PUNJAB CROCKERY HOUSE Vs. COMMISSIONER OF INCOMETAX

JUDGEMENT

(1.) THIS writ petition has been filed by the petitioner aggrieved by the orders passed by the designated authority under Section 90 of the Kar Vivad Samadhan Scheme (in short KVSS or the Scheme)  in adding interest under Section 220 (2) of the Income Tax Act (in short the Act) for the purpose of settlement of the dispute.

(2.) THE orders passed by the designated authority is questioned on the ground though initially he had filed declaration under the Scheme for the assessment years 1986 -87, 1987 -88, 1988 -89,  1989 -90 and 1991 -92, the demands with respect to 1986 -87, 1987 -88 were already paid and in that view of the mater, there were no tax arrears and assessee had requested the designated authority to ignore the application for the assessment years 1986 -87 and 1987 -88. As a matter of fact, the assessee has specifically pleaded the same in Para 5 of the writ petition. The counter affidavit filed on behalf of the respondents did not specifically deny the said averment. Petitioner also prays that the relief in the writ petition is specifically confined to the adding -up of the interest for the assessment years 1988 -89, 1989 -90, 1991 -92 under Section 220(2) of the Act. The principal contention urged on behalf of the petitioner is that there was no determination of interest payable and in that view of the matter, the interest which has been added under Section 220 (2) of the Act, now while processing the declaration filed by the petitioner under the Scheme is not in order. He would further submit that in the absence of a demand being there in terms of Section 156 r/w 220 of the Act, the addition of interest for the first time while processing the KVSS is unjust and arbitrary.

(3.) HAVING considered the rival submissions and in view of the statutory scheme, the designated authority is within his powers in adding up the interest though not quantified at earlier point of time while processing the application under the Scheme as the levy of interest is terminable to the date of payment, which date in the case of KVSS is 31.03.1998. In the impugned order the interest has been added only upto 31.03.1998 for the purpose of computation and thereafter by giving necessary deduction as envisaged in the Act, the order has been passed. We see no legal infirmity in the order passed by the designated authority. It is the specific pleading and assertion of the petitioner that penalty amount as demanded has been paid for the assessment years 1986 -87, 1987 -88 and by inadvertence the said amounts were also included in the declaration. There is no specific denial of this specific assertion of the petitioner. Further, the petitioners counsel for the department would submit that the issue relating to 1986 -87, 1987 -88 may be left open treating the declaration as only for the assessment years 1988 -89, 1989 -90, 1991 -92 and confining the order passed by the designated authority to only those years.