Voluntary disclosure immunity extends to full disclosed wealth when prior assessment was incomplete and notices were not served.

Under the voluntary disclosure scheme, immunity from penalty extended to the entire wealth disclosed where the earlier returns were not filed in response to Wealth-tax Act notices and the relevant assessment had not been completed before the later declaration. The scheme's apportionment proviso applied only where the wealth for the relevant year had already been finally assessed before disclosure. On the stated facts, the subsequent introduction of section 15(5A) also supported the view that prior non-payment did not deny protection. The penalty could not be split between earlier and later returns.

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Issues: Whether the assessee was entitled to immunity from penalty under the voluntary disclosure scheme for the entire wealth disclosed, and whether any apportionment of penalty could be made on the footing of an earlier return filed before the scheme came into force.

Analysis: The returns filed on 17 September 1975 were held, on a finding of fact, not to have been filed in response to the notices under section 17 of the Wealth-tax Act, 1957, and that finding could not be reopened in the reference. The scheme under section 15(1) of the Voluntary Disclosure of Income and Wealth Ordinance, 1975 contemplated protection in cases where wealth was later disclosed, but proviso (ii) to that provision made apportionment relevant only where the wealth for the relevant year had already been finally assessed before the declaration. Here, the assessment on the earlier return had not been completed before the later return and declaration were filed. The later enactment of section 15(5A) also supported the view that non-payment of tax before declaration did not exclude the assessee from protection on the facts of the case.

Conclusion: The assessee was entitled to immunity under the voluntary disclosure scheme in respect of the entire disclosure, and the penalty could not be sustained by splitting the protection between the earlier and later returns.

Final Conclusion: The reference was answered in favour of the assessee, and the Revenue's claim for partial penalty relief on the basis of apportionment failed.

Ratio Decidendi: Where notices under the Wealth-tax Act are found not to have been served and the relevant assessment has not been completed before the voluntary disclosure declaration, the statutory protection under the disclosure scheme cannot be cut down by apportioning penalty against an earlier return.

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