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Issues:
Validity of declaration under the Kar Vivad Samadhan Scheme, 1998 under the Finance Act, 1998. Analysis: The writ petition challenged the intimation by the respondent that the declaration filed under the Kar Vivad Samadhan Scheme, 1998 was invalid. The petitioner, a partnership firm, had faced an addition to its income on account of unexplained cash credits, which was later deleted by the Commissioner of Income-tax but restored by the Income-tax Appellate Tribunal. The petitioner filed a reference application seeking questions of law to be referred to the court. The Tribunal passed an ex parte order dismissing the application due to the petitioner's absence. The petitioner filed for a recall of this order, which was granted by the Tribunal. However, before the recall order, the respondent declared the petitioner's declaration under the KVS Scheme as invalid, stating the reference application was rejected on the same day. The key issue was whether the reference application was pending on the date of filing the declaration. The court noted that while the reference application was dismissed on the date of filing the declaration, the subsequent recall order by the Tribunal rendered the initial order non-existent. As a result, the impugned order rejecting the declaration based on the initial order also became ineffective. The court held that in the interest of justice, the impugned order should be vacated, and the matter should be reconsidered by the respondent in light of the fact that the reference application was pending on the date of filing the declaration. The court allowed the writ petition, with no order as to costs. The decision emphasized the importance of due process and ensuring that legal proceedings are conducted fairly and justly.
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