S. JAGATRAKSHAGAN Vs. DEPUTY COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) TAX Case (Appeals) are at the instance of the assessee against the order of the Tribunal by raising following questions of law:-

(2.) THE facts in brief are as follows:- The assessee herein opted for the benefit of Kar Vivad Samadhan Scheme and accordingly filed an application by offering income at Rs.24,33,687/-. By proceedings dated 17.6.99, the Commissioner of Income Tax, the Designated authority passed an order in terms of Section 90 of the Finance (No.2) Act, 1998 treating the final settlement of tax arrears at Rs.5,88,684/-. It is a matter of record that in respect of interest payment of Rs.20 lakhs, which was referable to a loan taken from the Bank, which was utilised for the purposes of investment in a company promoted by the assessee, was sought to be disallowed by the Assessing Officer.

(3.) AS far as the appeal preferred by the assessee was concerned, considering the offer made by the assessee under the Kar Vivad Samadhan Scheme 1998, nothing remained for the Tribunal to proceed further with the assessee's appeal and the same was withdrawn by the assessee. As regards the Revenue's appeal before the Tribunal was concerned, the assessee took a specific stand that after the determination of the tax payable under the Kar Vivad Samadhan Scheme, nothing survived in the Revenue's appeal for the Tribunal to pass orders on merits. In making such a contention, the assessee placed reliance on the decision of the Apex Court reported in KILLICK NIXON LIMITED v. DEPUTY CIT (2002) 258 ITR 627, wherein it was held that once on the declarant made the assessee had made the payment of the tax amount as determined under Section 90, the assessee enjoyed the immunity under Section 91. In the circumstances, it was no longer open to the Tribunal to deal with the Revenue's appeal on merits. However, the Tribunal rejected the case of the assessee and pointed out that as on the date of the furnishing of the application under Kar Vivad Samadhan Scheme, the Revenue's appeal was pending before the Tribunal. The assessee did not verify the pendency of the Department appeal. As the income involved in the Revenue's appeal was not the subject matter of the declaration made by the assessee, the question of Revenue's appeal automatically coming to end on the determination under Section 90 of the Kar Vivad Samadhan Scheme would not arise. Aggrieved by this, the assessee is on appeal before us.