Shatrushailya Digvijaysingh Jadeja v. Commissioner Of Income Tax Rajkot

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No 2020 of 1999 For Approval and Signature: Hon'ble MR.JUSTICE M.S.SHAH and Hon'ble MR.JUSTICE K.A.PUJ ============================================================ 1. Whether Reporters of Local Papers may be allowed : YES to see the judgements? 2. To be referred to the Reporter or not? : YES 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the concerned : NO Magistrate/Magistrates,Judge/Judges,Tribunal/Tribunals? -------------------------------------------------------------- SHATRUSHAILYA DIGVIJAYSINGH JADEJA Versus COMMISSIONER OF INCOME TAX RAJKOT -------------------------------------------------------------- Appearance: 1. Special Civil Application No. 2020 of 1999 MR KH KAJI for Petitioner MR BB NAIK for Respondent -------------------------------------------------------------- CORAM : MR.JUSTICE M.S.SHAH and MR.JUSTICE K.A.PUJ Date of decision: 25/09/2002 CAV JUDGEMENT (Per : MR.JUSTICE M.S.SHAH) �In this petition under Article 226 of the Constitution, the petitioner has prayed for a writ, direction or order of this Court quashing and setting aside the orders dated 9.2.1999 passed by the respondent-Commissioner of Income-tax, Rajkot rejecting the petitioner's declarations under the Kar Vivad Samadhan Scheme for A.Ys. 1984-85 to 1991-92 and the petitioner has also prayed for a writ to direct the respondent to accept the petitioner's declarations under the said Scheme and to pass necessary orders under the said Scheme as required by law. 2.�The petitioner is an individual who has landed properties and various sources of income assessable under the Income-tax Act, 1961 (hereinafter referred to as "the Act") as well as under the Wealth Tax Act. The petitioner was assessed to income-tax and wealth-tax for various years and on completion of the said assessments, certain tax liabilities arose. The petitioner was unable to discharge the said tax liabilities which also resulted in liability for interest and for penalty for non-payment of dues. The relevant years are A.Ys. 1984-85 to 1991-92. For some of these years, the petitioner had preferred First Appeals before the Commissioner of Income-tax (Appeals), but as the self-assessment tax under Section 140A was not paid, the appeals were not entertained by the said appellate authority in the years 1992 and 1993. For the other years, the petitioner had not preferred appeals. 3.�The Government of India promulgated the Kar Vivad Samadhan Scheme (hereinafter referred to as "the Scheme" or "the KVSS") through the Finance (No. 2) Act, 1998 as contained in Sections 86 to 98 of the said Act. The Scheme came into force from 1st September 1998 and remained in force till 31st December 1998 and extended till 31st January 1999. 3.�The Government of India promulgated the Kar Vivad Samadhan Scheme (hereinafter referred to as "the Scheme" or "the KVSS") through the Finance (No. 2) Act, 1998 as contained in Sections 86 to 98 of the said Act. The Scheme came into force from 1st September 1998 and remained in force till 31st December 1998 and extended till 31st January 1999. 4.�The petitioner filed revision applications under Section 264 of the Act before the Commissioner of Income-tax, Rajkot-respondent herein. All the said revision applications were filed in November/December, 1998. The relevant A.Ys. were A.Ys,1986-87 to 1991-92 for income-tax and A.Ys. 1984-85 and 1985-86 for wealth-tax. Since there was delay in filing the said revision applications, the petitioner applied for condonation of delay. After filing of the revision applications, the petitioner also applied for settlement of the tax dues under the aforesaid KVSS in respect of his liability for tax, interest and penalty under the Income-tax Act and also under the wealth-tax Act. The said applications were made on 28/29th December 1998. The details about the revision applications including the assessment year, the amount of tax involved, the amount of interest and penalty involved etc. are set out in a statement which is annexed to this judgment at Annexure "A".�According to the petitioner, since the revision applications were filed before the respondent under Section 264 of the Act and the same were pending on the date of filing of declarations for the relevant years, the petitioner's case was covered by the provisions of the KVSS. 5.�On 13/15th January, 1999, the petitioner also filed appeals before the Commissioner of Income-tax (Appeals) or before the Income-tax Appellate Tribunal after 1st September 1998 in respect of A.Ys. 1980-81, 1981-82, and 1988-89 to 1993-94 in respect of the assessments under the Income-tax Act as well as under the Wealth-tax Act. The details about the appeals including the assessment year, the amount of tax involved, the amount of interest and penalty involved etc. are set out in a statement which is annexed to this judgment at Annexure "B". �After filing the appeals, in the last week of January 1999 the petitioner also filed declarations under the KVSS in respect of the assessment years which were the subject matter of those appeals. 6.�By his orders dated 15/22/23rd February 1999 and 5th March 1999, the respondent acting as the Designated Authority under the KVSS accepted the petitioner's declarations which were filed in pending appeals in respect of the above assessment years, but by his orders dated 9.2.1999 rejected the declarations in the pending revision applications. The said orders dated 9.2.1999 are under challenge in the present petition. The petition was filed on 22.3.1999 and during pendency of the present petition, the respondent rejected the petitioner's applications for condonation of delay and on that basis dismissed the petitioner's revision applications on 31.3.2000. 7.�The major contention of the petitioner in the present petition is that when the tax arrears in the petitioner's case were determined before 31st March 1998 and the petitioner's revision applications were pending on 28/29th December 1998 when the declarations under the KVSS were filed, the petitioner satisfied all the requisite conditions for availing the benefits under the KVSS and, therefore, the respondent acted illegally in rejecting the petitioner's declarations. 7.�The major contention of the petitioner in the present petition is that when the tax arrears in the petitioner's case were determined before 31st March 1998 and the petitioner's revision applications were pending on 28/29th December 1998 when the declarations under the KVSS were filed, the petitioner satisfied all the requisite conditions for availing the benefits under the KVSS and, therefore, the respondent acted illegally in rejecting the petitioner's declarations. �The second major ground urged in the petition is that the petitioner had also preferred appeals for A.Y. 1980-81, 1981-82, 1993-94 and some of the earlier years under the Income-tax Act as well as under the Wealth-tax Act. Those appeals were also filed belatedly beyond the period of limitation. The respondent, however, accepted the petitioner's declarations in pending appeals which were time barred, but the respondent illegally rejected the petitioner's declarations in pending appeals which were time barred, but the respondent illegally rejected the petitioner's declarations in pending revision applications. 8.�In response to the notice issued by this Court, affidavit in reply dated 15th April 1999 came to be filed by the Commissioner of Income-tax, Rajkot. In the affidavit in reply, a reference is made to the provisions of the KVSS as contained in the Finance (No. 2) Act, 1998 and thereafter the following averments and submissions are made :- "2.2�The two main conditions precedent for eligibility for the benefits of KVSS were :- �(i) Existence of outstanding tax arrears as on 31.3.98; and �(ii) Pendency of dispute in respect of the relevant assessment by way of an Appeal or Reference or Revision or Writ, etc. as on the date of Declaration. 2.3�The deponent submits that Income Tax arrears of about Rs.2.65 Crores and Wealth Tax arrears of about Rs.3.64 Crores (Total Rs.6.29 Crores) pertaining to various assessment years between A.Y. 1980-81 to 1993-94, were outstanding against the petitioner. 2.4�The Income Tax and Wealth Tax assessments relating to all the above assessment years had already become final, except for income-tax assessment for A.Y. 1981-82 and Wealth-tax assessment for A.Y. 1993-94 long before the commencement of the KVSS, either because the petitioner had not filed the appeals before the concerned appellate authorities, or because his appeals were dismissed due to non-payment of self assessment tax, etc. The time limit for filing of further appeal had also long since expired. 2.5�The deponent submits that recovery proceedings under the law were in progress since long, for realization of these tax arrears by auction of the immovable properties and a part of the total arrears against the petitioner had already been realized by auction of his properties. The outstanding tax arrears mentioned in paragraph 2.2 above, were after adjustment of an amount of Rs.2.88 Crores, realized on 6.11.96, from auction sale of some land plots at Jamnagar. In connection with these recovery proceedings, the petitioner had also filed a Civil Suit before the Civil Court, Jamnagar, and the matter relating to auction proceedings also came before the Hon'ble Gujarat High Court in Civil Revision Application No. 340 of 1994, decided on 28.11.95. The petitioner thereafter filed a Special Leave Petition before the Hon'ble Supreme Court. 2.6�The deponent therefore submits that, the income-tax and wealth-tax assessment proceedings for all the years from A.Ys. 1980-81 to 1993-94, except for income-tax assessment for A.Y. 1981-82 and wealth-tax assessment for A.Y. 1993-94, had become final, long before the commencement of the KVSS, and the matters land plots at Jamnagar. In connection with these recovery proceedings, the petitioner had also filed a Civil Suit before the Civil Court, Jamnagar, and the matter relating to auction proceedings also came before the Hon'ble Gujarat High Court in Civil Revision Application No. 340 of 1994, decided on 28.11.95. The petitioner thereafter filed a Special Leave Petition before the Hon'ble Supreme Court. 2.6�The deponent therefore submits that, the income-tax and wealth-tax assessment proceedings for all the years from A.Ys. 1980-81 to 1993-94, except for income-tax assessment for A.Y. 1981-82 and wealth-tax assessment for A.Y. 1993-94, had become final, long before the commencement of the KVSS, and the matters relating to recovery by auction has reached upto the Hon'ble Supreme Court." �It is, therefore, submitted that declarations under the KVSS filed immediately after belatedly filing revision applications after a number of years merely for taking the benefit of the KVSS cannot be treated as revision applications after a number of years merely for taking the benefit of the KVSS cannot be treated as pending revisions as provided in Section 95(1)(c). �Rejoinder affidavit has also been filed by the petitioner. 9.�At the hearing of the petition, Mr KH Kaji, learned counsel for the petitioner-assessee has raised the following contentions:- 9.1�The petitioner fulfilled both the conditions precedent for eligibility of the benefits under the KVSS. The petitioner had outstanding tax arrears as on 31st March 1998. The revision applications filed by the petitioner for the relevant years were pending on the date when the declarations were filed within the time limit prescribed by Section 89. Hence, the petitioner was entitled to get benefit of the KVSS. �Strong reliance has been placed on the decision of the Apex Court in Mela Ram & Sons vs. CIT, (1956) 29 ITR 607, SB Jain, ITO vs. Mahendra, (1972) 83 ITR 104 and Raja Kulkarni vs. State of Bombay, AIR 1954 SC 73 in support of the petitioner's contention that "pendency" of the revision applications was required to be "factual pendency" irrespective of the fact whether the delay in filing the revision applications was ultimately condoned or not. �Strong reliance has also been placed on the decision of this Court in Sheth Enterprises (P) Ltd. vs. Commissioner of Customs, 154 CTR 195 and the decision of the Kerala High Court in Lukkose John Thoppil vs. CIT, (2000) 242 ITR 1 wherein the Courts had an occasion to consider the provisions of the KVSS in respect of a declaration under the KVSS filed in a pending appeal which was also time barred, and in respect of the declarations under the KVSS filed in a revision which was subsequently held to be not maintainable. 9.2�Moreover, it is submitted that the respondent in his capacity as the Designated Authority under the KVSS was not entitled to look into the merits of the delay condonation applications filed in the revision applications under Section 264, as the Designated Authority under the KVSS cannot exercise the powers of the revisional authority under Section 264 of the Income-tax/Section 25 of the Wealth-tax Act, even if the same incumbent happens to hold both the posts. In support of this contention, reliance is placed on the decision of this Court in Gufic Pharma Ltd. vs. JG Arora, (1999) 238 ITR 835. 10.�On the other hand, Mr BB Naik, learned standing counsel appearing for the respondent-revenue has vehemently opposed the petition and made the following submissions:- decision of this Court in Gufic Pharma Ltd. vs. JG Arora, (1999) 238 ITR 835. 10.�On the other hand, Mr BB Naik, learned standing counsel appearing for the respondent-revenue has vehemently opposed the petition and made the following submissions:- 10.1�The object of the KVSS was to settle pending disputes. Hence, revisions applications had to be pending on 1st September 1998 when the KVSS came into force and also on the date of filing the declarations under the KVSS. Since the revision applications were not pending on 1st September 1998, the revision applications cannot be said to be "pending". Strong reliance has been placed on the decisions of the Karnataka High Court in Gopal Films vs. Dy.CIT, (1999) 237 ITR 655 and of the Calcutta High Court in Paresh Premji Rajda vs. CIT, (1999) 239 ITR 11 in support of his submission that the KVSS was introduced to resolve pending disputes and not to create artificial "pendency" of disputes for the purpose of giving benefits to the assessees whose to create artificial "pendency" of disputes for the purpose of giving benefits to the assessees whose assessments had become final long before coming into force of the KVSS. �It is also submitted that when there was gross delay in filing of the revision applications, before condonation of said delay, the revision applications delay in filing of the revision applications, before condonation of said delay, the revision applications cannot be said to be pending. 10.2�There is considerable difference between an appeal and a revision. The remedy of filing an appeal is available to an assessee as a matter of right whereas the remedy of filing a revision application under Section 264 is a discretionary remedy and, therefore, acceptance of the petitioner's declarations under the KVSS in appeals cannot clinch issue in favour of the petitioner in the matter of declarations under the revision applications also. 10.3�The petitioner's appeals filed against the assessment orders for the relevant assessment years (Statement Annexure "A") were already dismissed in the years 1992-1993 for non payment of self assessment tax and, therefore, the so-called revision applications filed in December, 1998 were not bona fide. In fact, the recoveries were started earlier and the tax dues of Rs. 2.88 Crores were already recovered from the petitioner by auctioning the petitioner's lands. 11.�Before dealing with the rival submissions, it is necessary to set out the relevant provisions of the KVSS as contained in the Finance (No. 2) Act, 1998. �"Short title and commencement. 86.(1)�This Scheme may be called the Kar Vivad Samadhan Scheme, 1998. (2)�It shall come into force on the 1st day of September, 1998. �Definitions 87.�In this Scheme, unless the context otherwise requires,- �(f) "disputed tax" means the total tax determined and payable, in respect of an assessment year under any direct tax enactment but which remains unpaid as on the date of making the declaration under section 88; �(m) "tax arrears" means,- �(i) in relation to direct tax enactment, the amount of tax, penalty or interest determined on or before the 31st day of March, 1998 under that enactment in respect of an assessment year as modified in consequence of giving effect to an appellate order but remaining unpaid on the date of declaration. �(n) all other words and expressions used and not defined in this Scheme but defined in any direct tax enactment or indirect tax enactment shall have the meanings respectively assigned to them in those enactments. �Settlement of tax payable 88.�Subject to the provisions of this Scheme, where any person makes, on or after the 1st day the date of making the declaration under section 88; �(m) "tax arrears" means,- �(i) in relation to direct tax enactment, the amount of tax, penalty or interest determined on or before the 31st day of March, 1998 under that enactment in respect of an assessment year as modified in consequence of giving effect to an appellate order but remaining unpaid on the date of declaration. �(n) all other words and expressions used and not defined in this Scheme but defined in any direct tax enactment or indirect tax enactment shall have the meanings respectively assigned to them in those enactments. �Settlement of tax payable 88.�Subject to the provisions of this Scheme, where any person makes, on or after the 1st day of September, 1998 but on or before the 31st day of December, 1998, a declaration to the designated authority in accordance with the provisions of section 89 in respect of tax arrear, then, notwithstanding anything contained in any direct tax enactment or indirect tax enactment or any other provision of any law for the time being in force, the amount payable under this Scheme by the declarant shall be determined at the rates specified hereunder, namely :- �(a) where the tax arrear is payable under the Income-tax Act, 1961 (43 of 1961),- ��(i)�...�...�...�... ��(ii) in the case of a declarant, being a person other than a Company or a firm, at the rate of thirty per cent of the disputed income; ��(iii) in the case where tax arrear includes income-tax, interest payable or penalty levied, at the rate of ...�...�... ... thirty per cent of the disputed income for the persons referred to in clause (ii); ��(iv) in the case where tax arrear comprises only interest payable or penalty levied, at the rate of fifty per cent of the tax arrear; ��(v)�...�...�...�... �Particulars to be furnished in declaration 89.�A declaration under section 88 shall be made to the designated authority and shall be in such form and shall be verified in such manner as may be prescribed. �Time and manner of payment of tax arrear. 90.(1)�Within sixty days from the date of receipt of the declaration under section 91, the designated authority shall, by order, determine the amount payable by the declarant in accordance with the provisions of this Scheme and grant a certificate in such form as may be prescribed to the declarant setting forth therein the particulars of the tax arrear and the sum payable after such determination towards full and final settlement of tax arrears; ��...�...�...�...�... ��...�...�...�...�... (2)�The declarant shall pay, the sum determined by the designated authority within thirty days of the passing of an order by the designated authority and intimate the fact of such payment to the designated authority along with proof thereof and the designated authority shall thereupon issue the certificate to the declarant. (3)�Every order passed under sub-section (1), determining the sum payable under this Scheme, shall be conclusive as to the matters stated therein and no matter covered by such order shall be reopened in any other proceeding under the direct tax enactment or indirect tax enactment or under any other law for the time being in force. (4)�Where the declarant has filed an appeal or reference or a reply to the show cause notice against any order or notice giving rise to the tax arrear before any authority or Tribunal or Court, then, notwithstanding anything contained in any other provisions of any law for the time being in force, such appeal or reference or reply shall be deemed to have been withdrawn on the day on which the order referred to in sub-section (2) is passed: �No refund of amount paid under the Scheme 93.�Any amount paid in pursuance of a direct tax enactment or indirect tax enactment or under any other law for the time being in force. (4)�Where the declarant has filed an appeal or reference or a reply to the show cause notice against any order or notice giving rise to the tax arrear before any authority or Tribunal or Court, then, notwithstanding anything contained in any other provisions of any law for the time being in force, such appeal or reference or reply shall be deemed to have been withdrawn on the day on which the order referred to in sub-section (2) is passed: �No refund of amount paid under the Scheme 93.�Any amount paid in pursuance of a declaration made under section 88 shall not be refundable under any circumstances. �Scheme not to apply in certain cases 95.�The provisions of this Scheme shall not apply - �(i) in respect of tax arrear under any direct tax enactment,- ��(a)�...�...�...�... ��(b)�...�...�...�... ��(c) to a case where no appeal or reference or writ petition is admitted and pending before any appellate authority or High Court or the Supreme Court on the date of filing of declaration or no application for revision is pending before the Commissioner on the date of filing declaration." ��(emphasis supplied) 12.�The first requirement for entitlement to the benefit under the KVSS viz.- existence of tax arrear as on 31st March 1998 which remain unpaid on the date of filing the declaration under Section 88 - was complied with in the instant case. The serious controversy is about the second condition regarding "pendency" of revision applications in respect of the relevant assessment years as on the date of the declarations. The learned counsel for the assessee has relied on the decisions of the Apex Court interpreting the expression "pending appeals" in the cases under the Industrial Disputes Act and under the Indian Income-tax Act, 1922 and the Income-tax Act, 1961 and the decisions interpreting the expression "pending proceedings". 12.1�In Raja Kulkarni vs. State of Bombay, AIR 1954 SC 73, the controversy arose in the following context :- �Section 24(b) of the Industrial Disputes Act, 1947 prohibits a workman, who is employed in any industrial establishment, from going on strike during the pendency of an appeal before the Appellate Tribunal. Section 25 renders, a strike and a lockout as illegal if it is declared, commenced or continued in contravention of the provisions of Section 24. Section 27 provides for penalty for contravention of Section 25 which may even lead to imprisonment for six months. The question before the Hon'ble Supreme Court was whether the appellants in that case rendered themselves liable to prosecution under Section 27, because they instigated the strike while the appeal was pending before the Appellate Tribunal. The contention raised on behalf of the appellant-workmen and the finding given by the Hon'ble Supreme Court are set out hereunder in Their Lordships' words :- "It is contended that Section 24 contemplates the pendency of a valid or competent appeal but, as no valid or competent appeal under the law was pending, the appellants committed no offence under Section 27. We are unable to accept this contention. Section 24 on a plain and normal construction requires for its application no more than that an appeal should be pending and there is nothing in the language to justify the introduction of the qualification that it should be valid or competent. �Whether the appeal is valid or competent is a question entirely for the Appellate Court before whom the appeal is filed to determine, and this determination is possible only after the appeal is heard, but there is nothing to prevent a party from filing an appeal which may pendency of a valid or competent appeal but, as no valid or competent appeal under the law was pending, the appellants committed no offence under Section 27. We are unable to accept this contention. Section 24 on a plain and normal construction requires for its application no more than that an appeal should be pending and there is nothing in the language to justify the introduction of the qualification that it should be valid or competent. �Whether the appeal is valid or competent is a question entirely for the Appellate Court before whom the appeal is filed to determine, and this determination is possible only after the appeal is heard, but there is nothing to prevent a party from filing an appeal which may ultimately be found to be incompetent, e.g. when it is held to be barred by limitation or that it does not lie before that Court or is concluded by a finding of fact under Section 100 of the Civil Procedure Code. From the mere fact that such an appeal is held to be unmaintainable on any ground whatsoever, it does not follow that there was no appeal pending before the Court." 12.2�In Mela Ram & Sons vs. CIT, (1956) 29 ITR 607, the Apex Court held that an appeal presented out of time is as much an appeal as the one presented within time. The controversy in that case was in view of the provisions of Sections 30(2) and 31 of the Income-tax Act, 1922. Section 30(2) required filling of the appeal within a stipulated time with the power conferred on the first appellate authority (AAC) to condone the delay in filing the appeal beyond the stipulated time. Section 31 laid down the cases in which further appeal would lie. The question was if the first appellate authority (i.e. Appellate Assistant Commissioner) passes an order rejecting the application for condonation of delay, whether an appeal would lie under Section 31 against such an order. The contention raised before the Apex Court was - it is only after the Appellate Assistant Commissioner would condone the delay that the appeal before him would come into existence and, therefore, if he refuses to condone the delay in filing of the appeal before him, the order passed by him is not in appeal and, therefore, no further appeal would lie under Section 31 of the Act. In short, the contention was that there is no appeal unless it is presented in time and if presented beyond the time, unless the delay is excused. The Apex Court rejected the said contention and held that even where an appeal is filed beyond the prescribed period of limitation, it is also an appeal and, therefore, the order rejecting the application for condonation of delay is also an order passed in the appeal. 12.3.�In S.B. Jain, ITO vs. Mahendra, (1972) 83 ITR 104, notice for reopening the assessment issued under Section 34(1)(a) of the Indian Income-tax Act, 1922 was pending when the Income-tax Act, 1961 came into force on 1st April 1962. Ultimately that notice came to be discharged by the authority after 1st April 1962 and thereafter the Income-tax Officer issued another notice for reopening the assessment under Section 148 of the Income-tax Act, 1961. The assessee invoked Section 297 of the 1961 Act which provided that notwithstanding the repeal of the 1922 Act where in respect of any assessment year any income chargeable to tax had escaped assessment within the meaning of that expression in Section 147 and no proceedings under Section 34 of the 1922 Act in respect of any such income are pending at the commencement of 1961 Act (1st April 1962), a notice under Section 148 may be issued with respect to that assessment year and all the provisions of this Act shall apply accordingly. The assessee, therefore, contended that the proceedings under Section 34 of the 1922 Act were pending on 1st April 1962 and, therefore, the proceedings under Section 148 read with Section 297 of the 1961 Act could not have been commenced. The reply of the revenue was that since the notice under Section 34 of the 1922 Act accordingly. The assessee, therefore, contended that the proceedings under Section 34 of the 1922 Act were pending on 1st April 1962 and, therefore, the proceedings under Section 148 read with Section 297 of the 1961 Act could not have been commenced. The reply of the revenue was that since the notice under Section 34 of the 1922 Act was an invalid notice on the ground that it was barred by limitation, the proceedings initiated on the basis of that notice should be considered as not pending in the eye of law. Rejecting the contention of the revenue, the Apex Court held as under :- "The only question for decision in these appeals is whether the proceedings initiated by the notice under section 34(1)(a) of the 1922 Act were pending at the time when the new Act came into force. It is not denied that such proceedings were factually pending. But, what was contended by Mr. B. Sen, learned counsel for the department, was that notice being an invalid notice on the ground that that was barred by limitation, the proceedings initiated on the basis of that notice should be considered as not pending in the eye of law. We are unable to accept this contention. What section 297(2)(ii) requires is the factual pendency of a proceeding under section 34 of the repealed Act. The question whether that proceeding was barred by limitation or not is irrelevant. It is not denied that those proceedings were initiated by a competent authority. Those proceedings were quashed for the reason that notice under section 34 of the 1922 Act was issued beyond the time prescribed by law. Hence, it cannot be said that no proceeding under section 34 of the 1922 Act either factually or legally was pending at the time when the new Act came into force." ����(emphasis supplied) 13.�The aforesaid authorities, therefore, explain the expression "pending" in no uncertain terms that "pending" means "factually pending" and that merely because the notice or proceedings were not issued or commenced within the period of limitation, that does not detract from the fact that the proceedings were "pending". 14.�Mr Naik, learned counsel for the respondent, however, submitted that unless the delay in filing a revision application is condoned, it cannot be said that the revision application was pending because the revision application can be said to have been instituted only after the delay is condoned. In this connection, reference is made to the provisions of sub-section (3) of Section 264 of the Income-tax Act, 1961 which read as under :- "264(3)�In the case of an application for revision under this Section by the assessee, the application must be made within one year from the date on which the order in question was communicated to him or the date on which he otherwise came to know of it, whichever is earlier : �Provided that the Commissioner may, if he is satisfied that the assessee was prevented by sufficient cause from making the application within that period, admit an application made after the expiry of that period." �Reliance is also placed on the decision of the Karnataka High Court in Gopal Films vs. Dy.CIT, 237 ITR 655. Reliance is also placed on the following observations in Gufic Pharma Ltd. vs. JG Arora, (1999) 238 ITR 835 :- "It was also not the case that the revision had application must be made within one year from the date on which the order in question was communicated to him or the date on which he otherwise came to know of it, whichever is earlier : �Provided that the Commissioner may, if he is satisfied that the assessee was prevented by sufficient cause from making the application within that period, admit an application made after the expiry of that period." �Reliance is also placed on the decision of the Karnataka High Court in Gopal Films vs. Dy.CIT, 237 ITR 655. Reliance is also placed on the following observations in Gufic Pharma Ltd. vs. JG Arora, (1999) 238 ITR 835 :- "It was also not the case that the revision had not come into existence within the period of limitation, so as to suggest that the assessee had waived his right to challenge that order." 15.�The submission cannot be accepted. Similar provisions are to be found in Sections 249 and 253 of the Act which also prescribe the period of limitation for filing first appeal before the Appellate Commissioner and the second appeal before the Income-tax Appellate Tribunal. Those provisions, after prescribing the period of limitation, also confer the power on the appellate authority to condone the delay where sufficient cause is shown. The submission about waiver shall be considered a little later (in para 17). �Section 95(1)(c) of the KVSS uses the expression "admitted and pending" in so far as the appeals are concerned, but uses only the word "pending" as far as the revisions are concerned. The attempt made by Mr Naik, for the revenue to distinguish the aforesaid authorities of the Apex Court would have borne fruit if the Legislature had used in Section 95(1)(c) the expression "admitted and pending" for revisions and only "pending" for appeals. 16.�The expression "admitted and pending appeals" under the KVSS itself came up for interpretation of this Court in Sheth enterprises (P) Ltd. vs. Commissioner of Customs, (1999) 154 CTR 195. The order in original was passed on 25th May 1998. The appeal against that order was filed on 17th September 1998 beyond the period of limitation. The declaration under the KVSS was filed on 3rd November 1998 and the appeal was thereafter dismissed as time barred on 9th December 1998. The declaration under the KVSS was rejected by the designated authority in that case on 29th February 1999 on the ground that the appeal was time barred and, therefore, it could not be said to have been "admitted and pending" on the date of filing of the declaration. Relying on the decision of the Apex Court in Melaram & Sons, (1956) 29 ITR 607, a Division Bench of this Court held that the appeal was "admitted and pending" on the date of filing of the declaration and that it made no difference that the appeal was treated as time barred and that ultimately the appeal came to be dismissed on that ground. This Court directed the designated authority to accept the declaration as complying with the requirements of the KVSS and to extend the assessee in that case the benefit of the KVSS. 17.�In Gufic Pharma Ltd. vs. JG Arora, (1999) 238 ITR 835, another Division Bench of this Court held that the following were the conditions precedent for accepting the declarations under the KVSS :- �(1) tax arrears determined on or before 31.3.1998; and �(2) pending appeal/revision/writ petition on the date of the declaration. �In that case, the designated authority held that the revision application had no merit and, therefore, the declaration under the KVSS filed in such a revision cannot be accepted. Disapproving the said approach of of the KVSS. 17.�In Gufic Pharma Ltd. vs. JG Arora, (1999) 238 ITR 835, another Division Bench of this Court held that the following were the conditions precedent for accepting the declarations under the KVSS :- �(1) tax arrears determined on or before 31.3.1998; and �(2) pending appeal/revision/writ petition on the date of the declaration. �In that case, the designated authority held that the revision application had no merit and, therefore, the declaration under the KVSS filed in such a revision cannot be accepted. Disapproving the said approach of declaration under the KVSS filed in such a revision cannot be accepted. Disapproving the said approach of the designated authority, this Court held as follows :- "It is not the condition for operation of the Kar Vivad Samadhan Scheme that the appeal, revision or reference should have come before March 31, 1998, or before the coming into force of the Scheme. It was not intended to curtail the right of any aggrieved party to prosecute his remedies under law. The mere fact that the assessee had not filed a revision prior to the coming into force of the Kar Vivad Samadhan Scheme, in the facts of the case, could not be held against the assessee. If he can legitimately act within the precincts of the statute for pursuing a bona fide dispute, he can also claim the benefit of the scheme promulgated by Parliament when necessary conditions for availing of such benefit have been shown to exist. As on the date of declaration, he had tax arrears which stood determined prior to March 31, 1998, and he had also a dispute pending before the Commissioner of Income-tax by way of revision under section 264 which could not have been ignored by him. The assessee having made the declaration, fulfilling both the conditions as on the date of the declaration, could not have been denied the benefits of the Scheme. The mere fact that the revision authority also happens to be the designated authority, he cannot merge the two distinct jurisdictions and obligations into one and reflect one order into another. As a designated authority, he has jurisdiction to see only the existence of the conditions which make the Kar Vivad Samadhan Scheme operative in the case .... whether the revision has merit or will be successful, is not his domain. That is the domain of the revising authority. That jurisdiction he may not be called upon to exercise if on determining the amount payable under the scheme the assessee deposits the same within the time prescribed. Because in such event the revision is deemed to be withdrawn under section 90(4) of the Finance (No. 2) Act of 1998." �We are of the view that the question whether the assessee had waived his right to prefer an appeal or revision is also a matter to be considered by the appellate/revisional authority (and not by the designated authority) while deciding the application for condoning delay in filing the appeal/revision. 18.�In Lukkose John Thoppil vs. CIT, (2000) 242 ITR 1, the petitioners were partners of a firm which was an assessee under the Act. The Assessing Officer revised the assessment of the partners and passed orders dated 25.9.1997 under Section 155 of the Act redetermining the tax, surcharge and interest payable by the petitioners be withdrawn under section 90(4) of the Finance (No. 2) Act of 1998." �We are of the view that the question whether the assessee had waived his right to prefer an appeal or revision is also a matter to be considered by the appellate/revisional authority (and not by the designated authority) while deciding the application for condoning delay in filing the appeal/revision. 18.�In Lukkose John Thoppil vs. CIT, (2000) 242 ITR 1, the petitioners were partners of a firm which was an assessee under the Act. The Assessing Officer revised the assessment of the partners and passed orders dated 25.9.1997 under Section 155 of the Act redetermining the tax, surcharge and interest payable by the petitioners for A.Y. 1992-93. The revised assessment included interest under Sections 234A, 234B and 234C of the Act. Aggrieved by the levy of interest, the petitioners filed revisions under Section 264 of the Act before the Commissioner of Income-tax who also was the designated authority under the KVSS, 1998. After filing the revisions, the petitioners also filed before the respondents declarations under the KVSS. When the revisions came up for hearing, the petitioners requested to keep the revisions pending till decisions are taken on the declarations under the KVSS. The respondent-CIT by his order dated 14.12.1998 held that the revision petitions filed by the petitioners were not maintainable and cannot be treated as valid revision petitions and, therefore, the declarations under the KVSS cannot be accepted. �The assessee contended before the Kerala High Court that the only question that has to be looked into is whether the revisions were pending at the time when the declarations were filed and that the designated authority is not competent to go into the question whether the revision petitions are maintainable or any relief can be granted in the revision petitions. According to the revenue, the revisions were not maintainable because the assessee did not file any appeal to challenge the assessment of tax, but only filed the revisions to challenge the interest, but the levy of interest is automatic and, therefore, no relief can be granted against levy of interest in a revision under Section 264 of the Act. Hence, the revision petitions were not maintainable and, therefore, at the time when the declarations under the KVSS were filed, there were no appeals or revisions. �After holding that the revision petitions were maintainable because the petitio