to

furnish the return within time or which he has failed to disclose in his return or

which has escaped assessment by reason of his omission or failure aforesaid, he

shall, notwithstanding anything contained in the said Acts, be charged to income-tax

in accordance with sub-section (3) in respect of the amounts so declared as reduced

by any amount specified in any order made under sub-sections (4) or (6 ). Subsection

(2) requires the declaration to be made to the Commissioner disclosing, inter

alia, the amount of income declared, giving, where available, details of the previous

year or years in which the income was earned and the amount pertaining to each

such year, and whether the amount declared is represented by cash (including bank

deposits), beullion, investment in shares, debts due from other person, commodity

or any other assets and the name in which it is held and location thereof. Subsection

(3) creates a legal fiction by providing that income-tax shall be charged on the

amount of the voluntary disclosed income at certain specified rates "as if such

amount were the total income of the declarant". Under sub-section (4) the

Commissioner is required, within 30 days, if satisfied that the whole or any part of

the amount of income declared has been detected or deemed to have been detected

by the Income-tax officer prior to the date of declaration, to make an order in

writing to that effect and forward a copy thereof to the declarant. Any person who

objects to such an order may, within 30 days, apply to the Board under subsection

(5) requesting for appropriate relief in the matter. The Board may pass such orders

under sub-section (6) as it thinks fit. Subsection (7) provides that the Commissioner

shall forward the declaration to the Income-tax Officer together with a copy of his

order, if any, under sub-section (4) and the Income-tax Officer shall thereupon

determine the sum payable by the declarant in accordance with sub-section (3) and

if the order of the Commissioner has been varied by the Board under sub-section

(6), also the sum so payable in respect of the variation made, and shall serve on the

declarant a notice of demand under section 156 of the 1961 Act and the provisions

of Chapter XV and Chapter XVII-D of and the Second and the Third Schedules to,

that Act, shall as far as may be apply accordingly, as if the said sum were a sum

payable under that Act. Sub-section (8) makes the order under sub-section (6) final.

Sub-section (9) provides that any amount of income-tax paid in pursuance of a

declaration made under this section shall not be refundable in any circumstances, It

further provides that no person, who made the declaration shall be entitled in

respect of the voluntary disclosed income or any amount of tax paid thereon to

reopen any assessment or re-assessment made under the 1922 Act or the 1961 Act

or the Excess Profits-tax Act, 1940 or the Business Profits Tax Act, 1947 or the

Super Profits Tax Act, 1963 or the Companies (Profits) Sur-tax Act, 1964 or claim

any set off or relief in any appeal, reference, revision or other proceeding in relation

to such assessment or reassessment. Sub-section (10) lays down that the amount of

the voluntary disclosed income shall not be included in the total income of the

declarant for any assessment year under any of the Acts mentioned in sub-section

(9) if he has credited such amount in the books of account, if any, maintained by

him for any sources of income or in any other record. Under sub-section (II),

nothing contained in any declaration made is admissible as evidence against the

declarant for the purpose of any assessment proceeding or any proceeding relating

to imposition of penalty or for the purpose of prosecution under any of the Acts

mentioned in sub-section (9) or the Wealth-tax Act. Sub-section (12) makes all

particulars contained in any declaration or record of any proceeding confidential and

no public servant can disclose any particulars contained in any such declaration on

record, except to an officer employed in execution of any of the Acts mentioned in

subsection (9) or the Wealth-tax Act to any officer appointed by the Comptroller and

Auditor-General of India or the Board to audit income-tax receipts or refunds. Subsection (13) deals with rectification of any mistake apparent from the record of any

proceeding. Sub-section (14) requires the income-tax under the said section to be

deposited to the credit of the Central Government. The Commissioner on an

application by the declarant is required under sub-section (15) to grant a certificate

to him setting forth the particulars of the voluntary disclosed income and the

amount of income-tax paid and the date of payment. Sub-section (16) (b) provides

that all other words and expressions used in section 24 but not defined and defined

in the 1961 Act shall have the meanings respectively assigned to them in the said

Act.

( 9 ) THUS, where any person makes a declaration in respect of the amount

representing income chargeable to tax under the 1922 Act for any assessment year

commencing on or before April 1, 1964, which has neither been disclosed nor

detected earlier, he shall be charged income-tax in accordance with sub-section (3)

in respect of the amount so declared- By the help of a legal fiction introduced in

sub-section (3) by use of the words: "as if such amount were the total income of the

declarant", the amount so declared is turned into his total income and income-tax,

according to that section, is charged on it at the prescribed rates. The declarant is

required to give in his declaration, inter alia, details as to whether the amount is

represented by cash, bullion, investments, etc. and the name in which it is held and

location thereof. It is significant that he is not required to disclose the nature and

source of the amount as declared. Income-tax is charged on the amount so declared

in accordance with sub-section (3) notwithstanding anything contained in the 1922

Act or the 1961 Act. This result has been achieved by incorporating a non obstante

clause to this effect in sub-section (1 ). The Income-tax Officer has then to

determine the sum payable by the declarant in accordance with sub-section (3) and

to serve upon him a notice of demand under the 1961 Act. He is not to enter into

any investigation. Finality is sought to be attached to the said declaration and the

subsequent proceedings, by sub-sections (9) to (12) according to which any amount

of income-tax paid in pursuance of the aforesaid declaration is made non-refundable

in any circumstances. The declarant is not entitled to reopen any assessment or

reassessment or claim any set off or relief. The amount so declared is treated as a

separate block of income of the declarant; and is not to be included in his total

(disclosed) income for any year, if he has credit such amount in his. books of

account, if any, or in any other record. In short, the amount so declared by the

declarant is his total income and income-tax is charged thereon at the prescribed

rates, which is not refundable in any circumstances nor can any set off or relief be

claimed by him in respect thereof.

( 10 ) MR. Dhebar contended that under sub-section (1) of section 24, the

declaration is required to be made in respect of the amount which represents the

income of the declarant. The declaration cannot be made in respect of an amount

which is not the income of the declarant. If, therefore, a person has made a

declaration with respect to an amount which is not his income but is the income of

somebody else, then, the learned counsel urged, there is nothing to prevent an

investigation into the true nature and source of the said amount. This contention is

not well forwarded. When a declaration is made under sub-section (1), then

notwithstanding anything contained in the 1922 Act or the 1961 Act, income-tax has

to be charged thereon in accordance with sub-section (3) as if it were the total

income of the declarant himself. Without investigating into the nature and source of

the amount, the Income-tax Officer under sub-section (7) is required to determine

the sum payable by the declarant in accordance with sub-section (3 ). By the fiction

introduced in sub-section (3) the amount declared becomes the total income of the

declarant. The aim of section 24 of the Finance Act, as was explained by the Finance

Minister in his speech while introducing the budget for the year 1965-66 was "to

mitigate the evil of the mischief in the economy created by unaccounted income and

wealth". It is for this reason that investigation into the truth of declaration was

specifically ruled out. Whatever was declared was to be treated as the total income

of the declarant. The object of bringing out on the surface the hidden and

unaccounted money was achieved by enabling a declaration to be made with

respect to it. It is, therefore, not possible for the revenue to go into the question of

nature and source of the declared amount and to say that it does not represent the

income of the declarant.

( 11 ) MR. Dhebar contended that the benefits under the scheme introduced by

section 24 of the Finance Act are available to the declarant alone. There is nothing

according to him, to prevent the Income-tax Officer, if he is not satisfied with the

explanation of the assessee (otherthan the declarant) about the nature and source

of the amount found credited in his books, from including the said amount in the

total Income of that assessee in spite of it having already been made subject of a

declaration by the declarant and then taxed under the scheme. This contention, too,

is not well founded. For, if the amount declared is the income of the declarant and

has to be taxed in his hands which tax is not refundable under any circumstances,

then the same amount cannot be the income of any other person also. The legal

fiction created by sub-section (3) of section 24 of the Finance Act by which the

amount declared by the declarant has to be charged to income-tax at the prescribed

rates, "as if such amount were the total income of the declarant", can operate only

on the assumption that it is not the income of any one else. As was observed by the

Supreme Court in Commissioner of Income-tax, Delhi v. Teja Singb, (1959) 35 ITR

408, (1) "it is a rule of interpretation well settled that in construing the scope of a

legal fiction it would be proper and even necessary to assume all those facts on

which alone the fiction can operate. " Mr. Dhebar submitted that a legal fiction is

adopted in law for a limited purpose. The legal fiction contained in sub-section (3) is

limited in its scope, he said, to the purposes of the Finance Act and cannot be

invoked when applying the provisions of section 68 of the 1961 Act. But, what is the

purpose of the Finance Act It is to bring to income-tax all such income which has

hitherto remained undisclosed, by treating it as the total income of the declarant. If,

therefore, the declared amount becomes under the Finance Act the total income of

the declarant for the purpose of charging income-tax on it, it cannot be the income

of some one else also for the same purpose of again charging income-tax on it. The

legal fiction created by sub-section (3), therefore, finally imprints on the sum

declared the character of total income of the declarant; and the finality is achieved

by enacting that the income tax paid as a result of the declaration shall not be

refunded in any circumstances. If Mr. Dhebars contention is accepted, this very

amount which has irrevocably become under the Finance Act the income of the

declarant will be subjected to income-tax by the Income-tax Officer under section 68

of the 1961 Act as the income also of the assessee in whose books it may be found

to have been credited. Apart from nullifying the fiction created by sub-section (3) as

aforesaid, it would result in double taxation on the same income, and that too not

only in one year, but year after year. For, the Income-tax Officer dealing with the

declarant would be able to pin him down to his declaration, which is irrevocable and

continue to charge income-tax on the income of the amount declared by him under

the Finance Act year after year. The Income-tax Officer dealing with the assessee in

whose books the said amount stands credited, will by virtue of section 68 of the

1961 Act, be able to charge the same amount to income-tax as his income. This will

create an anomalous situation which neither the Finance Act nor the 1922 Act or the

1961 Act contemplates. There was nothing to prevent the legislature from enacting

a specific provision for such a double taxation if it really was intended to be charged.

In its absence, we are not privileged to read in the enactments concerned

something which the legislature in its wisdom has omitted to provide. In Jain

Brothers and others v. Union of India and others, (1970) 77 ITR 107 [LQ/SC/1969/469] , the Supreme

Court on page 112 (2) observed: "it is not disputed that there can be double

taxation if the legislature has distinctly enacted it. It is only when there are general

words of taxation and they have to be interpreted, they cannot be so interpreted as

to tax the subject twice over to the same tax". In the present case, the legislature

has nowhere sanctioned the imposition of double taxation whether by express or by

implied words. The Act, under these circumstances, cannot be interpreted so as to

tax the subject or the same income twice over.

( 12 ) IN Income-tax Officer v. Bachu Lal Kapoor, (1966) 60 ITR 74 [LQ/SC/1965/384] , (3) the

members of a Hindu undivided family were assessed as individuals. Subsequently,

the Income-tax Officer issued notice under section 34 of the 1922 Act for assessing

the Hindu undivided family in regard to the escaped income of the same assessment

year for which the members as individuals had already been taxed. The Supreme

Court observed that there was nothing wrong in the Income-tax Officer initiating

proceedings against the Hindu undivided family. But, it was held that after the

assessment proceedings culminated in the assessment of the Hindu undivided

family, appropriate adjustments had to be made by the Income-tax Officer in

respect of the tax realised by the revenue on that part of the income, which had

been assessed in the hands of the individuals. This direction was given by the

Supreme Court on the well known dictum that the charge has to be levied on an

income only once. It was observed that the Act does not envisage taxation of the

same income twice over "on one passage of money in the form of one sort of

income". A similar claim for an adjustment, set off, refund or relief cannot be made

in the present case by the declarant as sub-section (9) of section 24 of the Finance

Act provides a statutory bar against it. The only way to avoid double taxation in this

case would, therefore, be not to tax this amount again in the hands of the assessee

in whose books it may be found credited, on the plea that the explanation of a mere

declaration by the declarant is not sufficient. It has, on the other hand, to be

accepted as a satisfactory explanation.

( 13 ) SECTION 24 of the Finance Act is even otherwise an overriding provision and

section 68 of the 1961 Act has to yield place to it. Subsection (1) of section 24 of

the Finance Act specifically lays down that where any declaration in respect of the

amount representing income chargeable to tax is made, the said amount is to be

charged to tax in accordance with sub-section (3) "notwithstanding anything

contained in the" 1922 Act or the 1961 Act. The provisions of section 24, by this non

obstante caluse have thus specifically been made to override the provisions of the

1922 Act and the 1961 Act. The amount which becomes the total income of the

declarant under the Finance Act cannot, therefore, be included in the total income of

any other assessee by invoking section 68 of the 1961 Act. Section 68 is a part of

the general law of income-tax, while section 24 of the Finance Act is a special

provision which specifically deals with the undisclosed amount. A special provision

according to the settled principles of interpretation has to be given effect to; while

the general provision would be applicable to such cases only to which the special

provision would not apply. Sub-section (1) read with sub-section (3) of section 24 of

the Finance Act, therefore, enjoys an overriding posi- tion oversection 68 of the

1961 Act. The Income-tax Officer will not, therefore, be able to include the declared

amount in the total income of the assessee as unexplained credit standing in his

books.

( 14 ) MR. Dhebar then submitted that sub-section (1) read with subsection (3) of

section 24 of the Finance Act constituted a separate law of taxation, which was an

independent statute having nothing to do with the 1922 or 1961 Acts. The incometax

charged on income under the 1922 Act or the 1961 Act could not be said to be a

second charge when the same income had been charged to income-tax under the

Finance Act also. Even the total income referred to in sub-section (3) of section 24 of

the Finance Act, according to the learned counsel, was not the same total income as

was referred to in section 2 (45) of the 1961 Act. These contentions however, are

not correct. Section 4 of the 1961 Act provides that where any Central Act enacts

that income-tax shall be charged at any rate, income-tax shall be charged at that

rate in respect of the total income of the previous year of every person- Sub-section

(3) of section 24 of the Finance Act, which is a Central Act enacts that income-tax

shall be charged on the amount of voluntary disclosed income at the specified rates,

as if such amount were the total income of the declarant. The amount voluntary

disclosed is not charged to income- tax, as such, but is required to be taken as the

total income of the declarant for levying income-tax thereon, because income-tax

under section 4 of the 1961 Act is charged in respect only of the total income. Subsection (16) (b) of section 24 of the Finance Act specifically enacts that words and

expressions used in the said section but not defined and defined in the 1961 Act

have the meanings respectively assigned to them in the said Act. The expression

"total income" in the Finance Act, therefore, has to be given its meaning as given in

section 2 (45) of the 1961 Act, according to which it means the total amount of

income referred to in section 5 computed in the manner laid down in the Act. So

whatever may be the ingredients of the amount declared by the declarant under the

Finance Act, it is deemed to be the "total income" of the declarant, as if it was the

income referred to in section 5 computed in the manner laid down in the 1961 Act

and has to be charged to income-tax as such. Mr. Dhebar contended that the

definition of total income as contained in section 2 (45) of the 1961 Act has to be

read subject to the opening words in section 2 reading, "unless the context

otherwise requires". According to him, the context here is different, because under

the 1961 Act total income has to be computed in the manner laid down in that Act,

whereas under the Finance Act the amount declared has to be taken as the total

income without going into the manner in which it has been computed. The

contention of Mr. Dhebar is not well founded. The use of the words "as if it were the

total income of the declarant" introduces in sub-section (3) a "legal fiction" implying

that an imaginary state of affairs is to be treated as real. Whatever, therefore, be

the manner of computing the amount declared, it has by the said legal fiction to be

treated as the total income as defined in section 2 (45 ). There is nothing else in

sub-section (3) or any other provisions in the Finance Act from which it could be

said that the expression "total income" used in that Act is something different from

the same expression when defined and used in the 1961 Act. The legislature could

well have enacted that income-tax shall be charged under the Finance Act on the

amount voluntarily disclosed. But, the said voluntarily disclosed amount under the

Finance Act has been first turned into the "total income" of the declarant because

income-tax is charged under the 1961 Act on the "total income". The provisions in

the Finance Act have, therefore, been brought in line with and made supplementary

to the 1961 Act. The expression "income-tax" itself; has acquired a connotation well

known and understood in law. It implies a tax on income charged under the

provisions of the relevant Income-tax Act. There is nothing in the Finance Act to

show that the income-tax referred to therein was intended by the legislature to be

an income-tax of a kind different from the (me levied under the 1922 or 1961 Acts.

The contention of Mr. Dhebar that the income-tax levied under the Finance Act is

altogether a different variety of income-tax and, therefore, its imposition does not

involve double taxation of income has no basis.

( 15 ) MR. Dhebar then relied on a judgment of the Gujarat High Court, in Manilal

Gafoorbhai Shah v. Commissioner of Income-tax Gujarat, Ahmedabad, (1973) 2

Income-tax Journal 283, (4) the learned Judges of that court while examining the

scope of section 24, observed that they could not attribute to the legislature an

intention to encourage fraud. But, from the budget speech of the Finance Minister,

noticed earlier, it was clear that the Governments various measures to unearth

unaccounted incomes and wealth had not met the desired success. It was expected

under the scheme, as the Finance Minister put it, that "those who have been misled

in the past would find in it a reason enough to return to the path of civic

responsibilities. It was not a question of encouraging fraud. It was intended to

forgive and forget the by-gones and to give an opportunity to those who had been

misled in the past to return to the right path. Persons who had not disclosed their

income in the past were, therefore, not to be questioned. Even if the declarant was

a benamidar, his declaration was not to be questioned and the amount declared by

him was treated as his total income. This was done in order to bring to the surface

the hidden wealth. There was no question of encouraging fraud. It was a measure

specifically designed to ignore the misdeeds of the past. Once the hidden amount

came out to the surface, the declarant, whoever he may be, was to be treated as its

owner and was expected to keep to the right path thereafter. The law, therefore,

specifically created a fiction for the purpose of treating the declared amount to be

the income of the declarant. With respect, we must say, that the fiction contained in

sub-section (3) and the non obstante clause in sub-section (1) of section 24

appeared to have escaped the notice of the learned Judges of the Gujarat High

Court in thte said case. As was observed in Vesteys (Lord) Executors v. Inland

Revenue Commissioners, (1949) I All E. R. 1108, (5) "tax avoidance is an evil, but it

would be the beginning of much greater evil if the courts were to overstretch the

language of the statute in order to subject to taxation people of whom they

disapproved". The well settled rule of interpretation of fiscal statute is that "if the

person sought to be taxed comes within the letter of the law, he must be taxed,

however great the hardship may appear to the judicial mind to be. On the other

hand, if the Crown seeking to recover the tax cannot bring the subject within the

letter of the law, the subject is free, however apparently within the spirit of the law

the case might otherwise appear to be. " (Partington v. Attorney General, (1969) L.

R. 4 H. L. 100), (6 ).

( 16 ) THE facts of the case before the Gujarat High Court were even otherwise

different as the amount declared had been detected by the Income-tax Officer prior

to the date of declaration. The said judgment, therefore, cannot be of any use to

the revenue in this case. Mr. Dhebar also referred to a judgement of the Allahabad

High Court in M/s. Badri Prasad and Sons v. Commissioner of Income-tax, U. P. ,

Kanpur, ITR 40 of 1972 decided on September 12, 1973, (7 ). The learned Judges in

that case upheld the finding of the Tribunal to the effect that the Finance Act

"neither intended nor had the effect of converting the income belonging to the

person behind the screen into the income of the declarant. " The learned Judges of

the Allahabad High Court, we must say with respect, did not consider the effect of

the fiction introduced in sub-section (3) or of the non-obstante clause in sub-section

(1) of section 24 of the Finance Act. The said judgment, therefore, is of little help to

the revenue.

( 17 ) COMING to the facts of this case, the Income-tax Officer while scrutinizing the

books of the assessee, petitioner No. 3, found certain sums credited in favour of

three depositors. The explanation given was that the said sums had been duly

declared voluntarily by the depositors, under section 24 of the Finance Act. There is

no reason why this explanation be disregarded as being unsatisfactory. Under

section 68 of the 1961 Act, the initial onus lies on the assessee to offer a

satisfactory explanation. The explanation offered in the present case should have

been taken to be satisfactory in view of the statutory provisions discussed above.

The onus shifted thereafter on the Income-tax Officer to establish that the sum so

credited were the income of the assessee, which has not been discharged. In any

case, the provisions of the Finance Act as already noticed, override the provisions of

the 1961 Act. The Income-tax Officer had no jurisdiction while dealing with the case

of the petitioners to question the declarations made by the depositors under the

Finance Act, as a result of which they (the depositors) had already paid tax, which

under no circumstances could be refunded or adjusted. The Income-tax Officer

could not treat the amounts deposited by the depositors with the petitioner No. 3 as

if they were not their income and to treat the same as the income of petitioner No.

3. This petition, therefore, must succeed and a writ of certiorari must issue,

quashing the impugned orders in so far as they relate to the addition of Rs. 30,000.

00 as the petitioners income from undisclosed sources. We quash the order dated

May 30, 1972 of the Additional Commissioner of Income-tax and dated January 18,

1972 of the Income- tax Officer in so far as they relate to the addition of Rs. 30.

000. 00 to the income of petitioner No. 3. We accordingly set aside the addition of

Rs. 30,000. 00 to the total income of the petitioner No. 3 and direct the respondents

not to charge any income-tax in respect of the said sum from the petitioners. In the

peculiar circumstances of the case, however, we make no order as to costs.