RENUKA DATLA Vs. COMMISSIONER OF INCOME TAX KARNATAKA
SUPREME COURT OF INDIA
COMMISSIONER OF INCOME TAX KARNATAKA
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Ruma Pal, J. -
(1.)The grievance of the appellants in these three appeals arises out of an order passed by the respondent No. 1 rejecting the appellants declarations which the appellants had filed under the "Kar Vivad Samadhan Scheme, 1998" (referred to briefly as "the Scheme").
(2.)The scheme was introduced by and is contained in Chapter IV of the Finance (No. 2) Act, 1998 (referred to hereafter as the Act). It was in force between 1st September, 1998 and 31st January, 1999. Briefly, the scheme permits the settlement of "tax arrears" as defined in Section 87(m) of the Act. The relevant extract of the definition reads :
"tax arrears" means,-
(i) in relation to direct tax enactment, the amount of tax penalty or interest determined on or before the 31st day of March, 1998 under that enactment in respect of an assessment year as modified in consequence of giving effect to an appellate order but remaining unpaid on the date of declaration;"
(3.)We have emphasised the dates which have a bearing on the case, namely, (a) 31-3-98 and (b) the date of declaration. In other words, only those tax arrears which had been determined before 31-3-98 and which remained unpaid as on the date of the declaration would qualify for settlement under the scheme. The determination under Section 87(m)(i) by definition, therefore, is that which was modified and not the modification itself. It is to be noted that there is no requirement under Section 87(m) for the modification to have been completed on or before 31-3-1998. To hold that the modification must also be completed by 31st March 1998 would mean, as rightly submitted by learned Counsel for the appellants, that in respect of a determination on 31st March 1998, the appellate order and consequent modification would all have to be completed on the same date. That, given the language of Section 87(m) would be practically impossible and, clearly could not have been intended.
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