9911796707
TMI Blog1999 (12) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... g unpaid on the date of declaration as required under s. 87(m) of the Finance (No. 2) Act, 1998. 2. The petitioner-company is carrying on the business of stock broking, merchant banking, registrars and share transfer agents and investment banking. The petitioner-company was contending that it was not liable to interest-tax, and therefore, according to the petitioner, no returns of income were filed for the asst. yrs. 1994-95 and 1995-96. But, the AO held that the Interest-tax Act was applicable and, accordingly, the assessments were completed vide his order dt. 19th March, 1998, assessing the total amounts payable for 1994-95 as Rs. 93,032 and 1995-96 as Rs. 51,458. The AO simultaneously initiated penal proceedings under s. 13 of the Inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , who is in arrears of tax by 31st March, 1998, and on the date of declaration and in the instant case, the refund due under the IT Act to the tune of Rs. 2,59,445 was already adjusted before 31st March, 1998, against the interest-tax due and the said adjustment was never challenged and, therefore, the scheme is not applicable to the case of the petitioner as rightly intimated in the letter dt. 10th Feb., 1999. 5. The Dy. CIT (Asst.), Special Range, Hyderabad, which scrutnising the return of income of the petitioner for the asst. yr. 1997-98 intimated the proceedings dt. 30th March, 1998, under s. 143(1)(a) of the IT Act, 1961, determining the total income-tax payable and the refundable amount to the petitioner. The amount of Rs. 1,14,95 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of such refundable amount under the IT Act set off the amount to be refunded against the sum, if any, remaining payable under the same Act after giving an intimation in writing to the assessee of the action proposed to be taken under the IT Act. Sec. 245 has no application for the adjustment of the demand of tax under the Interest-tax Act. The demand under the Interest-tax Act was adjusted while finalising the assessment under s. 143(1)(a) of the IT Act and the said intimation under s. 143(1)(a) has become final as the petitioner has not questioned the same. 8. As per the scheme, if the disputed tax is found paid as on the date of making the declaration under s. 88 of the scheme, the scheme is not applicable. A plain reading of the sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elaboration of the reasons given by my learned Brother. 2. I share the view of my learned Brother that the designated authority hereinafter referred to as "the CIT" under the Kar Vivad Samadhan Scheme cannot sit in judgment over the legality of the adjustment of tax. The CIT can only go by the factual position existing as on 31st March, 1998, and on the date of filing the declaration in order to ascertain whether there was "tax arrear". He can do so by scrutinizing the return and perusing the Departmental records relating to assessment and recovery. He cannot embark upon an enquiry on the question whether the adjustment of tax for the payment of which the declaration is filed, is legally valid. No such power is conceded to him either exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the tax falling due under either of the enactments. It would have been open to him to attach the refundable amount due under the IT Act for the purpose of recovering the outstanding interest-tax. Instead of doing that, he has resorted to the mode of recovery by way of adjustment which did not evoke any sort of protest from the assessee. At best, it is a procedural irregularity. In fact, there is every reason to think that the adjustment was done with the implied consent of the assessee. The long silence of the assessee coupled with the fact that learned counsel for the assessee made it clear that the assessee did not have any grievance against the adjustment till the scheme came into existence, reasonably gives rise to an inference that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the discretion. After referring to earlier pronouncements, the Supreme Court observed in the said case : "We may also state that there is yet another line of cases as in State Bank of Patiala vs. S.K. Sharma (1996) 3 SCC 364, Rajendra Singh vs. State of Madhya Pradesh (1996) 5 SCC 460 that even in relation to statutory provisions requiring notice, a distinction is to be made between cases where the provision is intended for individual benefit and where a provision is intended to protect public interest. In the former case, it can be waived while in the case of the latter, it cannot be waived." 3. The conduct of the assessee is an unequivocal indication that he waived the requirement of notice before adjustment and that is permissibl ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
