Alternative compliance under section 68 preserved declaration validity, but belated payment relief was refused without timely tender.

A declaration under section 68 of the Finance Act, 1965 may remain valid where the declarant uses the alternative mode in clause (iii), namely payment of at least half the tax by the prescribed date with security for the balance and an undertaking to pay later; the payment-period requirement was treated as applying to clause (ii), not clause (iii). The Commissioner should not reject such a disclosure before giving the declarant an opportunity to satisfy clause (iii), and a premature rejection was described as without jurisdiction. Pending actual payment under section 68, the disclosed amount could still be treated as part of total income for section 23A(1), and belated payment was not ordered absent a timely tender or waiver.

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Issues: (i) Whether a declaration under section 68 of the Finance Act, 1965 was invalid because the declarant did not specify an immediate payment date and instead undertook to pay the balance later; (ii) whether the Commissioner could reject the disclosure before the declarant had an opportunity to comply with clause (iii) of section 68(1); (iii) whether the order under section 23A(1) of the Income-tax Act could stand on the footing that the disclosed income formed part of the total income; and (iv) whether a writ could issue directing acceptance of payment after expiry of the statutory time.

Issue (i): Whether a declaration under section 68 of the Finance Act, 1965 was invalid because the declarant did not specify an immediate payment date and instead undertook to pay the balance later.

Analysis: The statutory scheme gave a declarant alternative modes of compliance. Clause (iii) permitted payment of not less than one-half of the tax by the prescribed date, with security for the balance and an undertaking to pay the balance within the stipulated period. On that reading, the requirement of specifying the payment period in the declaration applied to the mode under clause (ii), not to the mode under clause (iii). The declaration was therefore not invalid merely because it mentioned a later date for payment.

Conclusion: The declaration was not invalid on that ground and the view was in favour of the assessee.

Issue (ii): Whether the Commissioner could reject the disclosure before the declarant had an opportunity to comply with clause (iii) of section 68(1).

Analysis: The disclosure was made before assessment had been completed and before proceedings for the disclosed amount had been taken. The Commissioner gave no reasons for rejection. Since the assessee was entitled to take benefit of clause (iii), the Commissioner ought to have waited to see whether the statutory conditions were fulfilled. Rejection of the disclosure at that stage was therefore without jurisdiction.

Conclusion: The rejection order was illegal and was quashed in favour of the assessee.

Issue (iii): Whether the order under section 23A(1) of the Income-tax Act could stand on the footing that the disclosed income formed part of the total income.

Analysis: Until the tax payable under section 68 was actually paid, the disclosed amount continued to form part of the total income for the purposes of assessment and for consequential action under section 23A(1). The mere pendency of payment under section 68 did not disable the department from acting on the assessed total income. Accordingly, the challenge to the section 23A order could not succeed at that stage.

Conclusion: The order under section 23A(1) was upheld and the issue was against the assessee.

Issue (iv): Whether a writ could issue directing acceptance of payment after expiry of the statutory time.

Analysis: The assessee had not tendered the amount due by the statutory date, nor had it taken the steps contemplated for availing clause (iii). The existence of an earlier rejection did not by itself establish that a tender would necessarily have been refused. In the absence of an actual tender or clear waiver, the court declined to compel acceptance of belated payment.

Conclusion: No writ could issue to require acceptance of payment after the statutory deadline and this issue was against the assessee.

Final Conclusion: The disclosure rejection was set aside, but the assessee obtained no consequential monetary or mandatory relief, and the remaining challenge failed.

Ratio Decidendi: Where a taxing provision confers alternative modes of compliance, the court will construe the statute strictly and hold the declaration valid if it satisfies one permissible mode; however, consequential relief will not follow unless the assessee actually performs the statutory tender or equivalent obligation within time.

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