TaxTMI 
TaxTMI 
2000 (2) TMI 57
X X X X Extracts X X X X
X X X X Extracts X X X X
....e between the parties that if in a case there is no tax arrears, then an assessee cannot make a declaration and no settlement can be made under the scheme. "Tax arrear" has been defined in s. 87 to mean in relation to direct tax enactment, the amount of tax, penalty or interest determined on or before 31st March, 1998, under that enactment in respect of an assessment year as modified in consequence of giving effect to an appellate order but remaining unpaid on the date of declaration. 3. As mentioned above, the petitioner's declarations which were five in number have been rejected by the Designated Authority on the ground that when the declarations were made on 31st Dec., 1998, there was no tax arrears, i.e., tax remaining unpaid against the petitioner. 4. The petitioner's contention is that there was an HUF in the name and style of Seth B.D. Gupta, HUF, which was being assessed to income-tax and wealth-tax. There was a partition in that family under which an industrial unit, viz., Modern Industries, fell to the share of Sri B.B. Bindal, a coparcener. The said Sri B.B. Bindal was the Karta of the present petitioner and under the terms of the partition, Sri B.B. Bindal was liable ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....int Commissioner refusing to allow the petitioner's application under s. 154. The CIT(A) by a consolidated order dt. 28th Jan., 1999, allowed the appeals and held that the impugned adjustment of refund under the IT Act against the wealth-tax demand for different years and in some cases of different assessees, were not legally correct. The CIT, therefore, cancelled the adjustments and the AO was directed to make fresh adjustments after following the procedure under s. 245 of the IT Act. After the decision of the CIT(A), the petitioner moved an application before the Designated Authority under the Kar Vivad Samadhan Scheme claiming that since the adjustments had been cancelled, the wealth-tax demand became outstanding on the date of the filing of the declarations and, therefore, the declarations may be proceeded with. The declarations were, however, rejected by the Designated Authority on the ground that on the date of the declaration, no amount was in arrears. The contention of the petitioner is that this view taken by the Designated Authority is wrong because the order passed by the CIT(A) would relate back to the date on which the petitioner's application under s. 154 was rejected....
X X X X Extracts X X X X
X X X X Extracts X X X X
....0 (W/T) 1,57,632 14-7-1993 1985-86 and 1986-87 1988-89 (W/T) 4,83,619 3-7-1992 --------- 20,19,553 ------------------------------------------------------------------------------------ Then it is stated that a sum of Rs. 6,87,652, in respect of the asst. yr. 1989-90 (Rs. 3,28,923), the asst. yr. 1988-89 (Rs. 1,80,914) and the asst. yr. 1987-88 (Rs. 1,77,815) was adjusted towards the wealth-tax demands against the assessee for the asst. yrs. 1990-91 an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or several years. In some instances for more than six years, the assessee raised no objection. After the scheme, i.e., Kar Vivad Samadhan Scheme was launched, the petitioner solely for acquiring eligibility to make a declaration challenged the adjustments of refunds towards the liabilities by moving separate applications for all the years. We may, for the sake of facility, reproduce below one of the applications which is for the asst. yr. 1988-89 as under : "Before the Dy. CIT (Asst), Meerut. In the matter of; Shri B.B.L. & Sons-Asst. yr. 1988-89, Sub : Petition for rectification of mistake arising out of wrong adjustments of refunds. Sir, For the abovementioned assessment year, against the demand created vide assessment order under the WT Act, certain adjustments have been made in respect of refunds becoming due under the IT and WT Acts of different assessees as under : ---------------------------------------------------------------------- Name of the assessee Status Tax Amount in Rs. ---------------------------------------------....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ary to the provisions of ss. 245 and 34A(5) of the IT Act and WT Act, respectively. Such adjustments, therefore, being wrong and based on mistaken view of specific statutory provisions, deserve to be reversed and the refund so adjusted deserve to be restored back to the file of the respective assessee who was entitled to refund. As a result of rectification, that is to say, reversal of the adjustments made whatever tax liability becomes due in the case of the present assessee may be intimated so that the same may be discharged by payment. It may also be stated that such refunds due to the respective assessee may be allowed only after the discharge of liability by the present assessee. In view of the above prayer, it is requested that the adjustment made may be reversed and the outstanding demand may be ascertained and intimated to the present assessee, to enable to avail the Samadhan Scheme in respect of disputes pending before the appellate Authority. Submitted for an early action." We have underlined the relevant portion of the application to show that the sole purpose of moving such applications was to enable the petitioner to avail of the benefits of the Kar Vivad Samadhan ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n this case, no prejudice is even alleged to have resulted to the petitioner whose own money due as the refund was adjusted towards its own liabilities. The adjustments did not cause any prejudice to the petitioner and that it knew fully well of the adjustments is evident from the fact that no such averments were made in the applications purporting to be moved under s. 154 and no other action was ever taken by the petitioner. As is averred in para. 5 of the writ petition, the last payment was made on 19th Feb., 1996, and according to the figures given in paras. 5 and 6 by those payments and adjustments made, there was an over payment of Rs. 20,000 and odd. Why did the petitioner stop making payment after 19th Feb., 1996. The reason simply was that the entire demands stood wiped out by the adjustments, No other reason has been given in the writ petition or before us at the hearing. The fact that after 19th Feb., 1996, the petitioner made no payment, unequivocally indicates that the adjustments were made to the knowledge of the petitioner and even if there was no prior consent, he consented to the same by not raising any objection and by not making any payment thereafter on the assum....