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TMI Blog2006 (4) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... lly acceptance of a declaration submitted by the assessee (appellant herein) under the KVS Scheme in full and final satisfaction of the demands for the year in question in an appeal filed by assessee ? (2) Whether the Income-tax Appellate Tribunal was right in holding that a separate declaration under the KVS Scheme was required to be filed in the case of an appeal filed by the Department and in the absence of not filing such a declaration by the assessee, the appeal filed by the Revenue will have to be heard on its own merits ? (3) Whether the Income-tax Appellate Tribunal acted contrary to the law, when it refused to follow its earlier decisions taking the view in favour of the assessee on the identically situated facts ? 3. The appellant-assessee is engaged in the business of construction and in the years 1991-92, 1992-93 and 1993-94, the assessee had, inter alia, under-taken construction of the building known as "Dawa Bazar" in which in the above assessment years, the assessee had indicated certain investments. Not satisfied with the investment shown by the assessee, the Income-tax Officer had got the valuation done and come to the conclusion that the investment in the buil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rosecution on payment of arrears of direct tax at the current rates." 5. Prompted by the assurance given and the provisions of the scheme, the appellant duly made a declaration to the designated authority in accordance with the provisions of section 89 in respect of tax arrears and after payment of tax in accordance with the said scheme, a due certificate was issued to him by the designated authority in accordance therewith. Acting upon the provisions of the scheme, an application was filed before the ITAT for dismissing the appeals pending before it. The ITAT, however, was of the view that the composition of the amount under the scheme and the certificate granted thereunder did not have any adverse effect on the pending appeals of the Department and rejected the preliminary objection. It is against the rejection of the said preliminary objection that the present appeals have been filed which have been admitted on the questions hereinabove stated. 6. Learned counsel for the appellant has submitted that there was a purpose of the scheme as reflected by the speech of the Finance Minister. Even in the Finance (No. 2) Act. 1998 (hereinafter referred to as the "Finance (No. 2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ils with regard to the remedies resorted to by the Department against the assessee including remedy against the order reducing the liability by any lower authority and other information consistent with the object of the Act. 9. Section 90 provides that within 60 days from the date of receipt of the declaration under section 88, the designated authority shall grant a certificate in such form and setting forth such particulars therein with regard to the tax arrear and the sum payable after determination towards full and final settlement of tax arrears. As the controversy devolves around the provisions of sections 90, 91 and 92, for ready reference these provisions are being reproduced hereunder (see [1998] 232 ITR (St.) 31, 83) : "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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nactment or indirect tax enactment, or from the imposition of penalty under any of such enactments, in respect of matters covered in the declaration under section 88. 92. Appellate authority not to proceed in certain cases.—No appellate authority shall proceed to decide any issue relating to the disputed chargeable expenditure, disputed chargeable interest, disputed income, disputed wealth, disputed value of gift or tax arrear specified in the declaration and in respect of which an order had been made under section 90 by the designated authority or the payment of the sum determined under that section : Provided that in case an appeal is filed by a Department of the Central Government in respect of such issue relating to the disputed chargeable expenditure, disputed chargeable interest, disputed income, disputed wealth, disputed value of gift or tax arrear (except where the tax arrear comprises only penalty, fine or interest), the appellate authority shall decide the appeal irrespective of such declaration." 10. Learned counsel for the appellant contends that under sub-section (4) of section 90 of the Finance (No. 2) Act the appeal or reference or reply filed by the parties shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt or the Tribunal. (3) The rest of the scheme is intra vires the Constitution." 12. Though learned counsel for the Revenue has vehemently argued that the decision of the Delhi High Court should not be taken as conclusive in view of the decision of the Andhra Pradesh High Court in Dr. (Mrs.) Renuka Datla v. CIT [1999] 240 ITR 463, we find that the case relied upon by learned counsel is distinguishable. In the said case there was no tax arrear against the assessee within the meaning of clause (m) of section 87 nor any disputed tax or income on the date of the declaration. Also, no appeal was pending on the date of filing of declaration in respect of the tax arrears for the clearance of which the petitioner could have sought resort to the scheme. It is, therefore, not a case where a person had legitimately sought relief under the scheme and was granted a declaration from which consequences flowed. Our attention has also been drawn to the circular of the Central Board of Direct Taxes, in which the respondents have them-selves clarified that they have decided to follow the judgment of the Delhi High Court. Since it is a short press note/release, the same is extracted hereinbelow ([19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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