INCOME TAX
INSTRUCTION NO. 1696/1996
Dated: February 18, 1996
Section(s) Referred: 273
Statute: Income - Tax Act, 1961
The Board have issued circular No. 423, dated 16th June, 1985, No 432, dated the 15th November, 1985, No. 439, dated the 15th November, 1985, No. 440, dated the 15th November, 1985 and No. 441, dated the 15th November, 1985 with a view to encouraging the assessees to make voluntarily a true and full disclosure of their incomes and wealth without any fear of penal consequences. The concession under these circulars is available only to such persons who come forward and disclose their true incomes and wealth and pay the tax thereon by the 31st march, 1986.
2. There may be cases where in pursuance of the aforesaid circulars statements or estimates of advance tax in respect of the income for the period which would be the previous year for an assessment for the assessment year 1986-87 are filed after the due dates as specified in Chapter XVII-C of the Income-tax Act, 1961 for this purpose and the advance tax payable is also not paid on or before the dates mentioned in Section 211 of the Income-tax Act, 1961. Such cases may attract penal provisions of Section 273 of the Income-tax Act, 1961.
3. As regards the penal provisions under Section 273 of the Income-tax Act, a sympathetic and a liberal approach should be adopted in cases where a taxpayer voluntarily and prior to the detection of the concealment of income by the Department, makes a true and full disclosure of his income for the period which would be the previous year for an assessment for the assessment year 1986-87 for the purposes of payment of advance tax during the financial year 1985-86. In respect of the income of the aforesaid period, a person should, for the purposes of Section 273 of the Income-tax Act, be deemed to have been prevented by reasonable cause from filing a statement or an estimate of advance tax or be deemed to have filed a true statement or estimate of advance tax payable by him if the assessing officer is satisfied that such person :
(a) has prior to the detection by the Income-tax Officer, or as the case may be, the Inspecting Assistant Commissioner of Income-tax , of the concealment of particulars of income or of the inaccuracy of particulars furnished in respect of such income, voluntarily and in good faith made a full and true disclosure of such income;
(b) has in a case where he was liable to furnish a statement or, as the case may
be, an estimate of advance tax payable by him under the provisions of Chapter
XVII-C, furnished such statement or estimate on or before the 31st day of
March, 1986;
(c) has paid the advance tax referred to in Chapter XVII-C on or before the 31st day of March, 1986 and the tax so paid does not fall short of:
(i) in the case of an assessee, being a company, eighty three and one-third percent of the assessed tax as defined in Sub-section (5) of Section 215 and
(ii) in the case of any other assessee seventy-five percent of the assessed tax as defined in Sub-section (5) of Section 215.
(d) has furnished the return of income which he was required to furnish under Sub-section (1) of Section 139 for the assessment year 1986-87 within the time allowed and in the manner required by Sub-section (1) of Section 139;
(e) has cooperated in any enquiry relating to the assessment of his income.
4. The assessing officers should, therefore, not initiate any proceeding for the imposition of penalty on a person for an offence under Section 273 in respect of any assessment for the assessment year 1986-87 in the kinds of cases referred to in para(3) above.
5. These instructions may be brought to the notice of all officers working under your charge.