TaxTMI 
TaxTMI 
2003 (2) TMI 57
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....ere paid and an order of assessment was made on March 31, 1993, by the Assistant Commissioner of Income-tax, Central Circle-IV, Bangalore, determining the total income at Rs. 3,09,700 and assessed to tax with interest at Rs. 83,78,804. The petitioner preferred an appeal against the order of assessment before the appellate authority. The appeal was partly allowed in terms of the order, dated January 25, 1994. A second appeal was filed before the Appellate Tribunal, Bangalore, on June 28, 1994, and the appeal is pending. The Finance (No. 2) Act, 1998, introduced a Scheme called Kar Vivad Samadhan Scheme, 1998 ("the Scheme" for short). The said Scheme provided for settling arrears of tax, interest and penalty in relation to tax determined on or before March 31, 1998. It provided certain benefits and immunities from penalty and prosecution under the direct and indirect tax laws. The petitioner made a declaration in Form No. 1A as per annexure A. Respondent No. 2 accepted the declaration and a certificate of intimation under section 90(1) of the Scheme was issued on February 25, 1999. In the meanwhile, assessment proceedings for the assessment year 1989-90 were pending. The petiti....
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....es ; Writ Petitions Nos. 33434-35 of 1999 are filed by Sri D. Jairaj and Ranganatha Associates ; and Writ Petitions Nos. 33436-37 of 1999 are filed by Sri D. Vijayakumar and Ranganatha Associates. In all these petitions also the petitioners challenge rejection of their applications. The respondent-Department has filed a detailed counter-statement taking the same or a similar stand in all these cases. Sri Sarangan, learned senior counsel appears for the petitioners along with Sri E. S. Kiresur. Sri M. V. Sheshachala, learned standing counsel appears for the Income-tax Department. Sri P. S. Dinesh Kumar, Central Government standing counsel appears for the Union of India. Sri Sarangan, learned senior counsel argued at great length to contend that the Kar Vivad Samadhan Scheme, 1998, provides for certain immunities and certain protections in the matter of tax payment. In the case on hand, according to learned counsel, the Department is in excess of the amount tax paid by the petitioners by way of refund. Learned senior counsel would say that a reading of the Scheme would show that the adjustment is permissible. The word "pay" need not mean only factual cash payment but also would....
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....stment and the rejection of the same in terms of annexure J dated August 5, 1999. In all these cases, the Department after rejecting their request for adjustment, has chosen to issue endorsements stating therein that the petitions filed by the petitioners seeking benefit of the Scheme are rejected on the ground of non-payment of the tax within 30 days. In the light of the arguments of learned counsel on either side, two questions emerge for my consideration (1) Permissibility of adjustment/set off of refund available with the Department towards tax arrears in terms of the Scheme. (2) Time schedule in terms of section 90(2) of the Scheme. On point No. 1 re: adjustment: Sri Sarangan, learned senior counsel invited my attention to the Scheme itself to say that the Scheme is introduced for the laudable object of ending litigation and for collection of arrears of tax. Learned counsel says that the word "pay" under section 90 is to be understood as inclusive of adjustment of excess amount available with the respondents. Per contra, the Department says that no adjustment in these cases is allowed. The Scheme provides for the time and the manner of payment of tax arrears. It....
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....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)." Section 90(1) provides for determination by the designated authority of the declaration made under section 88 within 60 days. It provides for grant of a certificate in such form as may be prescribed to the declarant setting forth therein the particulars of tax arrear and the sum payable after such determination towards full and final settlement of tax arrears. In the event of any false information, a presumption is available in terms of the proviso to the effect that the declaration was never made by the declarant. Sub-section (2) of section 90 provides for payment of the sum determined by the designated authority within 30 days of passing of the order by the designated authority. In the case on hand, there is no difficulty of a declaration and there is no difficulty of a certificate. The question only revolves round payment within 30 days in terms of section 90(2) of the Act. The Act provides for any other mode of payment. Whether that mode ....
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.... counsel wants me to read section 245 into the Scheme for the purpose of payment in terms of section 90(2). I am unable to accept this submission. The Scheme is an independent Scheme and a self-contained Scheme. Courts cannot introduce what is not available in the Scheme in the case on hand. The clarification as referred to has to be understood as against the demand of the previous order and it cannot be understood as an adjustment of refund towards tax arrears. In fact, the respondents have clarified to me that the said adjustment is permissible at the instance of the Assessing Officer, Deputy Commissioner (Appeals), Commissioner (Appeals) or the Chief Commissioner. It also provides for an intimation to the petitioner. In the case on hand, learned counsel for the respondents points out that the designated authority has been defined to mean "Commissioner of Income-tax" and an officer notified by a Chief Commissioner for the purpose of the Scheme. In the light of the definition of the "designated authority", it is not possible for other officers to provide for any adjustment in terms of section 245 of the Act. Therefore, the respondents are right in saying that a close reading of th....
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.... the date of declaration a revision in respect of the order determining the tax demand out of which the whole or part sum remains unpaid, is pending. Whether the revision has merit or will be successful, is not his domain. That is the domain of the revising authority. That jurisdiction he may not be called upon to exercise if on determining the amount payable under the Scheme the assessee deposits the same within the time prescribed. Because in such event the revision is deemed to be withdrawn under section 90(4) of the Finance (No. 2) Act of 1998. An authority discharging both the functions cannot by deciding a pending revision on merit and reflect that order on merit while acting as designated authority. This is precisely what has been done in the present case." The said Division Bench has noticed the role of the designated authority vis-a-vis other officers. Therefore, I am of the view that the argument of Mr. Sarangan, learned senior counsel for the petitioners, with regard to adjustment in terms of section 245 is not permissible in the given set of facts, particularly in the light of the Scheme. The argument to the effect that the instructions are binding on the Department ....
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.... delay can be condoned. The Bombay High Court noticing Smt. Laxmi Mittal's case [1999] 238 ITR 97 (P&H) and E. Prahalatha Babu's case [2000] 241 ITR 457 (Mad) also has ruled that the Scheme is for the benefit of the assessee and a beneficial interpretation has to be given to it, and the word "shall" may be interpreted as "may". The court ruled that the explanation for delay can be condoned. However, a learned single judge of this court in the case of Smt. Atamjit Singh v. CIT [2001] 247 ITR 356 noticed Smt. Laxmi Mittal's case [1999] 238 ITR 97 (P&H) and has categorically ruled that this court disagrees with the said view of the Punjab and Haryana High Court. The said judgment is confirmed by the Division Bench of this court in [2001] 252 ITR 233 (Smt. Atamjit Singh v. CIT). The Supreme Court has now set at rest the entire controversy in a recent judgment in the case of Hemalatha Gargya v. CIT [2003] 259 ITR 1. The Supreme Court in Hemalatha Gargya's case [2003] 259 ITR 1 has specifically overruled Smt. Laxmi Mittal's case [1999] 238 ITR 97 (P&H) and E. Prahalatha Babu's case [2000] 241 ITR 457 (Mad). In the light of the overruling of these two judgments and in the light of this co....
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.... mandatory (see Maqbul Ahmad v. Onkar Pratap Narain Singh, AIR 1935 PC 85, 88). Besides the Scheme has conferred a benefit on those who had not disclosed their income earlier by affording them protection against the possible legal consequences of such non-disclosure under the provisions of the Income-tax Act. Where the assessees seek to claim the benefit under the statutory Scheme they are bound to comply strictly with the conditions under which the benefit is granted. There is no scope for the application of any equitable consideration when the statutory provisions of the Scheme are stated in such plain language. Seen from the angle of the designated authority, which is created under the Scheme, it is clear that the authority cannot act beyond the provisions of the Scheme itself. The power to accept payment under the Scheme has been prescribed by the statute. There is no scope for the Revenue authorities to imply a provision not specifically provided for which would in any way modify the explicit terms of the Scheme." The apex court further observes : "In none of the decisions of the High Courts which have held that the time prescribed under section 67(1) was not rigid....
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.... court has no option but to reject the theory of equity and also deny the benefit of extension to the petitioner for the purpose of the benefit under the Scheme, particularly when payments are not made within the time-frame of 30 days in terms of the Scheme. In the circumstances, and in the given set of facts, I have no hesitation in holding that the impugned endorsement does not require my interference. The petitioners' case cannot be considered in the light of a clear ruling in favour of the Revenue and against the petitioners. Sri Sarangan, learned senior counsel, however, invited my attention to a subsequent judgment in Hemalatha Gargya v. CIT [2003] 259 ITR 1 (SC), to contend that extension can be granted. Though extension can be granted in terms of the recent judgment of the Supreme Court in the given set of facts, extension cannot be granted on the facts of this case in the light of non-availability of adjustment clause and in the light of non-payment within the timeframe of 30 days. Sri Sarangan, learned senior counsel, however, tried to distinguish the said judgment of the Supreme Court by contending that there is a difference between the Voluntary Disclosure of Inco....