P. RAMANATHAN vs ITO

R. Jayasimha Babu, J.

The submission of the petitioner is that notice having been issued as provided for in rule 119(3), the interest u/s 220(2) cannot be taken note of for

the purpose of determination of the amount payable by the petitioner under the Samadhan Scheme. That rule was in force during the assessment

years in question namely, 1971-72 to 1973-74. The Samadhan Scheme provides opportunity to the assessee to pay all the dues, which had

remained unpaid by reason of pending litigation. There is no compulsion on the assessee to avail the benefit of the scheme. When the matters are

being settled finally be extending the concession, all the amounts payable by the assessee are required to be taken into account while determining

the extent to concession to be given. The scheme is meant to put a final end to the pending litigations. That cannot be done if, the contentions like

one raised are allowed to be raised. The fact that certificate had not been issued is not of any consequence when it is undisputed that the tax had

not been paid and that under the provisions of the Act. Such non-payment carries with it the further liability for payment of interest on the amount

of unpaid tax. All that rule 119 provides for is the quantification of the amount which is a mere matter on arithmetic and the specification of the

same, in the recovery certificate, to be issued by the Income Tax Officer. The fact that qualification is done under the Samadhan Scheme makes no

difference so far as the liability of the assessee to pay the interest on the unpaid tax is concerned.

In the case of Rajam Pictures Circuit and Others Vs. Commissioner of Income Tax and Others, it was held that levy of interest u/s 220(2) of the

Income Tax Act is statutory and that no separate order is required. It is also held that settlement of account payable u/s 88 of the Kar Vivad

Samadhan Scheme would also be with reference to interest. Though, rule 119 was not considered in that case, the conclusion drawn therein would

still be valid even after consideration of the rule 119. The rule is merely an aid to the statutory provision and is not meant to cut down the scope of

the provision or the extent of its applicability.

The writ petitions are, therefore, dismissed. At the request of the counsel, four weeks time is granted to the petitioner to pay the amount.

Consequently, W.M.Ps are also dismissed.