2001 (8) TMI 89 - HC - Income Tax

Court rules rectification petition does not constitute pending litigation under tax Scheme, emphasizing strict interpretation.

The court ruled in favor of the respondent, holding that the pendency of a rectification petition under section 154 of the Income-tax Act did not ... Kar Vivad Samadhan Scheme, Condition Precedent, Interpretation of Taxing Statutes Issues:Interpretation of sub-clause (c) of clause 95(i) of the Kar Vivad Samadhan Scheme in relation to the pendency of a revision petition.Detailed Analysis:The case involves a dispute regarding the eligibility of the petitioner to benefit from the Kar Vivad Samadhan Scheme due to the pendency of a revision petition. The petitioner had filed a revision petition against assessment orders from 1980-81 to 1984-85, which was dismissed in 1993 due to a delay of over four years. Subsequently, the petitioner filed a rectification petition under section 154 of the Income-tax Act, 1961. The Government introduced the Kar Vivad Samadhan Scheme during the pendency of the rectification petition, which the petitioner sought to benefit from by filing a declaration. However, the respondent rejected the declaration on the grounds that the revision petition was not pending at the time of filing the declaration.The key contention raised by the petitioner's counsel was that the rectification petition constituted pending litigation between the petitioner and the Department, making the petitioner eligible for the Scheme. The counsel argued for a purposive interpretation of the Scheme to extend its benefits to the petitioner. In contrast, the Revenue's counsel emphasized a strict construction of the self-contained code of the Scheme, stating that the pendency of a revision petition was a prerequisite for availing the benefits. The Revenue also cited a clarification issued by the Government and relied on judicial precedents advocating a strict interpretation of similar schemes.The court examined previous decisions, including one where the authority to accept the declaration under the Scheme was the revisional authority itself. The court held that for claiming benefits under the Scheme, the essential requirement was the pendency of a revision petition at the time of filing the declaration. The court emphasized the objective of the Scheme to end litigation and ensure tax collection from the assessee. It noted that the Scheme only covered specific types of litigation, such as appeals, references, writ petitions, and revision petitions, which were pending at the time of filing the declaration.Ultimately, the court ruled in favor of the respondent, stating that the pendency of a rectification petition under section 154 of the Act did not qualify as pending litigation under the Kar Vivad Samadhan Scheme. The court highlighted that the Scheme was primarily a recovery scheme and a concession extended to the assessee, which needed to be strictly interpreted within the Scheme's framework. Drawing on a Supreme Court decision, the court emphasized that concessions could not be claimed as a matter of right and must be understood within the scheme's provisions.In conclusion, the court dismissed the original petition, affirming the respondent's decision to reject the petitioner's declaration under the Kar Vivad Samadhan Scheme.