TaxTMI 
TaxTMI 
2016 (10) TMI 401
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....ng the petitioner under Section 132 of the Act on 10.1.1989. On the basis of search operations, the Assessing Officer completed assessment for the Assessment Years 1987-88, 1988-89 and 1989-90 on 31.3.1993. The petitioner preferred appeal against said order of the Assessing Officer. The Appellate Commissioner by his order dated 13.1.1994 set aside the assessment for the said years and asked the Assessing Officer to carry out fresh assessments. When the assessment proceedings after remand were thus pending before the Assessing Officer, the petitioner filed an application dated 24.11.1995 before the Settlement Commission under Section 245C of the Act for the above 3 years. 3. While such proceedings were pending before the Settlement Commission, the Assessing Officer passed the fresh order of assessment on 29.3.1996 for the same period. On 30.9.1996, the Settlement Commission admitted the petitioner's application in terms of Section 245D(1) of the Act. 4. While these proceedings were, thus pending before the Settlement Commission, the Parliament enacted the Kar Vivad Samadhan Scheme,1998 (hereinafter to be referred as 'the KVSS,1998') under Chapter-IV of the Finance Act ....
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....ficate, it was provided as under : "Now therefore, in exercise of the powers conferred by sub-section (2) of Section 90 read with Section 91 of the Finance (No.2) Act,1998 the designated authority here by issues this certificate to the said declarant. (a) certifying the receipt of payment from the declarant towards full and final settlement 90 read with determined in the order dated 12.4.99 on the declaration made by the aforesaid declarant. (b) granting immunity, subject to the provisions contained in the Scheme from instituting any proceeding for prosecution for any offence under.... or from the imposition of penalty under said enactment in respect of matters covered in the aforesaid declaration made by the declarant." 7. The petitioner thereafter urged before the Settlement Commission that for the same period, there cannot be separate proceedings for settlement. The Settlement Commission by the impugned order dated 25.6.1999 rejected the application, proceeded to decide the petitioner's application for settlement. The Commissioner passed an order under Section 245D(4) of the Act and determined the petitioner's gross total income at Rs. 56,952/-, Rs. 56,517/- and R....
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....ed the stage of being admitted for further hearing in terms of Section 245D(1) of the Act ? 13. We may refer to the statutory provisions. Chapter- XIXA was added to the Act by Finance Act,1987 with effect to 1.6.1987 and pertains to settlement of cases. Under subsection (1) of Section 245C, an assessee in a case relating to him, may make an application for settlement before the Commission in such manner as may be prescribed. The term 'case' has been defined under clause (b) of Section 245A and as it stood at the relevant time meant any proceeding under the Act for assessment or reassessment of any person in respect of any year or years or by way of appeal or revision in connection with such assessment or reassessment which may be pending before the Income-Tax authority on the date on which an application under sub-section (1) of Section 245C of the Act, is made. Thus, in terms of the provisions of Chapter- XIXA, as they stood at the relevant time, an assessee could make an application for settlement in connection with any proceedings pending for assessment or reassessment or any appeal or revision in connection with such assessment or reassessment. 14. On such an applicat....
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....ovision of any law for the time being in force, the amount payable under this Scheme by the declarant shall be determined at the rates specified hereunder, namely:- (a) Where the tax arrear is payable under the Income- Tax Act,1961 (43 of 1961),- (i) in the case of a declarant, being a company or a firm, at the rate of thirty-five per cent of the disputed income; (ii) in the case of a declarant, being a person other than a company or a firm, at the rate of thirty per cent of the disputed income; (iii) in the case where tax arrear includes incometax, interest payable or penalty levied, at the rate of thirty-five per cent of the disputed income for the persons referred to in clause (i) or thirty per cent of the disputed income for the persons referred to in clause (ii); (iv) in the case where tax arrear comprises only interest payable or penalty levied, at the rate of fifty per cent of the tax arrear; (v) where the tax arrear includes the tax, interest or penalty determined in any assessment on the basis of search and seizure proceedings under section 132 or section 132A of the Income-Tax Act,1961 (43 of 1961),- (A) in the case of a declarant, being a company or a firm,....
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....he day on which the order referred to in Sub-section (2) is passed: Provided that where the declarant has filed a writ petition or appeal or reference before any High Court or the Supreme Court against any order in respect of the tax arrear, the declarant shall file an application before such High Court or the Supreme Court for withdrawing such writ petition, appeal or reference and after withdrawal of such writ petition, appeal or reference with the leave of the court, furnish proof of such withdrawal along with the intimation referred to in Sub-section (2)." 20. Section 91 of KVSS,198 envisages the designated authority granting immunity from prosecution or penalty in respect of matters which are covered under the declaration under Section 88 of the KVSS,1998 once the conditions of Section 90 are satisfied. Section 92 provides, inter-alia, that no appellate authority shall proceed to decide any issue relating to the disputed chargeable expenditure, interest, income, wealth etc. in respect of which an order has been made under Section 90 by the designated authority. 21. Section 95 of the KVSS,1998 pertains to scheme not to apply in certain cases, relevant portion of which reads....
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....or penalty would lie nor appellate authority would proceed on any issue relating to such disputes. 24. In terms of such provisions, the petitioner could have applied for settlement since the order of assessment was already passed determining tax liability which had remained unpaid. Once such application was accepted, it is difficult to comprehend how the Settlement Commission would continue to enjoy the jurisdiction over the same subject matter, particularly when the settlement declaration was accepted by the designated authority and the petitioner also paid the taxes as per the directives of the designated authority. For the same period the Settlement Commission would not be allowed to process the application for settlement. Any other view would give rise to independent and separate proceedings for settlement; first under Chapter-XIXA of the Act and the second, under KVSS,1998. This could lead to incongruent results and a possible clash between orders by two separate authorities, a consequence legislature would ordinarily not be expected to bring about. 25. Whatever doubt one may have, would disappear when we look at the relevant portion of Section 95 of the KVSS,1998. To make t....