SMT. SUSHILA RANI versus COMMISSIONER OF INCOME TAX AND ANR.

Citation: [2002] 1 S.C.R. 809 · Decided: 04-02-2002 · Supreme Court of India · Bench: S. RAJENDRA BABU · Disposal: Appeal(s) allowed

Judgment (excerpt)

> 
SMT. SUSHILA RANI 
v. 
COMMISSIONER OF INCOME TAX AND ANR. 
FEBRUARY 4, 2002 
[S. RAJENDRA BABU AND RUMA PAL, JJ.] 
Income Tax Act, 1961-Section 245-Kar Vivad Samadhan Scheme, 
1998-Ss. 88, 89 and 90. 
A 
B 
Assessee filed declarations for computing tax arrears under KVSS C 
Scheme and objected to adjustment of refund before Revenue-On being 
satisfied with the corrnrtness of declarations a certificate determining arrears 
of tax was issued under Section 90(1) of the Scheme-Tay; deposited-No 
demand/arrear of tax certificate was issued-Assessee filed refund 
application-Revenue issued notice for amendment in the certificate issued D 
earlier-Assessee filed Writ Petition before High Court-Disposed of without 
expressing opinion, however, observed that question relating to lack of 
jurisdiction in issuing notice could be considered by the Department-On 
appeal, held, a certificate issued under Section 90(1) of KVSS making a 
determination as to the sum payable under the Scheme is conclusive as to the 
matter stated therein and cannot be re-opened in any proceeding except on E 
the ground of false declaration-Basis of notice is that the adjustment already 
made had not been taken note of while calculating tax arrears under the 
Scheme and not suspecting it to be fake declaration- -Therefore matter cannot 
be reopened. 
Appellant, widow of original assessee, filed three separate F 
declarations for the assessment years 1988-89, 1989-90 and 1990-91 and 
requested for computing tax arrears under the Kar Vivad Samadhan 
Scheme, 1998 while appeals were pending before the Revenue, CIT.and 
!TAT for these assessment years. Assessee also submitted in the 
declarations about the adjustment of refund tly the Department for the G 
assessment years 1989-90 and 1991-92 as involuntary and coercive. 
Revenue/Respondent No. 1 on being satisfied with the correctness of the 
declarations in every respect, issued a statutory certificate under the 
provisions of Section 90(1) of the KVSS. Assessee deposited the entire tax 
amount as determined by the Revenue under the said Scheme. Revenue 
809 
I-I 
810 
SUPREME COURT REPORTS 
[2002] I S.C.R. 
A also issued a certificate under Section 90(2) of the Scheme certifying the 
receipt of payments from the assessee towards full and final settlement of 
tax arrears and granting immunity from instituting and proceeding under 
the Act. Thereafter another certificate was issued to the effect that no 
arrears or demand of any kind was outstanding against the assessee as 
per records of the Revenue. 
B 
Assessee submitted a representation to the Revenue for refund of all 
amounts with interest as per provisions of the Act upon finalisation of the 
declarations made by the assessee under the provisions of the KVSS. 
Revenue issued a show-cause notice to the assessee to explain why 
C certificate issued earlier under Section 90(1) of the KVSS be not amended 
on the ground of wrong calculation. Assessee filed a writ petition in the 
High Court, challenging the jurisdiction of issuance ot notice. High Court 
did not express any opinion on the facts of the case and observed that 
appellant may highlight the question relating to lack of jurisdiction before 
the Department for consideration. Hence this appeal. 
D 
Allowing the appeal, the Court 
HELD: 1. A certificate issued under Section 90(1) of the Kar Vivad 
Samadhan Scheme (KVSS) making a declaration as to the sum payable 
E under the KVSS, is conclusive as to the matter stated therein and cannot 
be reopened in any proceedings under any law for the time being in force, 
except on the ground of false implication by the declarant. Therefore, 
before issue of a notice, there should be a satisfaction that the declarant 
has made a false declaration. There is no such allegation in the course of 
the notice issued. The whole basis of the notice is only that adjustments 
F already made had not been taken note of and not the false declaration 
and that information was available with the Department even at the time 
of finalisation of the proceedings under Section 90 of the KVSS. Therefore 
the matter could not be reopened at this stage. [814-H; 815-A-B) 
G 
2.1. Appellant in the course of the declarations filed specifically stated 
that any adjustment of refund towards tax arrears of the appellant by the 
Department in the earlier years without following the mandatory 
procedure of Section 245 of the Income Tax Act would still remain as tax 
arrears for the p

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