IMPORTANT POINT
A certificate u/s 90(1) of Kar Vivad Samadhan Scheme 1988 can be reopened only on the ground of false declaration by the declarant. It cannot be reopened on ground of inadvertant error in understanding a judgment of the High Court.

Headnote:Kar Vivad Samadhan Scheme, 1988-Section 90(1)-Notice under, to amend earlier notice, on the ground that the determination made by the Deptt. for the three assessment years in question was on the Department s wrong understanding of the judgment of Allahabad High Court-Whether permissible under law? (No)-High Court reversed-Appeal allowed-(Income Tax Act, 1961 Section 245).
       Held : We may notice that a certificate issued under Section 90(1) of the KVSS making a determination as to the sum payable under the KVSS, is conclusive as to the matters stated therein and cannot be reopened in any proceedings under any law for the time being in force, except on the ground of false declaration by any declarant. Therefore, before issue of a notice, there should be satisfaction that the declarant has made a false declaration. There is no such allegation in the course of the notice issued. All that is stated is that "adjustments already made should have been taken into account when calculating the tax arrears. As such there is a mistake in calculation, which needs rectification". The whole basis of the notice is only that adjustments already made had not been taken note of. If this is the basis of the issuance of the notice and not the false declaration and that information was available with the Department even at the time of the finalisation of the proceedings under Section 90 of the KVSS, we fail to understand as to how the matter could be reopened at this stage. That information was already available with them and there is no false declaration in that regard. In that view of the matter, the notice issued is without jurisdiction. (Para 8)
       Held further : Even assuming that the authorities under KVSS have inherent powers to correct an error of clerical or arithmetical nature, the same should be so obvious, debate or discussion. In this case, the respondents have to establish adjustment of refund, which had been made against arrears after due notice to the appellant and which is denied by her, and hence admits of investigation of facts and serious debate on the question. Such an error cannot be stated to be an inadvertent error of clerical or arithmetical nature, so plain as to be rectified without much ado. (Para 11)
       Held finally : In that view of the matter, we allow this appeal, set aside the order made by the High Court by allowing the writ petition filed by the appellant and quash the notice issued on 23.6.2000 by the Department calling upon the appellant to explain as to why the order issued earlier under Section 90(1) of the KVSS be not amended. No order as to costs. (Para 12)

JUDGMENT

Rajendra Babu, J.-Leave granted.

2. The appellant before us is the widow of the original assessee under the Income Tax Act, 1961 (hereinafter referred to as the Act ). For the assessment year 1988-89, an appeal was pending before the Commissioner of Income Tax (Appeals) while for assessment years 1989-90 and 1991-92, appeals were pending before the Income Tax Appellate Tribunal. On 23.1.1999, the appellant set out the details of the matters in dispute in the said appeals requesting the Department to indicate or compute the tax arrears as per the Kar Vivad Samadhan Scheme, 1998 (for short KVSS ) so that all disputes in relation to these three assessment years can be resolved. As there was no response from the Department till January 30, 1999, the appellant submitted three separate declarations under Sections 88 and 89 of the KVSS. The appellant had also pointed out the mandatory nature of Section 245 of the Act and the decision of the Allahabad High Court in the case of U.P. State Mineral Development Corporation Ltd. v. Additional CIT, which held that refunds adjusted without notice to assessee is not valid. In the declaration for the assessment year 1989-90, the attention of the Department was also invited to adjustments of Rs. 3,94,503/- and Rs. 18,02,409/- by invoking a bank guarantee which according to the appellant was involuntary and coercive. Similarly, in the declaration for the assessment year 1991-92, the attention of the Department was invited to involuntary set off of a refund of Rs. 81,869/- in view of the non-compliance and non-observance of the mandatory provision of Section 245 of the Act.

3. Respondent No. 1 on receipt of the declaration for the three assessment years evaluated and verified the same in accordance with the provisions of the KVSS and on being satisfied with the correctness of the declaration in every respect, issued on 26.2.1999, a statutory certificate prescribed in Form 2A and Rule 4(a) under the provisions of Section 90(1) of the KVSS. The appellant in all the three declarations computed that the amount required to be deposited under the KVSS for these three assessment years would be Rs. 13,55,018/- and respondent No. 1 by the certificate issued on 26.2.1999 assessed the amount of tax payable by the appellant to be Rs. 14,40,189/- in place of Rs. 13,55,018/- as claimed by the appellant. On receipt of the said certificate under Section 90(1) of the KVSS from respondent No. 1, the appellant deposited the said sum of Rs. 14,40,189/- under separate challans. On deposit of the entire amount demanded by respondent No. 1 as per the KVSS for these assessment years a communication was addressed on behalf of the appellant dated 22.3.1999 for issue of certificate under Section 90(2) of the KVSS and for the deemed withdrawal of the appeals filed on behalf of the appellant for these three years which were pending adjudication. Respondent No. 1 issued a certificate in Form 3 as required under Rule 5(a) and Section 90(2) of the KVSS on 31.3.1999 in favour of the appellant certifying the receipt of payments from the appellant towards full and final settlement of the tax arrears determined in the order dated 26.2.1999 and granting immunity from instituting any proceeding for prosecution of any offence under the Act or from imposing any penalty under the said Act. Thereafter on 11.8.1999 certificate was issued by the Department to the effect that no arrears or demand of any kind is outstanding against the appellant as per the records of the respondents. On 26.10.1999, the appellant submitted a representation requesting the respondents to refund all the amounts along with interest as per the provisions of the Act upon the finalisation of the declarations made by the appellant under the provisions of the KVSS. This claim resulted in the issue of a notice on 23.6.2000 under Section 90(1) of the KVSS calling upon the appellant to explain as to why, the notice issued under Section 90(1) of the KVSS earlier b

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2002 Supreme(SC) 174

IMPORTANT POINT A certificate u/s 90(1) of Kar Vivad Samadhan Scheme 1988 can be reopened only on the ground of false declaration by the declarant. It cannot be reopened on ground of inadvertant error in understanding a judgment of the High Court.

IMPORTANT POINT
A certificate u/s 90(1) of Kar Vivad Samadhan Scheme 1988 can be reopened only on the ground of false declaration by the declarant. It cannot be reopened on ground of inadvertant error in understanding a judgment of the High Court.