Court upholds interest inclusion in tax scheme certificate

The court dismissed the writ petition challenging a certificate under the Kar Vivad Samadhan Scheme, 1998, which included interest under Section 220(2) of the Income Tax Act, 1961. The petitioner's objection to the interest levy was rejected, with the court upholding the authority's right to add interest even if not quantified earlier. Citing precedents from Madras and Andhra Pradesh High Courts, the court found no merit in the petitioner's arguments and affirmed the inclusion of interest in the certificate. No costs were awarded in this judgment.

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Issues:
Challenge to certificate dated 9.2.1999 under Article 226 of the Constitution of India seeking quashing and re-determination of amount payable under Kar Vivad Samadhan Scheme, 1998 without considering interest under Section 220(2) of the Income Tax Act, 1961.

Analysis:
The petitioner filed a petition seeking to quash a certificate dated 9.2.1999 and requested a fresh certificate under the Kar Vivad Samadhan Scheme, 1998 without including interest under Section 220(2) of the Income Tax Act, 1961. The petitioner had a history of assessments and penalties dating back to 1980-81. The petitioner made a declaration under the Kar Vivad Samadhan Scheme, 1998, determining the disputed income and penalty payable. The certificate issued to the petitioner included interest under Section 220(2) of the Act, which the petitioner objected to. The petitioner paid the amount under protest and filed a writ petition seeking relief. An affidavit filed by the Assistant Commissioner of Income Tax justified the levy of interest under Section 220(2) while issuing the certificate.

The petitioner was directed to produce a copy of the penalty order to verify the levy of interest. The petitioner argued that due to the passage of time and natural calamities, they were unable to provide the penalty order but referred to relevant sections and rules regarding the levy of interest. The petitioner cited three decisions from High Courts of Madras and Andhra Pradesh where similar claims were rejected, upholding the authority's power to add interest under Section 220(2) even if not quantified earlier under the Kar Vivad Samadhan Scheme, 1998. The court agreed with the decisions of the Madras and Andhra Pradesh High Courts, stating that the authority was within its rights to include interest under Section 220(2) in the certificate issued under the scheme.

In conclusion, the court dismissed the writ petition, finding no merit in the petitioner's contention. The court aligned with the decisions of the Madras and Andhra Pradesh High Courts, affirming the authority's power to add interest under Section 220(2) in the certificate issued under the Kar Vivad Samadhan Scheme, 1998. No costs were awarded in this judgment.

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