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Issues Involved:
1. Legality of the rejection of declarations under the Kar Vivad Samadhan Scheme. 2. Whether there was "tax arrear" on the date of filing the declaration. 3. Whether there was an appeal pending in respect of such tax arrear. Summary: Issue 1: Legality of the rejection of declarations under the Kar Vivad Samadhan Scheme The petitioner challenged the rejection of their declarations filed u/s 88 of the Finance Act, 1998, under the Kar Vivad Samadhan Scheme. The respondent rejected the declarations on three grounds: (1) No arrears existed as of March 31, 1998, (2) The pending appeal was only on the levy of interest, which had been waived, and (3) The arrear sought to be settled related to a demand raised on December 31, 1998, which was different from the arrear demand. Issue 2: Whether there was "tax arrear" on the date of filing the declaration The court examined whether the petitioner could avail of the scheme's benefits by analyzing the existence of "tax arrear" as defined in section 87(m) of the Act. The court found that the "arrear of tax" on the date of declaration arose from determinations made after March 31, 1998, and not before. The fresh assessments made on December 31, 1998, were based on the petitioner's concession and did not constitute "tax arrear" as defined. The court rejected the argument that the fresh assessment should relate back to the original assessment date. Issue 3: Whether there was an appeal pending in respect of such tax arrear The court noted that the appeals pending before the Income-tax Appellate Tribunal were not relevant as they had become infructuous due to the waiver of interest and the petitioner's concession during fresh assessments. The court emphasized that an ineffective or infructuous appeal does not qualify as a pending appeal within the meaning of section 95(i)(c) of the Act. Conclusion: The court concluded that the reasons given by the Commissioner of Income-tax for rejecting the declarations were legally sustainable. The fresh assessments made on December 31, 1998, did not give rise to "tax arrear" eligible for settlement under the scheme. Consequently, the writ petitions were dismissed, and no costs were awarded. Writ Petition No. 14262 of 1999: In this case, the petitioner, a private trust, faced similar issues. The court noted that the tax demand outstanding on March 31, 1998, was wiped out after the assessment was set aside in April 1998, and a fresh assessment was made in October 1998. The court held that there was no "tax arrear" or pending appeal related to the tax arrear on the date of filing the declaration. Consequently, the writ petition was dismissed, and no costs were awarded.
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