Partial voluntary disclosure does not bar reassessment where escaped income remains undisclosed under income-tax law.

A voluntary disclosure under the Voluntary Disclosure of Income and Wealth Act, 1976 protects only the income actually and fully disclosed, subject to the statutory conditions. It does not create a complete bar to reassessment under sections 147 and 148 of the Income-tax Act, 1961 where the disclosure is partial or leaves part of the escaped income undisclosed. On the stated facts, the remaining escaped income could therefore be brought to tax through reassessment, because the assessee had not disclosed the entire amount.

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Issues: (i) Whether voluntary disclosure of income under the Voluntary Disclosure of Income and Wealth Act, 1976 barred reopening of assessment under section 147(a) of the Income-tax Act, 1961. (ii) Whether there was material to sustain the Department's computation of escaped income for the years under consideration.

Issue (i): Whether voluntary disclosure of income under the Voluntary Disclosure of Income and Wealth Act, 1976 barred reopening of assessment under section 147(a) of the Income-tax Act, 1961.

Analysis: The scheme of sections 3 and 8 of the Voluntary Disclosure of Income and Wealth Act, 1976 protects only the voluntarily disclosed income, and only when the statutory conditions are fulfilled. It does not create a complete bar against reassessment where the disclosure is not full or where only part of the escaped income is disclosed. In such a situation, the reassessment machinery under sections 147 and 148 of the Income-tax Act, 1961 remains available.

Conclusion: The question was answered in the negative against the assessee and in favour of the Revenue.

Issue (ii): Whether there was material to sustain the Department's computation of escaped income for the years under consideration.

Analysis: On the facts found, the assessee had not disclosed the entire escaped income and had made only a partial voluntary disclosure. That factual position justified the Department's action in bringing the remaining escaped income to tax through reassessment.

Conclusion: The question was answered in the affirmative in favour of the Revenue and against the assessee.

Final Conclusion: The reassessment action was held to be competent because the voluntary disclosure did not cover the entire escaped income, and the unanswered balance could validly be brought to tax under the reassessment provisions.

Ratio Decidendi: A voluntary disclosure scheme does not bar reassessment under the Income-tax Act, 1961 when the disclosure is only partial or otherwise does not cover the whole escaped income; the undisclosed balance may be reopened and assessed under sections 147 and 148.

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