TMI Blog2006 (7) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... der sub-section (2) of section 90 of the KVSS, 1998, was passed as the appeal in that situation shall be deemed to have been withdrawn as provided under s.s. (4) of section 90 - - - - - Dated:- 20-7-2006 - Judge(s) : A. K. PATNAIK., N. K. MODY. JUDGMENT The judgment of the court was delivered by A.K. Patnaik C.J.- This is an appeal against the order dated November 20, 1995, passed by the Income-tax Appellate Tribunal, Indore Bench, Indore in Appeal No. IT(SS)A 84/Ind/1996 for the block year 1994-95 to November 20, 1995. The facts briefly are that the appellant (hereinafter referred to as the assessee) is a private limited company registered under the Companies Act, 1956. On November 21, 1995, the business premises of the assessee were searched and pursuant to a notice, the assessee filed an original return on July 2, 1996, disclosing nil income for the block period the assessment year 1994-95 to November 20,1995. Thereafter, it filed a revised return showing the income at Rs. 30,50,000 on November 26, 1996. The Assistant Commissioner of Income-tax, Circle-I, Indore, assessed the income at Rs. 30,50,000 on November 29, 1996, under section 158BC of the Income-tax Act, 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and thus, the appeal shall be treated to have never been filed and the Department is free to take action against the assessee. Thereafter, the assessee filed an application under section 254(2) of the Act for correction of the said order dated November 26, 2001, of the Tribunal and the ground taken in the said application filed by the assessee was that under sub-section (4) of section 90 of the Finance (No. 2) Act, 1998, the appeal should have been treated to have been withdrawn on the day on which the designated authority passed the order under sub-section (2) of section 90 of the Finance (No. 2) Act, 1998 i.e., April 28, 1999, and that the Tribunal in passing the order dated November 26, 2001, to the effect that the appeal of the assessee was not competent and void ab initio and is to be treated to have never been filed, exceeded its jurisdiction. The said application under section 254(2) of the Act was registered as M.A. No. 8/Ind/2003 and after hearing learned counsel for the parties at length, the Tribunal allowed the said M. A. by the impugned order dated January 16, 2004, and substituted paras. 10 to 12 of its appellate order dated November 26, 2001, with new paras 10 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact of such payment to the assessing authority along with proof thereof and the designated authority had thereupon issued the certificate to the assessee on April 28, 1999, under sub-section (2) of section 90 of the Finance (No. 2) Act, 1998, and, therefore, as per the provisions of sub-section (4) of section 90 of the Finance (No. 2) Act, 1998, the appeal of the assessee before the Tribunal is deemed to have been withdrawn on April 28,1999. He submitted that once an appeal is filed, it is to be treated as an appeal and the ineffectiveness, incompetency and merits of the appeal are not taken into account for the purpose of finding out as to whether the appeal had been filed and was pending before the concerned authority. He submitted that this view has also been taken by the Supreme Court while interpreting the provisions of sub-section (4) of section 90 of the Finance (No. 2) Act, 1998. In support of the aforesaid submissions, Mr. Chaphekar cited the decisions of the Supreme Court in Union of India v. Onkar S. Kanwar [2002] 258 ITR 761, Dr. Mrs. Renuka Datla v. CIT [2003] 259 ITR 258 and CIT v. Shatrusailya Digvijaysingh Jadeja [2005] 277 ITR 435. He finally submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) Act, 1998. Hence we refrain from pronouncing any opinion on the said contention raised by Mr. Jain, learned counsel for the Department. All that we have been called upon to decide in this appeal is whether the appeal of the assessee before the Tribunal against the assessment order was said to be pending at the time the order under sub-section (2) of section 90 of the Finance (No. 2) Act, 1998, was issued by the designated authority to the assessee and if so, whether such an appeal stood withdrawn when such an order was issued under sub-section (2) of section 90 of the Finance (No. 2) Act, 1998, by the designated authority. Section 90 of the Finance (No. 2) Act, 1998 is quoted hereinbelow: "90. Time and manner of payment of tax arrear.- (1) Within sixty days from the date of receipt of the declaration under section 88, the designated authority shall, by order, determine the amount payable by the declarant in accordance with the provisions of this scheme and grant a certificate in such form as may be prescribed to the declarant setting forth therein the particulars of the tax arrear and the sum payable after such determination towards full and final settlement of tax arrears: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted authority along with proof thereof and the designated authority shall thereupon issue the certificate to the assessee. It is not disputed before us that the aforesaid provisions of sub-section (2) of section 90 of the Finance (No. 2) Act, 1998, have been complied with and that upon compliance with the said provisions of sub-section (2), the designated authority had in fact issued a certificate to the assessee on April 28,1999. Sub-section (4) of section 90 of the Finance (No. 2) Act, 1998, quoted above provides, inter alia, that where the declarant has filed an appeal against an order or notice giving rise to tax arrears before any Tribunal, then notwithstanding anything contained in any other provisions of any other law for the time being in force, such appeal shall be deemed to have been withdrawn on the day on which the order referred to in sub-section (2) of section 90 of the Finance (No. 2) Act, 1998, is passed. While the case of the assessee is that the assessee had filed such an appeal before the Tribunal and such appeal was pending before the Tribunal on April 28, 1999, when the order under sub-section (2) of section 90 of the Finance (No. 2) Act, 1998, was passed, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has." Following the aforesaid decision of the Supreme Court in Dr. Mrs. Renuka Datla [2003] 259 ITR 258 the Supreme Court again held in CIT v. Shatrusailya Digvijaysingh Jadeja [2005] 277 ITR 435 (SC) that the object of the Kar Vivad Samadhan Scheme was to recover taxes in lot in pending litigations and if an appeal was pending on the date of filing of the declaration, it was not open to the designated authority to hold that the appeal was sham, ineffective or infructuous. The relevant portions of the said judgment of the Supreme Court in CIT v. Shatrusailya Digvijaysingh Jadeja [2005] 277 ITR 435 are quoted hereinbelow: "On the question of law, learned counsel invited our attention to section 95(i)(c) and submitted that the Scheme was a code by itself; that the object of the Scheme was to recover the taxes locked in the pending litigation and for the purposes of the applicability of the Scheme, appeals, references, revisions, writ petitions pertaining to the tax cases were all put at par under section 95(i)(c) of the Scheme. It was urged on behalf of the assessee that if a revision or an appeal was pending on the date of filing of the declaration under the scheme, it was not o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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