C DHANAPALAN Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) PURCHASE of peace by putting an end to disputes was the noble idea in introducing the Kar Vivad Samadhan Scheme. It sounds irony, the case has paved way for a new controversy on the application of the Scheme itself. Kar Vivad Samadhan Scheme, 1998 was introduced in the Fiance act, 1998. The Scheme makes an offer by the Government for settling tax arrears, locked in litigation, by giving substantial discount. S.95 of the Finance act, 1998 contemplates ceratin categories which are not entitled for the benefits under the Scheme. To the extent is relevant for the purpose of resolution of the issue raised in the Original Petition, the provision is quoted below:

(2.) PETITIONER is an assessee on the files of the Income-tax Officer, Ward No.II, Kollam.Aggrieved by the orders of assessment for the years 1980-81 to 1984-85 petitioner preferred appeals before the appellate Assistant Commissioner, Thiruvananthapuram, which were disposed of on 24.12.1985. Against the said order in appeals, petitioner filed revision petition as evidence by Ext. P1. It is significant to note that the date of revision is 16.1.1990. Since there was a delay of almost four years, petitioner also filed Ext. P2 petition to condone the delay and that is dated 18.1.1990. The revision petition was seen posted on 7.1.1991 and 9.11.1993. Thereafter it was posted to 23.11.1993 and again to 8.12.1993. In the absence of any response from the assessee or his representative the revision petition was dismissed on 23.12.1993. As seen from Ext. P6 the main reason for dismissal is that there was inordinate delay of more than four years in filing the revision petition and no reasons have been adduced by the assessee to explain the delay. Thereafter as per Ext. P7 dated 24.10.1996, after almost three years, petitioner filed an application for rectification of mistakes under S. 154 of the Income Tax Act, 1961, (hereinafter referred to as 'the Act'). It is submitted in the said application that the petitioner had already made arrangements for adjournment of the case on 8.12.1993 and that the petitioner had offered sufficient explanation for the delay in filing the revision petition. Those crucial aspects having not been considered by the revisional authority, petitioner contended that he was entitled for an amendment of the order under S.154 of the Act.

(3.) SRI. George, learned counsel appearing for the Revenue contends that the Scheme being a self contained Code, it has to be construed strictly. It is also submitted that being a concession extended to an assessee, the Scheme has to undergo strict interpretation and there is no need to stretch it so as to rope in an assessee like the petitioner. It is further contended that the Government had already issued a clarification on 3rd September, 1998 exactly to the point wherein it was clarified that the pendency of a petition under S. 154 of the Act for rectifying mistake in an order passed under S.264 of the Act cannot be termed a pendency of the revision petition before the Commissioner and hence such a person was not entitled to the benefit of the Scheme. Learned counsel also relied on two decision, firstly by a Division Bench of the Andhra Pradesh High Court reported in Dr. Mrs. Renuka Datla v. C.I.T.(1999) 240ITR 463. The Division Bench was of the view that the provisions contained in the Fiance Act, 1998 introducing the Scheme should be given a strict interpretation, since the provisions relate to granting exemption. At page 471 of the said decision it is held as follows: