Post-seizure income disclosures fall outside voluntary disclosure relief and are governed instead by the special seizure regime.

A declaration of concealed income made after a search seizure was not accepted under section 3 of the Voluntary Disclosure of Income and Wealth Act, 1976, because section 3(2) expressly excludes declarations relating to a previous year in which assets or books were seized under section 132 of the Income-tax Act, 1961. That exclusion was treated as substantive, reflecting that a post-seizure filing is not a truly voluntary disclosure once concealment has been exposed. Such cases fall instead within section 14, which applies where seizure has already occurred and grants only the limited benefits available thereunder. The declaration was therefore inadmissible under section 3.

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Issues: Whether a declaration of concealed income made after a search and seizure during the relevant previous year could be accepted under section 3 of the Voluntary Disclosure of Income and Wealth Act, 1976, or was confined to the special regime of section 14.

Analysis: Section 3 granted concessional treatment for voluntary declarations of income chargeable to tax for specified assessment years, but section 3(2) excluded declarations relating to income for a previous year in which books, money, bullion, jewellery, or other valuable articles had been seized in a search under section 132 of the Income-tax Act, 1961, as well as income of earlier previous years. The exclusion was held to be substantive and not merely provisory. A declaration made after seizure was not treated as a truly voluntary disclosure because the seizure itself exposed the concealment. The Court held that such cases fell within section 14, which specifically dealt with declarations where seizure had already occurred and granted only the limited benefits provided thereunder.

Conclusion: The declaration was not admissible under section 3 and was rightly rejected; the case was governed by section 14, and the decision stood in favour of the Revenue.

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