Law:

Section:

Section 95, read with section 89, of the Finance (No. 2) Act, 1998 - Kar Vivad Samadhan Scheme (KVSS) - Scheme not to apply in certain cases - Designated authority rejected declaration made by assessee under KVSS on ground that appeal preferred by assessee before Commissioner (Appeals) was time-barred and delay was not condoned and, therefore, it could not be said that any appeal was pending under section 95(i)(c) and, as such, benefit of KVSS could not be extended to assessee - High Court upheld order of designated authority - Whether in view of Supreme Court decision in CIT v. Shatrusailya Digvijaysingh Jadeja [2005] 147 Taxman 566 appeal filed by assessee before Commissioner (Appeals) was to be treated as pending, for purpose of KVSS - Held, yes FACTS The assessee was a composite textile mill engaged in manufacture of cotton yarn, man-made yarn, cotton fabrics and man-made fabrics as well as the processing amongst other activities. Notices were served upon the assessee for recovery of differential excise duty. The adjudicating authority confirmed demand of duty along with interest and also imposed penalty. On appeal, the Commissioner (Appeals) asked the assessee to deposit the entire amount of duty and penalty. Subsequently, the assessee filed declaration under the KVSS. The designated authority rejected the said declaration on the grounds that there was delay in filing of appeal before the Commissioner (Appeals) and that delay was not condoned and, therefore, it could not be said that any appeal was pending under section 95(i)( c). On further appeal, the Tribunal held that the appeal filed by the assessee before the Commissioner (Appeals) was within limitation and remanded the matter to him for fresh disposal. On remand, the Commissioner (Appeals) upheld the order-in-original. Thereafter, the assessee approached the designated authority for reconsideration of earlier order and give the assessee benefit of the KVSS. However, it could not succeed there. On writ petition, the High Court held that since the appeal was filed after the limitation and delay was not condoned, the assessee was not entitled to get benefit of the KVSS. On appeal to the Supreme Court :…

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