SHANKERLAL NEBHUMAL UTTAMCHANDANI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This is a petition under Article 226 of the Constitution by an individual who was a partner in the firm called M/s. City Construction, ("the firm") for refund of income tax paid by the petitioner for A.Y.S. 1987-88 to 1989-90.

(2.) The firm filed a declaration under the Kar Vivad Samadhan Scheme (KVSS or scheme) and was granted the benefit under the scheme and the firm accordingly paid income tax at the rate of 35% of the disputed income which worked out to Rs.73,107.00. The petitioner thereafter made an application dated 8.4.99 (Exh.B) claiming a refund to the tune of Rs.11,64,249.00 on the ground that the petitioner had already earlier paid the tax on the income derived by the petitioner as a partner of the said firm in respect of Assessment Year 1987-88, for which the declaration under the KVSS was filed by the firm. The claim for refund was subsequently revised to Rs.13,28,207.00 by the petitioner's letter dated 13.10.1999 (Exh. F). The application came to be rejected by letter dated 16.12.99 (Exh.H) of the C.I.T., Surat on the ground that the petitioner's claim for refund was not permissible in view of the explicit provisions contained in K.V.S.S. 1998. Thereafter the petitioner also applied for refund of Rs.17 lacs and odd amount for A.Y. 1988-89 and for Rs.6 lacs and odd amount for A.Y. 1989-90. The petitioner has approached this Court for directing the Department to refund the tax of Rs.40 lacs and odd amount.

(3.) Mr.J.P.Shah, Learned Counsel for the petitioner has invited our attention to Chapter IV(4) of the "KVVS Scheme". Learned Counsel has also invited our attention to the circular (Exh.P) published on 17.12.98. Since heavy reliance is placed on the said circular, it is quoted in its entirety as under:-