NARULA TRADERS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a petition for quashing order annexure P-5 dated February 26, 1999, passed by the Commissioner of Income-tax, Patiala (respondent No. 1), treating the declaration filed by the petitioner under Section 89 of the Finance (No. 2) Act, 1998, as non est. The other prayer made in the petition is for issuance of a direction to allow the petitioner benefit under the Kar Vivad Samadhan Scheme (hereinafter described as "the KVSS") for the assessment year 1989-90.

(2.) THE petitioner is a partnership firm engaged in the business of wholesale scrap material. It filed a return on August 30, 1989, for the assessment year 1989-90 declaring an income of Rs. 1,04,560. By an order dated January 29, 1990, the Assessing Officer assessed the income of the petitioner at Rs. 3,80,080 and created demand of Rs. 89,589. He also levied interest amounting to Rs. 6,936 under Section 220(2) of the Income-tax Act, 1961 (for short, "the Act").

(3.) THE petitioner has averred that as on the date of declaration, a sum of Rs. 15 was payable out of the interest levied under Section 220 and a sum of Rs. 40 was payable under Section 234C of the Act and, therefore, order annexure P-5 dated February, 26, 1999, passed by respondent No. 1 rejecting its declaration should be declared as vitiated by an error of law.[