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Issues:
Validity of tax determination under Kar Vivad Samadhan Scheme, 1998. Analysis: The case involves a challenge to the validity of a tax determination made by the Commissioner of Income-tax under the Kar Vivad Samadhan Scheme, 1998. The petitioner contests the determination, arguing that it is contrary to Section 88 of the Finance (No. 2) Act, 1998. The dispute primarily revolves around a payment of Rs. 2,10,000 made by the petitioner on December 13, 1996, for the assessment year 1993-94. The petitioner bifurcated this payment towards income tax, interest, and total amount. The disputed income related to the disputed tax is calculated based on various payments made by the petitioner and adjustments sought by the Revenue. The Revenue intended to adjust the entire sum of Rs. 2,10,000 towards tax and set off any excess against interest. The clarification issued on the Kar Vivad Samadhan Scheme, 1998, stated that part payments are first appropriated towards tax and then towards interest. However, the court found this clarification to be against the scheme itself. The court emphasized that since the payment was made on the principal head as indicated in the challan, any reapportionment towards tax and interest contrary to the challan entries is not acceptable. In conclusion, the court allowed the writ petition, directing the opposite parties to issue a necessary certificate in accordance with the law while emphasizing that the payment allocation should align with the entries made in the challan. The judgment highlights the importance of adhering to the prescribed payment allocation and rejects any attempt to reallocate payments contrary to the original intent specified in the payment challan.
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