DR. (MRS.) RENUKA DATLA AND ORS. versus COMMISSIONER OF INCOME TAX KARNATAKA AND ANR.

Citation: [2002] SUPP. 5 S.C.R. 166 · Decided: 17-12-2002 · Supreme Court of India · Bench: RUMA PAL · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
DR. (MRS.) RENUKA DATLA AND ORS. 
v. 
COMMISSIONER OF INCOME TAX KARNATAKA AND ANR. 
DECEMBER 17, 2002 
[RUMA PAL AND B.N. SRIKRISHNA, JJ.] 
Finance Act, 1998-Kar Vivad Samadhan Scheme, 1998-Sections 
87(m)(i), 88 and 95(J)(c)- Scheme-Applicability of-Original assessment 
C with respect to Assessment year 1992-93-Subsequent modifications thereof 
to give effect to appellate order-Demand not met by assessees-Declaration 
uls 88 filed-Rejection of declaration by designated authority and High Court-
on appeal-Held, Scheme is applicable to such assessees also-Jn the facts 
of the case it cannot be said that no appeal was pending in respect of tax 
arrears-Income Tax Act, 1961-Ss. 234A, 2348 and 234C. 
D 
Income tax of the appellant was assessed by assessment order dated 
31.3.1995 in respect of assessment year 1992-93. Assessee-appellant 
preferred appeal before Commissioner (appeals) objecting to additions in 
the assessment order. Appellant also challenged the levy of interest under 
Sections 234A, 2348 and 234C of Income Tax Act, 1961. Commissioner 
E (appeals) confirmed some of the additions and set aside some additions 
for re-determination and modification by the assessing authority. Her 
challenge to the levy of interest was disallowed. Appellant filed appeal 
against the order of Com missioner (appeals), before Income Tax Appellate 
Tribunal. 
F 
Pursuant to the order of Commissioner (appeals), the assessing 
officer by order dated 17.11.1997 modified the assessment order dated 
31.3.1995 anll deducted the additions set aside by Commissioner (appeals). 
Subsequently levy of interest was also deleted. Appellant paid the amount, 
as computed by order dated 17.11.1997 and as modified by subsequent 
G order, before 31.3.1998. So far as the additions which were set aside for 
re-determination by the assessing officer were concerned, the appellant 
conceded the computation made by the department. The assessing officer 
recorded the concession and by order dated 31.12.1998 recomputed the 
appellants' total income. However, the assessing officer imposed interest 
under Sections 234A, 2348 and 234C of Income Tax Act. The demand 
H 
166 
RENUKADATLAv. C.l.T. 
167 
raised by the assessing officer was not met by the appellants. 
A 
Appellant filed declaration under Section 88 of Finance Act, t 998 
in respect of the assessment year 1992-93. The designated authority under 
the Kar Vivad Samadhan Scheme, 1998 rejected the declaration filed by 
the appellant on the ground that the assessee could not avail the benefit 
of the Scheme as there was no arrears on 31.3.1998; that the appeal said B 
to be pending was on levy of interest which had been waived and hence 
there was no dispute; and that the arrear that was sought to be settled 
related to the current demand raised on 31.12.1998 which was entirely 
different from the arrear demand. 
Appellant filed writ petition before High Court against the Order C 
of competent authority and the same was dismissed upholding the reasons 
given by the competent authority. Hence the present appeals by assessees. 
Allowing the appeals, the Court 
HELD: t. Order of the High Court is set aside since the appellants' 
case formally fulfilled the criteria for being considered under Chapter IV 
of Finance Act, 1998. (174-E) 
2. A person could avail of the benefit of the scheme, if (1) there was 
D 
a determination of the amount of tax etc. on or before 31.3.1998; and (2) E 
the determination has been modified in consequence of giving effect to an 
appellate order; and (3) the declaration had been filed in the prescribed 
form before the designated authority between 1.9.1998 and 31.12.1998 and 
(4) the amount of the modified demand has remained unpaid on the date 
of declaration; and (5) an appeal or reference or writ petition before the 
authorities or court in respect of the items (1), (2) and (4) on the date of F 
the filing of the declaration is pending. (174-G-H; t 71-A-B) 
3. Both, the Commissioner (Appeals) as well as the High Court have 
proceeded upon an interpretation of the phrase 'tax arrears' de hors the 
definition under Section 87(m) of the Finance Act. In this case, there was 
a determination of the amount taxed by the original assessment order 
before 31.3.1998. The determination was modified by the orders dated 
17.11.1997 and 31.12.1998 pursuant to the order of Commissioner 
(Appeals). The determination on 31.12.1998 was not a fresh assessment 
G 
for the purposes of the Ka

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