NEW DELHI, Dec 16: With barely a fortnight left for its closure, the Voluntary Disclosure of Income Scheme (VDIS) has hit another snag. The Chambers of Chartered Accountants (CCA) has moved the Delhi high court for a restraint on reviewing declarations. The Central Board of Direct Taxes had issued notices for re-examining declarations recently.

The writ filed by the chamber, which represents more than a thousand chartered accountants, will come up for hearing on Wednesday, chamber president VD Agarwal said. He also regretted that the CBDT has started issuing the notices for reviewing declarations which amounted to breach of faith. In certain cases, especially with regard to declarations in the form of silver utensils, the board is reported to have even called back the certificates given to the declarants, for review.

While the finance ministry hopes to collect a handsome amount through the scheme which is coming to close on December 31, perturbed chartered accountants have claimed that the collection is being badly affected.

Former president of the Institute of Chartered Accountants of India (ICAI) KM Agarwal, suggested that the CBDT should clarify the term "unusual declaration" to instill confidence among the prospective declarants who were shying away from the scheme fearing review by the CBDT. A large amount of disclosures were expected to be made during the fortnight before the closure of the scheme and the board should not take time in clearing the vexed issues, he added.

However, sources in the finance ministry said that the collection through the VDIS would surpass declarations in the previous five such schemes which put together yielded Rs 776.63 crore.

Although, the ministry officials have refused to hazard a guess on the quantum of collection, they admit that thousands of the people have already taken advantage of the scheme to declare unaccounted income.

The board had also decided to keep the offices of all "designated officers" under the VDIS open till 8 pm on all days including Saturdays and uptil midnight on December 31.

On the other hand, a worried CCA described the impugned instructions issued by CBDT on November 25, 1997 as "arbitrary and unconstitutional" and took the government to court on the issue, adding to the fears of the prospective declarants who have yet to firm up their minds for taking advantage of the scheme.

The finance ministry officials, who shall be disclosing the exact quantum of disclosures after the close of the scheme, are confident that collections through VDIS 1997 are likely to be many times more than what was declared in the previous voluntary disclosure schemes. The first such scheme was launched in 1951 which fetched Rs 10.89 crore. This was followed by VDS 1965, which yielded Rs 60.25 crore, 1976 scheme Rs 256.70 crore and 1985 scheme Rs 458.79 crore.

According to CCA president Agarwal, the instructions of the board were against all the three main pillars of the scheme namely, prohibition on any inquiry of the declarant, immunity from prosecution and maintaining all secrecy of the declaration.

This confers the powers to re-examine and review the declarations already made and ask credible as well as satisfactory evidence with regard to the value on the date of acquisition.

He said that in view of the serious implications of the decision of the CBDT, "it is but necessary to ask for legal remedy before the court when no other option is left". CCA co-ordinator Rajeev Jain pointed out that no authority, including the revenue secretary, "till date has come out with solution in the matter and no answer to any of the questions referred has been given to the chamber".

Describing the nature of the circular, Jain said that it was not merely an executive order but a piece of legislature as section 76 of the I-T Act provided that all likewise orders should be placed before both the Houses of Parliament as early as possible and thus the CBDT was not the competent authority to pass such an order.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.