2018 (2) TMI 1528 - HC - Income Tax

Non acceptance of declaration filed by the Petitioner under Section 88 of the Samadhan Scheme - determination of amount of tax payable under Section 90(1) - Held that - The Affidavit in Reply dated 9th April 1999 by the Respondent No.1 the Designated Authority itself in terms states that it has worked out the amount payable for the purpose of certificate dated 3 February 1999 by first adjusting the part payment made towards interest and only thereafter is balance amount of 96, 844/- out of advance tax was adjusted towards tax payable. This action of the Designated Authority in issuing the certificate dated 3 February 1999 is contrary to the binding instructions dated 3rd September 1998 of the Central Government under the Samadhan Scheme. The impugned certificate dated 3rd February 1999 issued under Section 91 of the Samadhan scheme is quashed and set aside. The Petitioner s declaration is restored to the designated authority Respondent No.1 for issuing a fresh certificate and determining the amount payable in accord with the instructions dated 3rd September 1998 issued by the Central Government under Section 96 of the Finance Act i.e. to first adjust the amount paid towards the tax payable and only thereafter to adjust the balance towards interest paid on the date of filing of the declaration. The necessary certificate should be issued by the Respondent No.1 Designated Authority as expeditiously as possible and preferably within 16 (Sixteen) weeks from today along with corrected relief if any.

Summary

Issues:
Challenge to certificate under Kar Vivad Samadhan Scheme, 1998 for Assessment Year 1995-96.

Analysis:
1. The petition challenged a certificate issued by the Designated Authority under the Kar Vivad Samadhan Scheme, 1998, not accepting the petitioner's declaration of tax payable and determining a higher amount. The dispute arose from the assessment order by the Assessing Officer for the same year.

2. The petitioner had filed an appeal against the Assessing Officer's order, which was pending when the petitioner opted for the Samadhan Scheme introduced by the Finance Act, 1998 to resolve tax disputes and reduce pending cases.

3. The petitioner's declaration under the Samadhan Scheme was not accepted by the Designated Authority, leading to a discrepancy in the tax payable amount. The petitioner raised concerns regarding the calculation and adjustment of tax arrears and interest, as communicated by the Assessing Officer.

4. The petitioner argued that the certificate issued by the Designated Authority was contrary to the instructions issued under the Samadhan Scheme by the Central Government, emphasizing the proper appropriation of payments towards tax and interest in case of tax arrears.

5. The court found that the certificate issued by the Designated Authority was in defiance of the instructions issued by the Central Government under the Samadhan Scheme. The court quashed the certificate and directed the Designated Authority to reevaluate the tax payable in accordance with the government's instructions.

6. The court ordered the Designated Authority to issue a corrected certificate promptly, following the proper guidelines within a specified timeframe. The writ petition was disposed of accordingly, with no costs imposed on either party.