2005 (11) TMI 46

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....s entitled to the benefits of the Kar Vivad Samadhan Scheme, 1998 (in short "the Scheme"), and that her application to derive the benefits under the said Scheme was rejected by the second respondent by the order dated February 23, 1999. Paragraph 95(i)(a) of the said Scheme reads as under: "95. Scheme not to apply in certain cases.- The provisions of this Scheme shall not apply- (i) in respect of tax arrear under any direct tax enactment: (a) in a case where prosecution for concealment has been instituted on or before the date of filing of the declaration under section 88 under any direct tax enactment in respect of any assessment year, to any tax arrear in respect of such assessment year under such direct tax enactment or in re....

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.... filing of the declaration under section 88, her application came to be rightly rejected. The only other point raised before the learned judge was that the refusal of the appellant's offer for compounding the offence for the assessment year 1985-86 was the subject matter of challenge in the court. As far as the said contention was concerned, the learned judge found that such challenge by itself would not wipe off the factum of initiation of the prosecution. No other contention was raised before the learned single judge. Mr. Ravichandran, learned counsel for the appellant, contended before us that having regard to the compounding of the offence for the earlier assessment years, viz. 1980-81 to 1984-85, the very initiation of the prosec....

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....ther an assessee was entitled for deriving any benefit under the Scheme. As far as the initiation of the prosecution as regards the assessment years 1980-81 to 1984-85, there is no dispute. In fact, learned standing counsel for the Department submitted before us that the criminal case was pending in C.C. No. 816 of 1993 on the file of the Assistant Chief Metropolitan Magistrate (Economic Offences Court-I) Chennai. In such circumstances, when the appellant applied for the benefits under the said Scheme and when it was beyond the controversy that the criminal prosecution had already been initiated in respect of the relevant assessment years, the second respondent was fully justified in refusing to accept the appellant's application claiming b....