CIT Vs. LEELAMMA JOHN

JUDGEMENT

(1.) The question agitated in this appeal at the instance of the Revenue is whether Ext. P3 declaration filed by the respondent can be one which could be considered in terms of Kar Vivad Samadhan Scheme, 1998. It is contended by the Revenue that, to consider a declaration applying the scheme, there shall be some proceedings pending before the concerned authority, and such proceedings shall be in terms of the law providing for such proceedings.

(2.) It is not in dispute before us that the assessing officer has passed orders against the respondent assessing him for tax and interest. It is also not in dispute that the respondent had filed Ext. P2 revision petition (in both cases) under S.264 of the Income Tax act, 1961, before the Commissioner of Income Tax, on 28.10.1998. It is also not in dispute that the respondent has filed Ext. P3 declaration in terms of the said scheme before the designated officer to avail of the benefit under the scheme, promulgated in the Finance Act 2 of 1998. That declaration was filed on 2.11.1998, that means, after filing of the revision petition Ext. P2. The revision petition was dismissed as per Ext. P5 stating that it cannot be treated as a valid revision petition. Ext. P5 is dated 14.12.1998. It is an admitted case that until that date, no orders has been passed on Ext. P3 declaration. Later, the respondent filed application for reconsideration of Ext. P5. That also was dismissed as per Ext. P6. Still later, the respondent assessee was informed as per Ext. P7 that on the date of filing the declaration (Ext. P3), there was no valid revision pending in the eye of law; hence, Kar Vivad Samadhan Scheme declaration is not being entertained as a valid one. Thus, Ext. P3 was not entertained on the ground that no valid revision petition was pending as on the date of its filing. The respondent challenged it contending that Ext. P2 was a valid revision petition, as in Ext. P2, he had claimed appropriate reliefs including that relating to the alleged wrong calculation of interest contained in the assessment order. S.264 of the Income Tax Act enables an assessee to file revision petition before the Commissioner against any order passed by the subordinate authority. So, the respondent could have filed a revision under S.264 of the Income Tax Act, alleging wrong calculation of interest as well. Therefore, Ext. P2 was a valid revision petition. It ought to have been kept in abeyance until an order has been passed on Ext. P3 declaration. Hence, the respondent submits that Exts. P3, P6 and P7 are bad in law.

(3.) It was contended by the revenue that in order to say that an application for revision was pending, as provided for in S.95(i)(c) of Kar Vivad Samadhan Scheme, the revision shall be one which the assessee has filed in terms of a statute before the appropriate statutory authority. The complaint in Ext. P2 was about interest alone and not about the assessment of tax. His prayer was to waive interest. Waiver of interest is a matter to be considered by the Chief Commissioner, and not the Commissioner. Ext. P2 was filed before the Commissioner and not before the Chief Commissioner. Therefore, it was not a valid revision petition filed before a competent authority. It cannot be stated to be pending in the eye of law to attract S.95(1)(c) of the Kar Vivad Samadhan Scheme.