Madhya Pradesh High Court
Shri Radhika Prakashan Pvt. Ltd. vs Union Of India (Uoi) And Anr. on 6 March, 2002
Equivalent citations: 2002(4)MPHT47
Author: Arun Mishra
Bench: Arun Mishra
ORDER Arun Mishra, J.
1. Petitioner is seeking the issue of writ to the respondents to accept the declaration under Section 89 of the Finance Act No. 2 of 1998 for assessment year 1990-91 which was filed on 28-1-99 under "Kar Vivad Samadhan Scheme".
2. The petitioner is a company engaged in publication of newspaper "Swadesh". Petitioner filed the return of income on 31st December, 1990 declaring loss of Rs. 1,09,240/-. The Assessing Officer completed assessment under Section 143(3) of Income Tax Act on 31st March, 1993 on a total income of Rs. 2,78,760/-. The Assessing Officer made total addition of Rs, 3,88,000/-to the disclosed income. Aggrieved by the order of the Assessing Officer, an appeal was preferred before the Commissioner of Income Tax (Appeal), Bhopal. The Commissioner of Income Tax (Appeal), Bhopal confirmed the various additions made by the Assessing Officer. Aggrieved by the order of Commissioner of Income Tax (Appeal), Bhopal, petitioner filed an appeal to the Income Tax Appellate Tribunal, Indore Bench, Indore registered as ITA No. 503/IND/94. The appeal was dismissed in default of appearance of the Counsel for petitioner on 4-9-98. Misc. application was filed for restoration; the Tribunal vide order dated 1-6-1999 (Annexure P-2) recalled the order and restored the appeal. The appeal was ultimately dismissed on 10th May, 2000. While the appeal of the petitioner was pending before the Tribunal, Union of India introduced "Kar Vivad Samadhan Scheme, 1998". The scheme was operative from 1st September, 1998 to 31st of January, 1999. The scheme was aimed to provide the quick and voluntary settlement of tax dues which were locked in litigation. Petitioner filed declaration under Section 89 of the Finance Act No. 2 of 1998. In this declaration the petitioner worked out disputed tax payable of Rs. 60,173/- and offered to pay this tax. The respondent as per order dated 26th February, 1999 filed the declaration as no appeal was pending on the date of filing of declaration. Petitioner moved an application Annexure P-8 on 8-7-99 pointing out that restoration was accepted on 1-6-1999 and appeal was still pending before the Tribunal. Thus, his declaration under Section 89 should be revived and considered on merits. The same did not find favour with the respondent Commissioner of Income Tax and the prayer was disallowed on 13th September, 1999 as per order Annexure P-9.
3. The respondents in their return contend that no appeal was pending before the appellate authority on 28-1-1999 declaration filed by the petitioner under Section 89 was rejected on the ground that appeal was not pending on the date of filing declaration. The precondition for admittance of declaration under Section 88 of the Finance Act No. 2 of 1998 was that appeal or reference was preferred or writ petition should have been admitted and pending before any appellate authority or High Court or Supreme Court on the date of such declaration which was not satisfied in the instant case. The case stood dismissed in default of appearance and was restored later on and the factum of restoration does not enure to the favour of the petitioner.
4. A rejoinder is filed on behalf of the petitioner pointing out that the issue whether on restoration of appeal it reverts back to the original date has not been answered by respondents. Parties were locked in litigation; scheme was operative from 1-9-98 to 31-1-99 and within the said period declaration was filed. Once the appeal was restored on 1-6-99, it reverts back to the date of filing in 1994 and the dismissal in default made on 4-9-98 stands wiped off. Thus, the declaration should have been considered on merits and decided in accordance with law on restoration of appeal.
5. Learned Counsel for petitioner submits that once the appeal was restored the order of dismissal in default of appearance stands wiped off and the appeal has to be treated as pending on the relevant date between 1-9-98 to 31-1-99. The appeal was restored on 1-6-99 and was filed in the year 1994. He places reliance on a Division Bench decision of Punjab & Haryana High Court in Sat Kartar Trading Co. v. Commissioner of Income Tax, (2001) 250 ITR 859.
6. The learned Counsel for respondents contends that on the date of dismissal of declaration filed under Kar Vivad Samadhan Scheme appeal was not restored; hence order of rejection is proper. Appeal has been later on dismissed on merits hence question can not be reopened.
7. In Sat Kartar Trading Co. v. Commissioner of Income Tax (supra) appeal was dismissed in default of appearance on December 4th, 1998; the declaration, was filed on January 29th, 1999; on that date the reference application of the petitioner had already been dismissed; no fault was found in the initial rejection. It was held that when the reference was revived on May 27th, 1999 and the case was restored the effect of the order was that the basis of the order rejecting the declaration was wiped off. The original position stood restored and the reference was pending on relevant dates. The rejection of declaration was rendered ineffective and it was directed that the declaration filed by the petitioner should be considered in accordance with the "Kar Vivad Samadhan Scheme".
8. The facts, situation in the instant case is same as was obtainable in Sat Kartar Trading Co. (supra). The appeal has been dismissed on merits; later on after its restoration cannot come in the way of the petitioner for consideration of his case as per more beneficial provision "Kar Vivad Samadhan Scheme" framed under Finance Act No. 2 of 1998.
9. In my opinion order P-9 rejecting the prayer to consider declaration under Kar Vivad Samadhan Scheme is bad in law; it ought to have been considered on merits, the appeal was pending on the date of passing of the order P-9. Merely the appeal has been decided subsequently on 10-5-2000 cannot come in the way of consideration of declaration made under the scheme of Kar Vivad Samadhan.
10. The term "restoration" itself contemplates that original position reverts back and the application filed by petitioner Annexure P-8 on 8-7-99 was wrongfully rejected. The matter should have been considered on merits in accordance with the "Kar Vivad Samadhan Scheme, 1998". The declaration in the instant case was filed on 28-1-99. Let it be considered by the respondents on its merits.
11. Writ petition is allowed. The order Annexure P-9 is quashed. The respondents are directed to consider the declaration filed on 28-1-99 in accordance with the Kar Vivad Samadhan Scheme, 1998. Cost on parties.