2018 (2) TMI 1528

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....f Finance (No.2) Act, 1998. The impugned certificate dated 3 February 1999 did not accept the declaration filed by the Petitioner under Section 88 of the Samadhan Scheme stating that the tax payable is Rs. 20,56,855/- and determined the amount of tax payable at Rs. 26,93,414/- under Section 90(1) of the Samadhan Scheme i.e. the tax payable at 35% of the disputed income of Rs. 76,95,469/-. 2. For the Assessment Year 1995-96, the Assessing Officer by an order dated 31 December 1997 under Section 143 (3) of the Act determined the Petitioner's income at Rs. 5.10 Crores. As against an income declared of Rs. 4.08 Crores in the return of income. The tax arrears in the Income Tax computation form by the Revenue, the tax determined at Rs. 8.3....

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....date of filing the declaration was Rs. 27,03,296/-/. The disputed income on that basis was Rs. 58.76 lakhs resulting is the tax payable @ 35% of the Scheme was Rs. 20.56 lakhs. 6. On 3 February 1999, the Respondent No.1 issued the impugned certificate under Section 90(1) of the Samadhan Scheme not accepting the Petitioner's declaration dated 8 December 1998 and holding that the amount payable under the Samadhan Scheme was Rs. 26,93,414/-. The aforesaid determination of tax payable at Rs. 26.93 lakhs was arrived at by the designated authority, reducing the amount of interest payable of Rs. 9,04,256/- under Section 234 B of the Act till 27 November 1995 out of the self assessment tax of Rs. 11,26,081/- paid by the Petitioner along with....

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....unt of Rs. 11.26 has been adjusted against outstanding payment of tax to arrive at Rs. 45.25 lakhs and not adjusted against the interest payable under Section 234 B of the Act; and (c) In any event, the impugned certificate dated 3 February 1999, is contrary to the instructions dated 3 September 1998 issued under Section 96 of the Samadhan scheme by Central Government to all the Commissioners of Income Tax - Designated Authority under the Samadhan Scheme. In the above instruction it has been clarified that the where the tax arrears comprise tax and interest both, then part payment would be appropriated first towards principal tax and only thereafter towards the interest. 9. Mr. Walve for the Respondent supports the impugned certificat....

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....d to interest payable. In particular question 4 and answer thereto as mentioned in the above clarification is reproduced below:- Question No.4 :- Where the tax arrear comprises tax and interest, how will the part payment be first appropriated towards tax or interest? Answer :- The part payments are appropriated first towards tax and then towards interest. 11. The Affidavit in Reply dated 9th April 1999 by the Respondent No.1 - the Designated Authority itself in terms states that it has worked out the amount payable for the purpose of certificate dated 3 February 1999 by first adjusting the part payment made towards interest and only thereafter is balance amount of Rs. 96,844/- out of advance tax was adjusted towards tax payable. Th....