9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (6) TMI 642 - HC - Income TaxBenefit of Kar Vivad Samadhan Scheme - amount of penalty and interest payable by the petitioner under Section 220(2) read with Sections 271(1)(a), 271(1)(b) and 271(1)(c) was computed @ 50% as due and payable by the petitioner under the KVSS - HELD THAT - Since the liability of the petitioner for the assessment year 1987-88 against the tax demand of ₹ 3,11,206.00 being crystallized, the petitioner was called upon to pay interest and penalty @ 50% as determined at ₹ 6,16,838.00 over and above the aforesaid tax liability of ₹ 3,11,206.00 for the assessment year 1987-88 (which was appropriated by the Income Tax Department). However, if the said tax demand was appropriated and adjusted (as it was received in October 1991), then the petitioner cannot be burdened with payment of penalty and interest in the year 1999, merely because the interim order in WP 2490/1991 did not give such directions for adjustment and appropriation. In any event, since October 1991, the Income Tax Department was in receipt of ₹ 6,00,000.00 from the petitioner. ORDER The Certificate of Intimation dated 26.02.1999 which confers liability on the petitioner towards payment of penalty and interest under the Act for the assessment year 1987-88 is set aside. The respondents / Revenue are directed to compute and intimate to the petitioner within a period of 8 weeks any outstanding penalty and interest, if payable, by the petitioner for the assessment year 1987-88 until the date of deposit (i.e. October 1991) by the petitioner of the amount of ₹ 6,00,000.00 with the Revenue. If the petitioner is liable to pay any penalty and interest, the same shall be adjusted from the balance amount of ₹ 6,00,000.00, if any, held by the Revenue. If the Revenue holds any further balance amount after adjusting the above penalty and interest, if any, the same shall be adjusted towards the outstanding liability for assessment year 1985-86. Rule is discharged.
Issues Involved:
1. Legality of appropriation of ?3,11,206 by the Tax Recovery Officer (TRO) towards the tax demand for the assessment year (AY) 1987-88. 2. Entitlement of the petitioner to the benefits of the Kar Vivad Samadhan Scheme (KVSS) for AY 1987-88. 3. Validity of the Certificate of Intimation issued under Section 90(1) of the Finance (No.2) Act, 1998 under the KVSS Rules 1998. 4. Issuance of a writ of mandamus directing the respondents to consider the petitioner’s case under the KVSS. 5. Adjustment of the illegally appropriated sum of ?3,11,206 towards the tax liability under the KVSS for AY 1987-88. 6. Interim relief restraining the respondents from recovering any amount from the petitioner by way of tax, interest, or penalty under the Income Tax Act, 1961 for AY 1987-88. Detailed Analysis: 1. Legality of Appropriation of ?3,11,206 by the TRO: The petitioner argued that the sum of ?6,00,000 was deposited for the stay of recovery proceedings and not towards any specific tax demand. The court noted that the Revenue had adjusted ?3,11,206 towards the outstanding tax liability for AY 1987-88 from the deposited amount, which was not justified. The court concluded that the petitioner should not be burdened with penalty and interest for AY 1987-88 since the tax demand was already appropriated by the Income Tax Department in 1991. 2. Entitlement to the Benefits of the Kar Vivad Samadhan Scheme (KVSS): The petitioner filed a declaration under the KVSS for AY 1987-88, and the Revenue issued a Certificate of Intimation determining the 50% liability at ?6,16,838 towards penalty and interest. The court found that since the tax liability of ?3,11,206 was already appropriated from the deposit, the petitioner should not be liable for additional penalty and interest computed in 1999. 3. Validity of the Certificate of Intimation: The court observed that the Certificate of Intimation did not specify the period for which the penalty and interest were computed. It was determined that the computation of penalty and interest was not justified since the deposit amount was already appropriated towards the tax liability for AY 1987-88. 4. Issuance of a Writ of Mandamus: The court directed the respondents to compute and intimate any outstanding penalty and interest payable by the petitioner for AY 1987-88 until the date of deposit (October 1991). If any penalty and interest were due, it should be adjusted from the balance amount of ?6,00,000 held by the Revenue. 5. Adjustment of the Illegally Appropriated Sum: The court directed that any balance amount after adjusting the penalty and interest (if any) should be adjusted towards the outstanding liability for AY 1985-86. 6. Interim Relief: The court granted interim relief in terms of prayer clause (f), restraining the respondents from recovering any amount from the petitioner by way of tax, interest, or penalty under the Income Tax Act, 1961 for AY 1987-88 during the pendency of the petition. Conclusion: The petition was disposed of with the following directions: - The Certificate of Intimation dated 26.02.1999 was set aside. - The respondents were directed to compute and intimate any outstanding penalty and interest for AY 1987-88 until October 1991. - Any penalty and interest due should be adjusted from the balance amount of ?6,00,000. - Any further balance should be adjusted towards the outstanding liability for AY 1985-86. - Rule was discharged, and parties were to bear their own costs.
|
