TaxTMI 
TaxTMI 
2003 (2) TMI 24
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.... to pay penalty, particulars whereof are as follows: "Assessment year Penalty (Rs.) 1990-91 48,000 1991-92 52,000 1992-93 22,000 1994-95 23,200" The Kar Vivad Samadhan Scheme, 1998, came into force on September 1, 1998. Section 88 of the aforesaid scheme in so far as the same is material for our purpose provide....
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....made a declaration in respect of each of the aforesaid assessment years proposing to pay 50 per cent. of the penalty in accordance with section 88(a)(iv) of the aforesaid Scheme set out hereinabove. In pursuance of the aforesaid declaration the Department determined the sum payable by the petitioner by its order dated February 23, 1999, wherein it appears that the Department has added 50 per cent. interest on the amount of penalty under section 220(2) of the Income-tax Act from the date when the penalty was levied until March 31, 1998. The addition of interest was sought to be justified by the Department on the ground of a letter dated January 5, 1999, issued by the member (legislation) to the Chief Commissioner of Income-tax which reads as....
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.... the petitioner now being able to avail itself of the benefit of the aforesaid Scheme does not arise. This court was unable to accept the submission of Mr. Mullick in its entirety for the simple reason that it was not open to the Department to refuse the benefit of the Scheme to the petitioner by adding interest if that was not payable under the Scheme and in case the Department has done that, then it is the Department itself which has precluded the petitioner from making payment of the just amount payable under the Scheme but then again the fact remains that the petitioner has continued to enjoy the benefit of the amount which was payable under the Scheme. Therefore, the petitioner cannot be allowed to have this matter heard without first ....
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....so be evident from the provision contained in clause (iii) set out hereinabove. It would appear that even in case where the tax arrear includes income-tax, penalty and interest the amount payable is the specified percentage of the disputed income in spite of the fact that the determination earlier made obliges the assessee to pay penalty or interest as the case may be. This court is therefore of the view that the Scheme does not envisage payment of any interest even in a case where interest was levied at the time of assessment or at any other point of time of determination. In the case in hand no interest was determined at any point of time. The plain and simple meaning in my view is that where the tax arrear comprises of interest or penalt....