Judgment ( 1. ) IN this petition, petitioner is assailing the assessment made under the Kar Vivad Samadhan Scheme, 1998 (for short the "scheme") as per order (P/4), dt. 19th Feb. , 1999. ( 2. ) PRECISELY the submission of the petitioner in this petition is that the disputed income has been worked out on the basis of disputed tax which does not include levy of additional tax under Section 141 (2) (sic) of the IT Act, 1961. ( 3. ) PETITIONER has submitted that for the asst. yrs. 1994-95 and 1995-96 disputed income was worked out. Petitioner filed declaration under Section 89 r/w Section 88 of the Finance Act, 1998 for settlement of tax payable to the respondent No. 1. The total tax payable on the aforesaid amount was worked out to Rs. 2,13,310. Respondent No. 1 did not accept the aforesaid figure and determined the tax payable under Section 89 of the Finance Act, 1998 at Rs. 3,03,134. For doing so, the respondent No. 1 took into consideration the amount of the additional tax payable which was determined to be payable by the petitioner. The petitioner objected to the aforesaid working out of the tax payable by his application dt. 25th Feb. , 1999 and reminder dt. 1st March, 1999, but, there was no response. The last date for payment of the tax under the Scheme was 21st March, 1999. Consequently, petitioner has filed this petition. ( 4. ) PETITIONER has submitted that the assessment orders (P/1 and P/2) for the years 1994-95 and 1995-96 were passed. The KVSS, 1998 came into force w. e. f. 1st Sept. , 1998. Section 89 provided that if any person makes a declaration to the CIT in respect of tax arrear remaining due as on 31st March, 1998, he could make a declaration for settlement of the tax payable under Section 88 of the Scheme. Under Clause (f) of Section 87, disputed tax is defined as the total tax determined and payable in respect of an assessment year which remains unpaid on the date of making the declaration under Section 88, on the basis of the disputed tax, the disputed income is worked out. disputed income has been defined under Clause (e) of Section 87 as the whole or so much of the total income as is relatable to the disputed tax. disputed income has been defined under Clause (e) of Section 87 as the whole or so much of the total income as is relatable to the disputed tax. Declaration submitted by the petitioner under the Scheme was correct. Determination made by the CIT by including figure of additional tax is illegal. The additional tax is not relatable to the determination of income. It is in the nature of a penalty which is imposed on an assessee in those cases where prima facie adjustments are made under Section 143 (1) (a) of the IT Act, 1961. It is not relatable to the determination of income. Thus, it cannot be taken into account in determination of disputed income on which tax is payable @ 30 per cent under the Scheme. Circular (P/8) dt. 6th Nov. , 1998 has been relied upon. Hence, this writ petition has been preferred for quashment of the order (P/4 ). ( 5. ) IT is submitted in the return that for the asst. yr. 1995-96 disputed income was worked out at Rs. 4,88,110. For the asst. yr. 1994-95 it was worked out at Rs. 2,22,923. The declaration submitted by the petitioner was verified and on the basis of the assessment records, the outstanding tax arrears as on the date of declaration were as follows: Considering the above outstanding tax arrears, the disputed income for the two assessment years i. e. 1994-95 and 1995-96 was worked out at Rs. 4,11,687 and Rs. 5,98,760, respectively and the amount payable under the Scheme was worked out at Rs. 1,23,506 and Rs. 1,79,628 which was worked out in accordance with the provisions of the Scheme and taking into account the clarification/circulars of the CBDT issued from time to time. The tax arrears outstanding on the date of making declaration included the additional tax of Rs. 75,010 and Rs. 44,260, respectively. As per the provisions of Section 87 (m) of the Scheme, the tax arrears has been defined. disputed income has also been defined in Section 87 (e) of the Scheme. According to this definition, the disputed income in relation to an assessment year means whole or so much of the total income as is relatable to the disputed tax. As per the provisions of Section 87 (m) of the Scheme, the tax arrears has been defined. disputed income has also been defined in Section 87 (e) of the Scheme. According to this definition, the disputed income in relation to an assessment year means whole or so much of the total income as is relatable to the disputed tax. The term disputed tax has been defined in Section 87 (f) of the Scheme which means the total tax determined and payable in respect of an assessment year but which remains unpaid as on the date of making the declaration under Section 88 of the Scheme. The CBDT in its clarification in response to question No. 6 [ref. Samadhan 2/98 dt. 3rd Sept. , 1998 - Ed. has given a clarification with regard to the treatment of additional tax. The question and answer is reproduced below: Q. 6 : Where in an assessment made under Section 143 (1) (a), the AO makes certain adjustments to the total income and levies additional tax, will such additional tax be regarded as a tax or penalty? Ans. The additional tax is only a tax under the IT Act. From the above, it is amply clear that the additional tax levied in respect of an assessment year is a tax and would, therefore, form a part of the disputed tax for the purposes of determination of the disputed income. Accordingly, in the assessees case, the disputed income is worked out by taking into consideration additional tax also. The contention of the petitioner that the additional tax being in the nature of penalty is not required to be taken into consideration for the determination of disputed income is, therefore, not in accordance with the intents and purpose of the Scheme and, therefore, deserves to be rejected. ( 6. ) SHRI Sumit Nema with Shri Mukesh Agrawal, learned Counsel appearing for the petitioner has submitted that the additional tax could not have been included in the tax for arriving at figure of disputed income and disputed tax. Reliance has been placed on circular (P/8 ). ( 7. ) AFTER hearing learned Counsel for the petitioner at length, going through the various provisions, it is clear that there is no merit in the submissions which have been raised. Reliance has been placed on circular (P/8 ). ( 7. ) AFTER hearing learned Counsel for the petitioner at length, going through the various provisions, it is clear that there is no merit in the submissions which have been raised. "tax arrear" has been defined in Clause (m) of Section 87 of the Scheme, which reads as under: (m) tax arrear 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; (ii) in relation to indirect tax enactment, (a) the amount of duties (including drawback of duty, credit of duty or any amount representing duty), cesses, interest, fine or penalty determined as due or payable under that enactment as on the 31st day of March, 1998 but remaining unpaid as on the date of making a declaration under Section 88; or (b) the amount of duties (including drawback of duty, credit of duty or any amount representing duty), cesses, interest, fine or penalty which constitutes the subject-matter of a demand notice or a show-cause notice issued on or before the 31st day of March, 1998 under that enactment but remaining unpaid on the date of making a declaration under Section 88, but does not include any demand relating to erroneous refund and where a show-cause notice is issued to the declarant in respect of seizure of goods and demand of duties, the tax arrear shall not include duties on such seized goods where such duties on the seized goods have not been quantified. Explanation-Where a declarant has already paid either voluntarily or under protest, any amount of duties, cesses, interest, fine or penalty specified in this sub-clause, on or before the date of making a declaration by him under Section 88 which includes any deposit made by him pending any appeal or in pursuance of a Court order in relation to such duties, cesses, interest, fine or penalty, such payment shall not be deemed to be the amount unpaid for the purposes of determining tax arrear under this sub-clause. A bare reading of the aforesaid definition of "tax arrears" means that any amount of tax, penalty or interest amounts to tax arrears for the purpose of the Scheme. "disputed tax" as defined in Section 87 (f) reads thus: (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. A bare reading of the aforesaid definition makes it clear that total tax is determined and payable in respect of an assessment year under any direct tax enactment. Additional tax imposed under Section 143 (1a) is also a tax under the Act, which was unpaid on the date of filing of declaration under Section 88. Apart from that, it is clear from the aforesaid quoted CBDT explanation to question No. 6 that additional tax is treated a part of the tax. Thus, I find that while passing the order (P/4) by respondent No. 1, CIT has not committed an illegality in computation which has been made. Inclusion of additional tax in arrear of tax is found to be proper and in accordance with the provisions of various sections of the Scheme and clarification issued by the CBDT. Circular (P/8) which has been relied upon is not applicable to additional tax in view of the CBDT clarification on question No. 6 issued directly on the subject. ( 8. ) CONSEQUENTLY, I find no merit in this petition, same is hereby dismissed.