Case Note & Summary
The petition arose from the rejection of the petitioner's declarations under the Kar Vivad Samadhan Scheme, 1998 in respect of the wealth-tax arrears of the late Prince Sayajirao Gaekwar. The petitioner, a legal heir of the deceased assessee, had filed appeals before the Commissioner of Wealth Tax (Appeals) against assessment orders and penalties under the Wealth Tax Act, 1957, along with applications for condonation of delay. The Commissioner dismissed the appeals as time-barred on 29 December 1998. Prior to receiving that order, the petitioner had filed declarations under the KVS Scheme on 29 December 1998, which were later rejected on 15 February 1999 on the ground that no appeals were pending. The petitioner then filed appeals before the Income Tax Appellate Tribunal on 21 and 22 January 1999 against the dismissal order, and simultaneously filed fresh declarations under the KVS Scheme on 28 January 1999. The designated authority, respondent No. 1, rejected these fresh declarations on 10 March 1999, holding that the appeals before the Tribunal were not pending appeals against the assessment orders but only against the refusal to condone delay, and thus the petitioner was not eligible. The petitioner challenged this rejection by way of a writ petition under Article 226 of the Constitution of India. The petitioner contended that an appeal filed out of time is still an appeal and its dismissal on limitation is a decision in appeal, so the Tribunal appeals were validly pending, making her eligible for the KVS Scheme regardless of the grounds. Reliance was placed on Supreme Court decisions in Mela Ram & Sons, Sheodan Singh, Raj Brothers Agencies, Essar Constructions and Shatrushailya Digvijay Jadeja. The Revenue argued that an appeal cannot be treated as pending unless the delay is condoned, and since the appeals were not admitted, they were not regular appeals, relying on Computwel Systems. The judgment text provided is incomplete and does not contain the court's analysis or final decision; accordingly, the outcome of the petition is not ascertainable from the extract.
Issue of Consideration
Whether the rejection of the petitioner's declarations under the Kar Vivad Samadhan Scheme, 1998 by the designated authority on the ground that the appeals were not pending as they were dismissed as time-barred and the appeal to the Tribunal was only against the refusal to condone delay, was valid under Section 95(i)(c) of the Finance (No.2) Act, 1998.
Law Points
- An appeal presented out of time is an appeal and its dismissal on limitation is a decision in appeal
- Eligibility under Kar Vivad Samadhan Scheme requires only that an appeal be pending before any appellate authority irrespective of the grounds
- Section 95(i)(c) of Finance (No.2) Act
- 1998 does not disqualify a declarant if an appeal is pending even if it challenges refusal to condone delay.
Case Details
2005 LawText (BOM) (10) 74
WRIT PETITION NO. 1256 OF 1999
Nitesh Joshi for petitioner, Ashok Kotangale for respondents
Ms. Mina Fusade, legal heir of late Prince Sayajirao Gaekwar
Mr. Shibaiji Dash, Commissioner of Income-tax Mumbai City-XIII; The Income-tax Appellate Tribunal, Mumbai; The Union of India
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Nature of Litigation
Writ petition under Article 226 of the Constitution of India challenging the rejection of declarations filed under the Kar Vivad Samadhan Scheme, 1998
Remedy Sought
The petitioner sought to quash the order of the designated authority dated 10 March 1999 rejecting the fresh declarations under the KVS Scheme and to have the declarations accepted.
Filing Reason
The designated authority rejected the declarations on the ground that the appeals giving rise to the tax arrears were not pending before the appellate authority on the date of declarations, as the appeals had been dismissed as time-barred and the appeals to the Tribunal were only against the refusal to condone delay, not against the assessment orders.
Previous Decisions
The Commissioner of Wealth Tax (Appeals) dismissed the petitioner's appeals as barred by limitation on 29 December 1998. The first set of declarations under KVS Scheme filed on 29 December 1998 were rejected on 15 February 1999 on the ground that no appeals were pending. The petitioner filed appeals before the Income Tax Appellate Tribunal on 21 and 22 January 1999 against the dismissal order, and submitted fresh declarations under KVS Scheme on 28 January 1999, which were rejected by the impugned order dated 10 March 1999.
Issues
Whether the rejection of the petitioner's declarations under the KVS Scheme was valid under Section 95(i)(c) of the Finance (No.2) Act, 1998, considering that the appeals filed before the Tribunal were against the refusal to condone the delay in filing the appeals before the first appellate authority, and whether such appeals could be considered as 'pending' appeals for the purpose of the scheme.
Submissions/Arguments
Petitioner argued that an appeal presented out of time is still an appeal, and the order dismissing it as time-barred is one passed in the appeal; therefore, the appeals before the Tribunal were validly pending on the date of declarations, making the petitioner eligible under KVS Scheme irrespective of the grounds raised in the appeal, and relied on Supreme Court decisions in Mela Ram & Sons v. C.I.T., Sheodan Singh v. Daryao Kunwar, Board of Revenue v. M/s. Raj Brothers Agencies, Essar Constructions v. N.P. Rama Krishna Reddy, and C.I.T. v. Shatrushailya Digvijay Jadeja.
Revenue contended that an appeal could not be treated as pending unless the delay in filing it was condoned, and since the appeals before the first appellate authority were dismissed on limitation and the Tribunal appeal was not admitted, no regular appeal was pending; reliance was placed on Computwel Systems P. Ltd. v. W. Hasan.
Judgment Excerpts
The petitioner, on 29th December, 1998, had filed declarations under the KVS Scheme with respect to the aforesaid assessment and the penalty orders suffered by the deceased under the Act.
The aforesaid order dated 10th March, 1999 rejecting second declarations dated 28th January, 1999 made under the KVS Scheme is a subject matter of challenge in this petition filed under Article 226 of the Constitution of India.
Procedural History
The deceased assessee died on 7 May 1985. The petitioner, as legal heir, faced best assessments under the Wealth Tax Act, 1957 for various assessment years. She filed appeals before the Commissioner of Wealth Tax (Appeals) along with condonation of delay applications. The Commissioner dismissed the appeals as time-barred on 29 December 1998. On 29 December 1998, the petitioner filed first declarations under KVS Scheme. These were rejected on 15 February 1999. On 21 and 22 January 1999, the petitioner filed appeals before the Income Tax Appellate Tribunal against the dismissal order. On 28 January 1999, the petitioner filed fresh declarations under KVS Scheme relying on the pending Tribunal appeals. The designated authority rejected these fresh declarations on 10 March 1999. The petitioner then filed the present writ petition under Article 226 challenging the rejection.
Acts & Sections
- Finance (No.2) Act, 1998: Section 87(b)(i), 90(1), 95(i)(c)
- Wealth Tax Act, 1957: Section 18(1)(a), 18(1)(b), 18(1)(c)
- Constitution of India: Article 226
- Income Tax Act, 1961: Section 252(1)
