2005 (10) TMI 50

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..... petitioner in full and final settlement of liability for the three assessment years 1990-91, 1991-92 and 1992-93. The petitioner's case is that the first respondent has no authority to modify exhibit P7 which was accepted by the petitioner by making payment. The petitioner has relied on the decision of the Supreme Court in Smt. Sushila Rani v. CIT [2002] 253 ITR 775 and contended that the Commissioner has no power to modify exhibit P7 issued under the Kar Vivad Samadhan Scheme, 1998. I heard counsel for the petitioner and standing counsel for the Income-tax Department. Exhibit P11(a) is issued by the first respondent demanding 50 per cent, of the interest that was payable up to March 31, 1998, under section 222 of the Income-tax Act which .....

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..... vad Samadhan Scheme, 1998. Since the petitioner has admittedly not included interest under section 220(2) for settlement under Kar Vivad Samadhan Scheme 1998, the declaration was defective inasmuch as full liability was not shown there for settlement. Even though the Department is stated to have accepted exhibit P4 declaration by issuing exhibit P7, it is not known why tax is not demanded for the assessment year 1993-94 in spite of the petitioner declaring tax liability of Rs. 79,068 for that year. Obviously the Department does not accept existence of any tax liability for 1993-94 because under exhibit P7 demand shown under settlement is only interest. Therefore, the demand shown and payable under the Kar Vivad Samadhan Scheme under exhibit .....

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..... of mistakes and errors in the interest of justice. The case allowed by the Supreme Court is one where the Department had wrongly adjusted refund against demands which were not accepted by the assessee. This is not a case of any wrong adjustment of refunds against demands. This is a case where the petitioner committed error in filing declaration by omitting to include interest payable under section 220(2) up to March 31, 1998, without the inclusion of which liability cannot be settled under the Kar Vivad Samadhan Scheme and what the Department has now done vide exhibit P11(a) is to correct their order which is issued based on the declaration furnished by the petitioner. Even though standing counsel for the respondents opposed the challenge r .....

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