- (1.) THE issue deserves determination in this petition for writ is regarding eligibility of the petitioner to have benefit/appropriate certificate in terms of Kar Vivad Samadhan Scheme, 1998 (hereinafter referred to as KVSS), that came into force on 1.9.1998. THE scheme aforesaid was attempted to overcome huge pendency of disputes pending adjudication before various legal foras by foregoing part of demand by revenue, if a tax payer is prepared to give up his dispute and agrees to pay the arrears at reduced rate.
(2.) THE factual matrix necessary to be noticed for adjudication of instant petition for writ is that the petitioner, a company duly incorporated under the provisions of Companies Act, 1956 made a declaration for the assessment year 1990-91 on 28.1.1999, to avail the benefit of KVSS. A certificate of intimation then was issued by the Commissioner of Income Tax, Jaipur with determination of tax payable at Rs.7,09,431/- by the petitioner company towards full and final settlement of tax arrears. However, by a letter dated 16.4.1999, the respondents refused to issue final certificate under Section 90(2) of the Finance Act, 1998 (hereinafter referred as the Act of 1998) on the count that no reference before the High Court on the date of filing of declaration was pending. To assail validity of the decision conveyed under the letter dated 16.4.1999, this petition for writ is preferred. The contention advanced by counsel for the petitioner is that a petition for Income Tax Reference as per provisions of Section 256(2) of the Income Tax Act, 1961 against the order dated 10.7.1996 passed by the Income Tax Appellate Tribunal, Jaipur out of ITA No.1122/JP/94 for the assessment year 1990-91 was pending before the Division Bench of this Court on the date of filing declaration under Section 90(2) of the Act of 1998, and that was rejected on 9.2.1999 being barred by limitation, thus, the respondent Income Tax Commissioner erred by refusing to issue final certificate for getting benefit under KVSS. As per counsel for the petitioner, though the reference application was barred by limitation but the same was supported by an application for condonation of delay and, therefore, pendency of the reference is implicit. To support the argument reliance is placed upon judgment of Honourable Supreme Court in Commissioner of Income Tax v. Shatrusailya Digvijaysingh Jadeja, reported in (2005)197 CTR (SC) 590, holding therein that it could not be said that a dispute was not pending in terms of Section 95(i)(c) of the Act of 1998 because that was barred by limitation. Reliance is also placed upon Apex Court judgment in Dr. Mrs. Renuka Datla&Ors. v. Commissioner of Income Tax&Anr., reported in (2003) 259 ITR (SC) 258 and Division Bench judgment of Honourable Gujarat High Court in Sheth Enterprises (P) Ltd.&Anr. v. Commissioner of Customs&Anr., reported in (1999) 154 CTR (Guj) 195. On the other hand, as per reply to the writ petition preferred by the respondents the petitioners were not eligible for the benefit/appropriate certificate in terms of KVS Scheme, 1998. There was no pendency in the Honourable High Court on the date of order of the designated authority. The petitioners had not filed its Reference Application within the statutory time allowed under section 256(1)/256(2). The application of the petitioners should been considered if the delay in filing of the Reference Application had been condoned, which however, was not done by the Honourable High Court. I have considered the rival contentions. In the case in hand assessment order for the accounting year 1990-91 was framed on 27.7.1995 determining petitioner's income as Rs.82,86,180/- and tax liability thereon was of Rs.44,74,537/-. A penalty as per Section 271(1)(c) of the Income Tax Act too was imposed. The penalty of Rs.75 lacks stood confirmed by the appellate authority on 1.3.1996 and then after a lapse of about two years ten months Reference petition was filed by the petitioner before the Division Bench of this Court on 11.1.1999. A declaration to avail benefit of KVSS was made by the petitioner on 28.1.1999 and by acting upon that certificate of intimation was issued on 23.2.1999. On 13.3.1999 the petitioner deposited a sum of Rs.7,09,431/- and then on 23.3.1999 an application was submitted for withdrawal of Reference application, which was not even registered by the High Court till then, being barred by limitation. On the same day i.e. 23.3.1999 the petitioner also moved an application for issuance of final certificate. As a matter of fact the Reference application was dismissed by this Court on 9.2.1999 i.e. even prior to filing the application for withdrawal on 23.3.1999. The order passed by the Division Bench of this Court rejecting petitioner's application for condonation of delay as well as reference petition reads as follows:-Heard. This reference application u/s.256(2) of the Income Tax Act is hopelessly barred by limitation by 726 days. The explanation given in the application u/s.5 of the Limitation Act, does not constitute a sufficient cause for not filing the application for reference within the period of limitation. Thus, the application u/s.5 of the Limitation Act is, rejected. Consequently, the application seeking reference u/s.256(2) of the Income Tax Act, 1961 is also dismissed as barred by limitation. With the aid of the facts stated above, case of the petitioner for availing benefits under KVSS is to be examined. As per Section 95(i)(c) of the Act of 1998 the KVSS is applicable to a case where no appeal or reference or writ petition is admitted and pending before any appellate authority or High Court or the Supreme Court on the date of filing declaration or no application for revision is pending before the Commissioner on the date of filing declaration (Emphasis given). In view of the provision aforesaid the benefit of KVSS could not be availed (1)where no appeal or reference or writ petition is admitted by the appellate authority, High Court or the Supreme Court, (2)such appeal or reference or writ petition is not pending before the appellate authority, High Court or the Supreme Court, and (3)such pendency of appeal, reference or writ petition should be on the date of filing declaration. Honourable Supreme Court in Shatrusailya Digvijaysingh Jadeja's case (supra) was examining a matter wherein revision petition and appeal were filed by the assessee alongwith condonation application and those were pending consideration, but without waiting for CIT to exercise his authority to condone the delay, the designated authority rejected the declaration. Honourable Supreme Court with this factual background held that there is no need to introduce the qualification that writ petition, appeal or reference said to be pending should be competent one, as determination of such question is entirely within the domain of the Court before whom such dispute is said to be pending.
(3.) IN Dr. Mrs. Renuka Datla's case (supra) a regular appeal was preferred by the assessee and that was pending consideration, but the designated authority rejected the declaration with an assessment that the said appeal has become infructuous being relating to levy interest which was already waived. Honourable Apex Court in such circumstances held that the designated authority would not have determined the possible out come of the case, but to see the fact only regarding pendency of the dispute. In Sheth Enterprises (P) Ltd. (supra) a regular appeal was filed and that was admitted, and subsequently the same was dismissed being barred by limitation, however, prior to such rejection a declaration for getting benefit under KVSS was filed. In that matter on the date of filing declaration the appeal was pending and that was admitted earlier, therefore, the Division Bench of Honourable Gujarat High Court held the assessee entitled for getting benefit under KVSS. In the instant matter factual position is absolutely different than the cases cited by counsel for the petitioner. True it is, a petition for reference alongwith an application for condonation of delay was presented by the petitioner before registry of this Court prior to filing of declaration, but mere such presentation could not be treated as admission and pendency of a reference. The legislature consciously used the terms admitted and pending in clause (c) of Section 95(i) of the Act of 1998 and this clearly postulates that the dispute concerned must had been found prima facie considerable by the court, otherwise there was no need to prefix admitted before the term pending. The term admitted means taking cognizance of an issue by application of mind for its adjudication. In legal sphere everyone is well aware that while considering an application for condonation of delay in filing appeal, revision, reference etc. the courts used to examine prima facie merits of the matter and only on being satisfied regarding need of adjudication of the issue, calls upon opposite party, thus, in the present context admitted and pending means pendency of a case after taking its cognizance by application of mind and not mere filing or presentation of a petition, memo of appeal or application, as the case may be. In present case the petition for reference was never considered by the Court in above referred terms and, therefore, it can be safely said that the petitioner simply presented a petition for reference, but that was never admitted and pending before the Court, entitling him to avail benefit under KVSS. ;