9911796707
TMI Blog2014 (9) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... eries used in the said manufacturing process are subject to wear and tear. Some of the machinery parts were replaced from time to time and the assessee claimed the expenditure on replacement of such machinery parts as revenue expenditure. The Department did not accept this plea and treated the expenditure as capital expenditure. 2.2. Initially, the said issue cropped up in the assessment years 1991-1992 and 1992-1993 and the issue as to whether such expenditure on replacement of machinery parts would be revenue expenditure or capital expenditure was resolved by way of a revision order and as a result, the assessee filed a rectification petition in terms of Section 154 of the Income Tax Act (for brevity, the Act ) for the assessment year 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee voluntarily under the KVSS, 1998 cannot be refunded and that portion of the order of the assessing officer directing refund of tax paid under the KVSS, 1998 was reversed. 2.4. Assailing the said order, the assessee preferred an appeal before the Tribunal. The Tribunal, placing reliance on Section 93 of the KVSS, 1998, held that the amount paid in pursuance of a declaration under Section 88 of the KVSS, 1998 is not refundable under any circumstances. The relevant portion of the said order reads as under: "4. We have considered the rival submission on either side, and also perused the material available on record. Admittedly, the assessee has filed the declaration under KVS Scheme 1998 and the Designated Authority has determined the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that extent which is prejudicial to the interests of the Revenue. Therefore, in our opinion, the twin conditions required for invoking power under Section 263 are satisfied. 6. The next contention of the assessee is that Sec.93 of the KVS Scheme 1998 is illegal since the Government cannot withhold any part of the money when the individual has no tax liability. Admittedly, the Parliament has enacted a specific provision prohibiting the refund of the amount under any circumstances which was paid in pursuance of declaration filed under KVS Scheme. This Tribunal is a creature under the Income Tax Act. Therefore, this Tribunal has no power to examine the constitutional validity or otherwise of Sec.93 of KVS Scheme 1998. Therefore, we are unable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee opted to settle the matter by invoking the provisions of the KVSS, 1998 and paid the tax due thereon and, therefore, the said amount should be refunded to the assessee. 3.3. The Central Government introduced the KVSS, 1998 by the Finance (No. 2) Act, 1998. The scheme was introduced by the Central Government with a view to collect revenues through direct and indirect taxes by avoiding litigation. If an assessee opts to resolve the tax dispute which is pending, he can make a declaration under Section 88 of the KVSS, 1998. After such declaration is made, the Designated Authority shall determine the tax payable and intimate the same to the assessee. The assessee, if he accepts the order, is liable to pay the tax voluntarily. If, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Section 93 of the KVSS, 1998, the assessee cannot seek refund of amount paid under the KVSS, 1998. 3.6. In such view of the matter, we answer the substantial questions of law (2) and (3) against the assessee and in favour of the Revenue. 4.1. Insofar as the first substantial question of law is concerned, as to whether the Commissioner of Income Tax was justified in invoking power under Section 263 of the Act, in view of the reasoning given by us while dealing with questions of law (2) and (3) that in terms of Section 93 of the KVSS, 1998, the assessee cannot seek refund of amount voluntarily paid under the KVSS, 1998, the order passed under Section 154 of the Act by the assessing officer, in our considered opinion, is erroneous and prej ..... X X X X Extracts X X X X X X X X Extracts X X X X
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