2010 (8) TMI 491 - HC - Income Tax

Arrear of tax - Kar Vivad Samadhan Scheme (KVSS) - It is the case of the petitioners that they received the intimation dated February 3, 1999 under section 90(1) of the Act on March 17, 1999, and thereafter the payment of the amount in terms of the Scheme was made on March 23, 1999, and intimations were sent on March 24, 1999 to respondent No. 1 - On September 25, 2002, the petitioners filed applications for condonation of delay on the ground that petitioners received the certificate only on March 17, 1999, and, therefore, the payment of amount of tax was made on March 23, 1999, which is within the stipulated time - Supreme Court in Hemalatha Gargya (2002 -TMI - 6098 - SUPREME Court) - Held that the in the absence of any express provision empowering the authority to condone the delay, the authority would have no power to condone the delay After a period of two years, the petitioners submitted the applications dated September 25, 2002 in which they took a stand for the first time that the certificate was served on one Vinod Kumar Sharma who was residing on the ground floor whereas the office of the company is situate in the first floor - The affidavits which have been produced by the petitioners to substantiate the aforesaid plea are vague and, therefore, cannot be relied upon - Accordingly the appeal is dismissed

Summary

Issues Involved:
1. Whether the designated authority under the provisions of the Scheme has power to condone the delay.
2. Whether in the instant case the amount of tax has been paid within the period of limitation.

Issue-Wise Detailed Analysis:

1. Power to Condon the Delay:
The petitioners challenged the legality of the order dated January 3, 2000, and the rejection of their application for condonation of delay in making tax payments under the Kar Vivad Samadhan Scheme, 1998. The Scheme, introduced by the Finance (No. 2) Act of 1998, provides for settlement of tax arrears and specifies the time and manner of payment. Section 90(2) of the Act mandates that the tax payable under the Scheme must be paid within thirty days of the passing of an order by the designated authority. The petitioners argued that their payment delay should be condoned due to non-availability of funds and later claimed that the certificate was served late. However, the court noted that the Scheme does not contain any provision allowing the designated authority to condone delays. The court emphasized that the statutory provisions of the Scheme must be strictly complied with, and there is no scope for equitable considerations. Referring to the Supreme Court's decision in Hemalatha Gargya, the court held that in the absence of an express provision for condonation, the authority has no power to condone delays. Thus, the court concluded that the designated authority under the Scheme cannot condone delays in tax payments.

2. Payment Within the Period of Limitation:
The second issue concerned whether the petitioners paid the tax within the prescribed time limit under the Scheme. The petitioners claimed they received the certificate on March 17, 1999, and made the payment on March 23, 1999, within the limitation period. However, the Revenue contended that the certificate dated February 3, 1999, was served on February 6, 1999, and the payment was made beyond the prescribed time limit. The court observed that in their initial applications dated February 28, 2000, the petitioners admitted the delay was due to non-availability of funds and requested condonation. It was only after two years that the petitioners claimed the certificate was served late. The court found the affidavits submitted by the petitioners to support their claim to be vague and unreliable. Consequently, the court determined that the petitioners' plea of late service was an afterthought and held that the tax payment was not made within the stipulated time. Therefore, the court dismissed the writ petition, finding it devoid of merit.