Law:

Section:

Section 88 of the Finance (No. 2) Act, 1998, read with section 245 of the Income-tax Act, 1961 - Kar Vivad Samadhan Scheme - Assessee made a declaration under KVSS, 1998 - Said declaration was accepted and certain payments were determined as tax payable in terms of scheme - Meanwhile, pending assessment proceeding for earlier assessment year was conducted and finally an assessment order resulting in refund of tax, was passed - Assessee sought for an order of adjustment of refund amount towards tax payable in terms of scheme - Revenue did not adjust amount and rejected declaration made by assessee stating that it had failed to make payment of tax in terms of Scheme within due date - Whether Kar Vivad Samadhan Scheme is an independent and self-contained scheme and since scheme as such does not provide for any adjustment of refund against tax payable under scheme, no such adjustment is permissible in law in terms of section 245 - Held, yes - Whether when assessee had not made payments within time-frame of 30 days in terms of scheme, it could not be granted benefit of extension for purpose of benefit under scheme - Held, yes - Whether, therefore, petition filed by assessee against rejection of declaration under Scheme was liable to be dismissed - Held, yes FACTS The assessee made a declaration under Kar Vivad Samadhan Scheme, 1998. Revenue accepted the declaration and a certificate of intimation under section 90(1) was issued. Meanwhile, pending assessment proceedings for an earlier assessment year were conducted and finally an assessment order was passed resulting in refund of tax. A notice of demand was issued in terms of declaration made under the scheme. The assessee sought for an order of adjustment of refund amount towards the tax payable in terms of the scheme. Revenue did not adjust the amount and issued a letter stating therein that the assessee had failed to make payment in terms of the scheme within the due date and, therefore, the declaration was treated as rejected. On writ : HELD It is no doubt true that section 245 provides for set-off of refund against the tax payable in terms of the provisions of the Act. It also provides for an intimation in…

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