Personal immunity under voluntary disclosure scheme cannot be claimed by a different taxable entity in penalty proceedings.

Immunity under section 15 of the Voluntary Disclosure of Income and Wealth Act, 1976 is personal to the declarant and applies only to the person who made the disclosure. Where the declaration was made by an individual, that protection could not be transferred to a Hindu undivided family treated as a separate assessee under the wealth-tax law. The statutory scheme did not support the view that immunity attached to the disclosed wealth regardless of the taxable entity in whose hands it was considered. On that basis, the cancellation of penalties under section 18(1)(a) of the Wealth-tax Act, 1957 was not sustainable for the years in question.

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Issues: Whether immunity under section 15 of the Voluntary Disclosure of Income and Wealth Act, 1976 extended to penalty proceedings under section 18(1)(a) of the Wealth-tax Act, 1957 when the disclosure was made by an individual but the penalty was sought to be avoided by a Hindu undivided family; and whether the Tribunal was justified in cancelling the penalties for the assessment years in question.

Analysis: Section 15 of the Voluntary Disclosure of Income and Wealth Act, 1976 grants immunity only in respect of the person making the declaration and only to the extent that the declared net wealth is not taken into account for penalty or prosecution under the scheme. The statutory scheme treats an individual and a Hindu undivided family as distinct assessees. On the facts found, the disclosure for the relevant years up to assessment year 1966-67 was made in the capacity of an individual, whereas the assessee before the Wealth-tax authorities was a Hindu undivided family. The immunity available under sections 15 and 18 of the 1976 Act could not, therefore, be carried over from the individual declarant to the Hindu undivided family. The Tribunal's view that the immunity attached to the wealth irrespective of the hands in which it was considered was not sustainable.

Conclusion: The immunity under the voluntary disclosure scheme was not available to the assessee Hindu undivided family for the years in which the declaration had been made by the individual, and the penalties were rightly upheld.

Final Conclusion: The questions referred were answered against the assessee and in favour of the Revenue, with no entitlement to the claimed penalty immunity in the Hindu undivided family's hands.

Ratio Decidendi: Immunity under a voluntary disclosure scheme is personal to the declarant and cannot be claimed by a different taxable entity, even if that entity is represented by the same individual.

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