TaxTMI 
TaxTMI 
2005 (8) TMI 278
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....efundable to it. Assessment in its case for asst. yr. 1992-93 had been earlier finalized at an income of Rs. 6,53,620 vide order under s. 143(3) of the IT Act, 1961 ("Act" hereinafter) dt. 22nd Feb., 1995, in terms of which a sum of Rs. 1,13,989 was, as claimed, payable by it, as at 31st March, 1998. The said assessment stood impugned by it before the higher appellate authorities, and was purportedly pending before the Tribunal as on 31st Dec., 1998. To settle the said dispute, and consequently, the concomitant tax arrears, it filed a declaration with the Designated Authority, Ahmedabad, under s. 88 of the Finance (No.2) Act, 1998, in Form 1A stating the prescribed particulars, with evidence (including that in respect of the matter being in....
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...., i.e., ITO, Ward 5(3), Ahmedabad, who vide his order dt. 31st May, 2002 passed under s. 154 of the Act, rejected the assessee's application stating that the entire refund of Rs. 1,17,184 as due in respect of asst. yr. 1997-98 stood adjusted against the outstanding balance of the demand of Rs. 1.24,323 raised for asst. yr. 1992-93 on 22nd Feb., 1995 per order under s. 143(3), on 4th Feb., 1998. A reference was also made therein to other miscellaneous refunds for asst. yrs. 1994-95 to 1996-97 (aggregating to Rs. 3,619) which also stood adjusted, prior to 4th Feb., 1998, against the demand for asst. yr. 1992-93, so that the outstanding demand as at 4th Feb., 1998 in respect of asst. yr. 1992-93 stood, i.e., after adjustment, only at Rs. 3,520....
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....n law. Thirdly, it was contended that its application under s. 88 of the Finance (No.2) Act, 1998 (KVSS), was, in terms of its provisions; mandatorily required to be vetted by the Designated Authority through the AO, and it was only on such validation that it was, per an intimation (Form 2A), called upon to pay an amount (Rs. 10,360) as determined and stated therein, in full and final settlement of its tax arrears for the relevant assessment year (asst. yr. 1992-93), with the issue of a final certificate (in Form 3) consequent to such payment, being the final and conclusive proof of the settlement aforesaid. As no refund for asst. yr. 1997-98 stood reduced in the determination of the tax arrears of Rs. 1,13,989 (for asst. yr. 1992-93) settl....
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.... while the declaration under KVSS stood submitted on 31st Dec., 1998. 6. We have heard the rival submission and perused the material on record as well as the case law cited. We find the record of the Department as exhibiting a very poor state of its maintenance by it, besides a flagrant violation of the law it is supposed to administer. As held by many a High Court [State Bank of Patiala vs. CIT & Anr. (1999) 154 CTR (P&H) 156 : (1999) 239 ITR 421 (P&H), A.N. Shaikh & Ors. vs. Suresh B. Jain (1986) 58 CTR (Bom) 204: (1987) 165 ITR 86 (Bom), Shiv Narain Shivhare vs. Asstt. CIT (1996) 135 CTR (MP) 365 : (1996) 222 ITR 620 (MP), etc.], and now by the Hon'ble Supreme Court, the provision of s. 245 of the Act is mandatory in nature, so that w....
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....tanding demand in respect of asst. yr. 1992-93 as at 31st Dec., 1998 at Rs. 3,520 (vide his order dt. 31st May, 2002) clearly exhibits that no such adjustment had been carried by the Department in its records, atleast upto January, 2002, as well as the poor maintenance of its records, as mentioned earlier. Patently, there being no adjustment of the refund for asst. yr. 1997-98, admittedly due to the assessee, in the determination of the tax arrears for asst. yr. 1992-93, as conclusiveiy settled, the right of the assessee to be granted the same as per law is unexceptional and unequivocal. 7. In view of the foregoing, we find no merit in the order of the learned CIT(A), which is reversed, with the direction that the assessee be issued a re....