2004 (1) TMI 63

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....essment year 1995-96, he received certain foreign exchange from certain persons who are non-resident Indians. He did not submit any information about the foreign exchange in his returns. A survey was conducted in the office and residential premises in the year 1996. According to the petitioner, nothing transpired from out of the survey. He, while filing returns, indicated about the receipt of foreign exchange. Exemption was claimed in respect of NRI gifts. A search was carried out on February 20, 1997, at the office-cum-residential premises. Certain affidavits were seized in addition to certain xerox copies of the documents which has already been filed along with the income-tax return for the assessment year 1995-96. On October 16, 1997, Sr....

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.... the subject matter of survey on October 8, 1996. A return was filed by the second petitioner. A survey under section 132 was conducted and substantially the same steps have been taken as in the case of Sri A.S. Sengoda Gounder. The rest of the proceedings both on the basis of regular return, regular assessment for the assessment year 1995-96 and the block assessment have gone on in the same manner as in the case of petitioner No. 1. The block assessment pursuant to the notice under section 158BC was issued to the second petitioner. Declaration was rejected. The petitioner, aggrieved by the declaration is challenging the rejection of the Kar Vivad Samadhan Scheme application. The respondents have entered appearance. Parties are heard at ....

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....g in annexures "E" and "J". In the light of the argument of learned counsel, I have carefully perused the scheme. The scheme provides for definitions. We are concerned with a few definitions, namely, disputed tax and tax arrears. A combined reading of these two definitions would show that there should be a factual tax arrears which could be demanded legally in terms of the Act for the purpose of the scheme. There should be a legal determination in terms of the Act. Only in such cases, the scheme is available to a party for the purpose of settlement. Sri Parthasarathi, learned counsel argues that protective assessment and protective demand is well accepted and is tenable in law. At the outset, this argument is attractive and if strippe....

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....n the whole or so much of the total income as is relatable to the disputed tax. The term' disputed income' as used in the scheme does not refer to the income in dispute by way of appeal, etc., but it refers to the income which is relatable to the disputed tax. The term 'disputed tax' has been defined to mean the tax determined and payable but remaining unpaid on the date of declaration. The designated authority will work out the disputed income relatable to disputed tax by applying the marginal rate applicable for the relevant assessment year for that assessee and thereafter determine the sum payable in accordance with section 88 of the Scheme." Learned counsel for the respondent relies on the judgment of the Supreme Court reported in La....