Beneficial tax settlement schemes should not fail for a short, explained delay when payment follows a bank holiday.

A short, satisfactorily explained delay in payment under the Kar Vivad Samadhan Scheme, 1998 should not defeat a declaration where the due date fell on a bank holiday and payment was made on the next working day. The Madhya Pradesh High Court applied the principle that a beneficial tax settlement scheme should not be enforced with undue rigidity when the delay is minimal and beyond the declarant's control. The rejection of the declaration was therefore unjustified, the delay ought to have been condoned, and the authority was directed to accept the declaration in favour of the assessee.

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Issues: Whether the declaration under the Kar Vivad Samadhan Scheme, 1998 could be rejected for short delay in payment, and whether the delay ought to have been condoned.

Analysis: The declaration had been accepted and tax liability determined under the scheme, but the amount was deposited after the stipulated period by a short margin. The Court held that the delay was minimal and satisfactorily explained, particularly as the due date fell on a bank holiday and payment was made on the next working day. Relying on the principle that a beneficial settlement scheme should not be applied with undue rigidity where the delay is beyond the control of the declarant, the Court found that the competent authority ought to have condoned the delay.

Conclusion: The rejection of the declaration was unjustified and the delay should have been condoned in favour of the assessee.

Final Conclusion: The impugned order was quashed and the authority was directed to accept the declaration under the scheme.

Ratio Decidendi: A short, satisfactorily explained delay in complying with a beneficial tax settlement scheme, especially where the due date falls on a bank holiday and payment is made on the next working day, should not defeat the declaration merely for want of rigid adherence to time.

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