TaxTMI 
TaxTMI 
2006 (7) TMI 140
X X X X Extracts X X X X
X X X X Extracts X X X X
....mber 29, 1996, under section 158BC of the Income-tax Act, 1961 (for short "the Act"). Aggrieved, the assessee preferred an appeal on December 30, 1996, before the Income-tax Appellate Tribunal, Indore Bench, Indore (for short "the Tribunal") under section 253 of the Act. When the appeal was pending before the Tribunal, the Kar Vivad Samadhan Scheme, 1998 (for short "the KVSS") was introduced by the Finance (No. 2) Act, 1998. The assessee submitted an offer for settlement under the Kar Vivad Samadhan Scheme and submitted a declaration under section 89 of the Finance (No. 2) Act, 1998, on January 30, 1999, in the prescribed Form No. 1A in respect of the block period 1994-95 to November 22, 1995. The Commissioner of Income-tax, Indore (hereinafter referred to as the "designated authority") determined the amount payable and issued a certificate on February 25, 1999, under section 90(1) of the Finance (No. 2) Act, 1998, setting forth therein the particulars of the tax arrears and the sum payable towards full and final settlement of the tax arrears and the assessee paid an amount of Rs. 13,72,700 by challan as directed in the said certificate and intimated the fact of such payment to th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....late order dated November 26, 2001, with new paras 10 and 11 holding that as the assessee had opted for the Kar Vivad Samadhan Scheme, 1998, and had paid the taxes settled thereunder, the appeal has to be treated as dismissed. In a separate appeal filed by the Department against the said order dated January 16, 2004, we have today delivered an order holding that the aforesaid order dated January 16, 2004, passed by the Tribunal was outside the scope and purview of section 254(2) of the Act which was confined only to rectification of any mistake apparent from the record and have set aside the said order dated January 16, 2004, of the Tribunal. Since we have set aside the order dated January 16, 2004, the appellate order dated November 26, 2001, will now come into force. This appeal of the assessee is against the said appellate order dated November 26, 2001, of the Tribunal. At the time of admission of this appeal on July 24, 2002, the court had formulated the following substantial questions of law for decision: "(1) Whether the Appellate Tribunal erred in law in hearing and deciding the appeal on the merits even when an order under sub-section (2) of section 90 of the Kar Vivad S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Jadeja [2005] 277 ITR 435. He finally submitted that in view of the clear provisions of section 90(4) of the Finance (No. 2) Act, 1998, and the decisions of the Supreme Court cited by him, this court should hold that the appeal of the assessee pending before the Tribunal is deemed to have been withdrawn with effect from April 28, 1999, and accordingly, answered the two substantial questions of law formulated by the court by order dated July 24, 2002. Mr. R.L. Jain, learned senior counsel for the Department, on the other hand, submitted that since the assessee had disclosed the income of Rs. 30,50,000 in its revised return and the assessment was made on the basis of such revised return, the assessment order was really a consent order. He submitted that under section 253 of the Act, any assessee aggrieved by an order, may appeal to the Tribunal against such order. He argued that in this case since the order of assessment had been passed on consent of the assessee, the assessee is not aggrieved by the assessment order and hence cannot file any appeal against the assessment order before the Appellate Tribunal and, therefore, the appeal was void ab initio and was not competent and the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....owards full and final settlement of tax arrears: Provided that where any material particular furnished in the declaration is found to be false, by the designated authority at any stage, it shall be presumed as if the declaration was never made and all the consequences under the direct tax enactment or indirect tax enactment under which the proceedings against the declarant are or were pending shall be deemed to have been revived: Provided further that the designated authority may amend the certificate for reasons to be recorded in writing. (2) The declarant shall pay the sum determined by the designated authority within thirty days of the passing of an order by the designated authority and intimate the fact of such payment to the designated authority along with proof thereof and the designated authority shall thereupon issue the certificate to the declarant. (3) Every order passed under sub-section (1), determining the sum payable under this scheme, shall be conclusive as to the matters stated therein and no matter covered by such order shall be reopened in any other proceeding under the direct tax enactment or indirect tax enactment or under any other law for the time being in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nance (No. 2) Act, 1998, was passed, the case of the Department, on the other hand, is that such an appeal could not have been filed by the assessee against the order of assessment which was made on the concession of the assessee. In Dr. Mrs. Renuka Datla [2003] 259 ITR 258 (SC) cited by Mr. Chaphekar, a modified demand was raised on the assessee pursuant to the orders passed by the Commissioner of Income-tax (Appeals) and such a modified demand was not paid by the assessee on the date when the declaration was filed and the Supreme Court held that whether the modified demand is a result of concession or otherwise is not a relevant consideration for the purposes of section 87(m) of the Finance (No. 2) Act, 1998, which defines the expression "tax arrears" for the purpose of the Kar Vivad Samadhan Scheme. The Supreme Court further held that tax arrears in respect of which an appeal is pending would be entitled to the benefit of the Kar Vivad Samadhan Scheme and further, if an appeal is pending, it is not for the designated authority to question the possible outcome of the appeal nor for the High Court to hold that the appeal was sham, ineffective and infructuous. The relevant portion....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ation under the scheme, it was not open to the DA to hold that the appeals/revisions were sham, ineffective or infructuous. In this connection, reliance was placed on the judgment of this court in the case of Dr. Mrs. Renuka Datla v. CIT [2003] 259 ITR 258. The basic point which we are required to consider in this case is the meaning of the word 'pending' in section 95(i)(c) of the said scheme ... In the case of Dr. Mrs. Renuka Datla [2003] 259 ITR 258, this court has held on interpretation of section 95(i)(c) that if the appeal or revision is pending on the date of the filing of the declaration under section 88 of the Scheme, it is not for the designated authority to hold that the appeal/revision was 'sham', 'ineffective' or 'infructuous' as it has." In the aforesaid judgment in CIT v. Shatrusailya Digvijaysingh Jadeja [2005] 277 ITR 435, the Supreme Court has also relied on its decision in Raja Kulkarni v. State of Bombay reported in [1953-54] 5 FJR 677; AIR 1954 SC 73 and has held that all that is to be considered is as to whether the appeal was pending and there was no need to introduce the qualification that it should be a valid or a competent appeal. The relevant paragraph....