TaxTMI 
TaxTMI 
2020 (6) TMI 642
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....te of Intimation issued under Section 90 (1) of the Finance (No.2) Act, 1998 under Kar Vivad Samadhan Scheme Rules 1998, dated 26/2/99. (d) This Hon'ble Court be pleased to issue Writ of Mandamus or any other writ or order in the nature of Mandamus against the Respondents directing them to consider the Petitioners' case for Kar Vivad Samadhan Scheme and accord the benefit there under as may be applicable to the Petitioners. (e) This Hon'ble court be pleased to direct the Respondents to adjust the illegally appropriated sum of Rs. 3,11,206/- towards the tax liability if any fixed under the Kar Samadhan Scheme for the tax dispute / arrears of the A.Y. 1987-88. (f) Pending the hearing and final disposal of the Petition the Respondents, their officers and their employees be restrained from recovering any amount from the Petitioners by way of tax, interest or penalty under the Income Tax Act, 1961 in respect of A.Y. 1987-88 pursuant to the letter dated 19-7-91 at Exhibit 'A' to the Petition or under any further order. (g) Ad-interim order in terms of prayer (f) may be granted. (h) Such other and further relief as the nature and circumstances ....
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....total loss of Rs. 28,890.00. The Assistant Commissioner of Income Tax in assessment under Section 143 (3) of the Income Tax Act, 1961 (hereinafter for brevity referred to as "the Act") disallowed the aforesaid loss shown by the petitioner and determined income of the petitioner at Rs. 7,83,760.00 and fixed the tax liability at Rs. 3,11,206.00 for the assessment year 1987 - 88. The petitioner filed appeal before the Commissioner of Income Tax (Appeals) ("CIT (Appeals)" in short and hereinafter referred to as the "first Appellate authority") which was partly allowed. Being aggrieved the petitioner filed further appeal before the Income Tax Appellate Tribunal (hereinafter referred to as the "Tribunal"). This second appeal before the Tribunal came to be dismissed subsequently on 28.02.2001 (as stated in the petition). Hence, the tax liability of the petitioner for the assessment year 1987-88 of Rs. 3,11,206.00 became final. 3.2. However during the pendency of the above second appeal before the Tribunal, the petitioner received a demand notice dated 19.07.1991 from the Tax Recovery Officer - 29 calling upon the petitioner to make payment of composite tax demand for two years, viz. Rs....
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.... recovery proceedings and not towards any specific demand relating to income tax. He submitted that the demand notice dated 19.07.1991 as received from the Tax Recovery Officer was in respect of two outstanding demands, namely, Rs. 3,11,206.00 for assessment year 1987 - 88 and Rs. 9,33,020.00 for assessment year 1985 - 86. He submitted that pursuant to the application made by the petitioner under the Kar Vivad Samadhan Scheme for assessment year 1987-88, Revenue was not justified in adjusting the deposit amount of Rs. 6,00,000.00 against the outstanding liability of the petitioner and no appropriation should had taken place. He submitted that it was incorrect on the part of the Revenue to appropriate Rs. 3,11,206.00 towards the outstanding tax liability of assessment year 1987 - 88. He submitted that if at all the Revenue had to adjust any amount, the adjustment / appropriation by the Tax Recovery Officer should have first been towards outstanding liability of assessment year 1985 - 86 and only after satisfaction of the said liability, the liability of assessment year 1987 - 88 ought to have been satisfied. He submitted that by appropriating and adjusting an amount of Rs. 6,00,000.....
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....standing demand as per the Certificate of Intimation dated 26.02.1999. 6. The present petition has been filed to declare that the appropriation of Rs. 3,11,206.00 out of the deposit amount was illegally done by the Revenue. The notice of demand dated 19.07.1991 as it stood issued by the Revenue was in respect of two assessment years namely 1985 - 86 (Rs. 9,33.020.00) and for assessment year 1987- 88 (Rs. 3,11,206.00). So far as assessment year 1987 - 88 is concerned, the petitioner applied under the Kar Vivad Samadhan Scheme and the liability of the petitioner @ 50% of the total liability was determined at Rs. 6,16,838.00 towards penalty and interest only. The letter dated 24.3.1999 has taken into cognizance the declaration dated 29.12.1998 filed by the petitioner in form 1A under the Kar Vivad Samadhan Rules and the subsequent Certificate of Intimation dated 26.02.1999 issued by the Revenue to the petitioner. 7. We may state that the present writ petition was primarily filed as a sequel to earlier two writ petitions bearing writ petition No.2492 of 1991 and writ petition No.2493 of 1991, in which this Court was pleased to pass a common order on 13.08.1991, which reads....
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....t appears that the said amount was the crystallized final tax demand that was mentioned in the demand notice dated 19.07.1991. However, on the petitioner filing and availing benefit of the Kar Vivad Samadhan Scheme, the Revenue issued the Certificate of Intimation for the same showing the total outstanding demand towards interest and penalty that was liable to be paid by the petitioner @ 50% i.e. Rs. 6,16,838.00. Thus, the liability of the petitioner in so far assessment year 1987-88 was concerned was crystalized and determined under the Kar Vivad Samadhan Scheme at Rs. 6,16,838.00. As against this, the Revenue had already adjusted and appropriated the amount of tax demand of Rs. 3,11,206.00 out of the deposit of Rs. 6,00,000/- made by the petitioner in October 1991. It is to be noted that, in so far this demand of Rs. 3,11,206.00 was concerned it was only towards the tax demand payable by the petitioner. The amount of penalty and interest payable by the petitioner under Section 220(2) read with Sections 271(1)(a), 271(1)(b) and 271(1)(c) was computed @ 50% i.e Rs. 6,16,838.00 by the Commissioner of Income Tax, City - XIV, Mumbai in 1999 as due and payable by the petitioner under t....