TMI Blog2018 (2) TMI 1596X X X X Extracts X X X X X X X X Extracts X X X X ..... ment. In view of the affidavit being silent on the date on which the adjustment was done, an adverse inference must be drawn that the adjustment, if any, had not taken place before filing of the declaration on 22nd December, 1998. Thus, on the date when the declaration was filed on 22nd December, 1998 tax arrears of ₹ 87/was payable by the petitioner to the Revenue and 40% of the disputed tax amount which would be ₹ 52/which would be payable under the Scheme. Thus, if the amount of ₹ 52/is paid, it would resulted in a complete waiver of the interest payable by the petitioner. Thus the collection of amounts on account of interest consequent to the Certificate dated 19th February, 1999 is outside the Kar Vivad Scheme and retention thereof by the State is without authority of law. Thus it would be appropriate to direct the respondent no.1 to modify / amend its Certificate dated 19th February, 1999 under Kar Vivad Scheme and grant a complete waiver of interest payable under the Act in view of there being tax arrears on disputed income as on the date of filing of the declaration. The petition is allowed in terms of prayer clause (b1). The respondent no.1 is direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessment Year 198485 the petitioner was assessed to tax by an assessment order dated 3rd March, 1993 under Section 143(3) r/w 148 of the Act to a total income of ₹ 7,20,540/as against the returned income of ₹ 10,790/. 5. Being aggrieved by the order dated 3rd March, 1993, the petitioner filed an appeal to the Commissioner of Income Tax (Appeals) [CIT(A)]. By an order dated 27th December, 1993, the petitioner's appeal was partly allowed determining the petitioner's income at ₹ 60,000/. Consequent to the above, on 18th January, 1994, the Assessing Officer passed an order giving effect to the order dated 27th December, 1993 of the Commissioner of Income Tax. This resulted in the petitioner being obliged to pay the following to the Revenue : Particulars Amount Tax 2,31,087/- Interest 3,10,816/- Total........ 5,41,903 6. In pursuance of the above demand dated 18th January, 1994, the petitioner paid during the period January to September, 1995, a total tax for ₹ 2,31,000/o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght to pay the tax arrears at 40% of the disputed income. The disputed income was computed under the Kar Vivad Scheme on the basis of the tax arrears outstanding as on 31st March, 2099. On payment of the tax at 40% of disputed income i.e. ₹ 52/sought complete waiver of interest. 9. Pending the consideration of the petitioner's declaration dated 22nd December, 1998 under the Kar Vivad Scheme, the petitioner learnt of the Delhi High Court decision in the case of All India Federation of Tax Practitioners Vs. Union of India, 236 ITR 01 . In the above case, the Hon'ble Delhi High Court while dealing with the constitutional validity of the Kar Vivad Scheme, partly allowed the petition by observing as under : To sum up, our conclusions are: (a) The proviso to section 92 is ultra vires article 14 of the Constitution as it results in creating two artificial classes between the same class of assessees, i.e., the litigating assessees in arrears ; (2) the definition of tax arrears in clause (m) of section 87 should be so read as to mean the amount of tax, penalty or interest determined by any competent authority on or before March 31, 1998, though such det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Certificate dated 19th February, 1999 works out the tax arrears for Assessment Year 1984-85 at interest of ₹ 6,58,152/as reflected in the declaration dated 22nd December, 1998 and determines the settlement of the interest payable at 50% thereof i.e. ₹ 3,29,071/. It completely ignores the amount of ₹ 87/of income tax which was unpaid on the date of filing the declaration. It works out the income tax payable in the Revenue's pending appeal at ₹ 1,37,356/(40% of the disputed income on the basis of the tax arrears of ₹ 2,31,655/). In view of the aforesaid figure being lost sight of in the Certificate, the petitioner was called upon to pay 50% of the disputed interest of ₹ 6,58,000/. It does not also grant waiver of interest despite holding that the petitioner is liable to pay 40% of the disputed income i.e. ₹ 1,37,064/in case of pending appeals of the Revenue (Declaration dated 22nd January, 1999). 13. Therefore, the petitioner by his letter dated 5th March, 1999 addressed to the respondent no.1 the Commissioner of Income Tax, invited his attention to the fact that the tax in arrears as reflected in the declaration dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complete waiver of interest under the Kar Vivad Scheme. However, the affidavit is silent on the date when the above adjustment of the pending tax arrears of ₹ 87/was made against the refund of ₹ 10,800/. 17. Mr. Gopal, learned Counsel appearing for the petitioner, in support of the petition, submits as under : (a) The Certificate dated 19th February, 1999 under the Kar Vivad Scheme as issued to the petitioner is a consolidated Certificate in respect of the two declarations dated 22nd December, 1998 and 22nd January, 1999 filed by the petitioner. Therefore, the contention of the Revenue as stated in the affidavit that there should be two separate declarations in respect of each of the pending appeals (Assessee's and Revenue's pending appeals), falls to the ground. If it was so then, in that case, it must follow that two separate Certificates ought to have been issued, one relating to the Department's appeal and the other relating to the tax arrears with regard to the assessee's appeal. This has not been done. It must follow that the Certificate has been issued on the basis of the revised declaration dated 22nd January, 1999 filed by the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by him. Once the consolidated Certificate has been issued, then, the option of seeking to settle one of the two declarations filed by the assessee is no longer available. 19. In any view of the matter, the above larger issue need not be addressed for the purpose of this petition. We proceed on the basis that it is open to dispose of two declarations by one Certificate. Nevertheless, we find that the declaration dated 22nd December, 1998 did mention the tax arrears of ₹ 87/as on the date of filing the declaration. We find that there is nothing on record to indicate that the tax arrears of ₹ 87/have been adjusted with the tax refund of ₹ 10,800/for the Assessment Year 199798. Mr. Gopal, learned Counsel for the petitioner has, on instructions, stated before us that till date the petitioner has not received any order passed under Section 245 of the Act by the authorities under the Act adjusting the tax arrears of ₹ 87/payable for Assessment Year 198485 with the refund of ₹ 10,800/. We also note that in the communication dated 10th March, 1998 in response to the petitioner's application dated 5th March, 1999 seeking modification of the Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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