Voluntary disclosure immunity is limited to declarants and does not displace scrutiny of unexplained credits under income tax law.

Immunity under the Voluntary Disclosure Scheme was confined to the declarant and could not be extended to a third-party assessee. Credits found in the assessee's books remained examinable under section 68 of the Income-tax Act, and unexplained amounts could be treated as income from undisclosed sources if no satisfactory explanation was offered. The provision granting immunity was also not treated as overriding section 68, and the contention of double taxation was rejected. The assessment position in favour of the Revenue was restored.

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Issues: Whether the immunity under section 24 of the Finance (No. 2) Act, 1965 under the Voluntary Disclosure Scheme extends to the assessment of a third party, and whether that provision overrides section 68 of the Income-tax Act, 1961 in relation to credits found in the assessee's books.

Analysis: The immunity created by section 24 was held to be confined to the declarants and not extendable to a third party assessee. It was also held that section 24 does not prevent the Income-tax Officer from treating credited amounts as the income of the assessee from undisclosed sources if the assessee fails to offer a satisfactory explanation under section 68. The Court further rejected the contention that section 24 has an overriding effect over section 68 and found no basis for the plea of double taxation.

Conclusion: The questions were answered against the assessee and in favour of the Revenue; the High Court's judgment was set aside and the writ petition was dismissed.

Final Conclusion: The appeal succeeded, and the assessment position favourable to the Revenue was restored.

Ratio Decidendi: Immunity under a voluntary disclosure provision is limited to the declarants and does not override the Income-tax Act in proceedings against a third party whose unexplained credits remain subject to section 68.

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