1999 (2) TMI 62 - HC - Income Tax

Court Upholds Rejection of Petitioner's Tax Revision Petition

The court upheld the rejection of the petitioner's revision petition filed under section 264 of the Income-tax Act due to delay beyond the limitation ... Kar Vivad Samadhan Scheme, Pendency Of Litigation, Limitation, Revision Issues Involved:1. Rejection of the revision filed u/s 264 of the Income-tax Act on the ground of limitation without hearing the petitioner.2. Justification of the third respondent in rejecting the declaration filed by the petitioner under the Kar Vivad Samadhan Scheme (KVS Scheme).Summary:Issue 1: Rejection of the Revision Filed u/s 264The petitioner-firm filed a revision petition u/s 264 of the Income-tax Act on January 5, 1999, challenging the assessment order dated March 29, 1996. The revision was filed beyond the one-year limitation period, and the petitioner sought condonation of delay citing the death of their counsel. The third respondent dismissed the revision petition on January 12, 1999, as not maintainable due to the delay.The court noted that u/s 264(3), the Commissioner has the discretion to condone delays if 'sufficient cause' is shown. The petitioner did not seek an oral hearing, and the court found no negligence or lack of bona fides. The court referred to the Supreme Court's principle that non-observance of natural justice is itself prejudice but held that futile writs should not be issued. The court found no sufficient cause for the delay, noting the petitioner's continued payments towards the due amount. Thus, the rejection of the revision petition was upheld.Issue 2: Rejection of the Declaration Filed Under the KVS SchemeThe petitioner filed a declaration u/s 88 of the Finance (No. 2) Act, 1998, on January 6, 1999, claiming benefits under the KVS Scheme. The third respondent rejected the declaration on January 29, 1999, stating that the conditions for the scheme were not met, specifically that no appeal or revision was admitted and pending.The court examined whether mere filing of a revision petition constituted 'pendency' u/s 95 of the Finance (No. 2) Act, 1998. It held that for revisions filed beyond the limitation period, pendency requires the condonation of delay. Since the petitioner's revision was not admitted due to the delay, it could not be considered pending. The court emphasized that the KVS Scheme aims to resolve bona fide pending litigations and rejected attempts to create artificial pendency to avail scheme benefits. Consequently, the rejection of the petitioner's declaration was deemed proper.Conclusion:The court rejected the petitioner's challenges to the orders dated January 12, 1999, and January 29, 1999, and the consequential notice, with costs of Rs. 2,000 payable to the respondents.