High Court grants immunity under Kar Vivad Samadhan Scheme, 1998, withdrawing pending proceedings

The High Court of Bombay ruled in favor of the petitioners in three consolidated cases involving disputes under the Kar Vivad Samadhan Scheme, 1998. The Court held that final certificates issued by the designated authority under Section 90(2) of the Scheme were conclusive, leading to the withdrawal of pending proceedings and granting total immunity to the assessee. The Court emphasized the absence of a final order by the Settlement Commission under Section 245D(4) and upheld the petitioners' argument based on the explicit provisions of the Scheme and relevant Supreme Court judgments. Relief was granted to the petitioners without costs.

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Issues:
Interpretation of provisions under the Kar Vivad Samadhan Scheme, 1998 in light of Settlement Commission orders.

Analysis:
The High Court of Bombay heard three petitions involving identical legal questions and disposed of them collectively. The cases involved disputes related to income determined under the Kar Vivad Samadhan Scheme, 1998, for various assessment years. The Settlement Commission had determined tax liabilities for the same assessment years. The designated authority had issued final certificates under the Scheme for full and final settlement of arrears in all three cases.

The crux of the issue revolved around the interpretation of Section 90(2) and 95(i)(b) of the Finance (No. 2) Act, 1998, which governed the Kar Vivad Samadhan Scheme. The petitioner argued that once the designated authority issues a final order under Section 90(2), all pending proceedings, including appeals and references, should be deemed withdrawn. This contention was supported by the provisions of Section 90(4), which mandated the withdrawal of any pending appeal or reference upon the issuance of the final certificate.

Moreover, the petitioner highlighted the significance of Section 95(i)(b), which excluded cases where the Settlement Commission had issued an order under Section 245D(4) of the Income-tax Act from the purview of the Scheme. The petitioner emphasized that no final order under Section 245D(4) had been passed by the Settlement Commission in the relevant cases, thus making the Scheme applicable.

The petitioner further cited Supreme Court judgments to support their argument. The judgments emphasized that orders passed under Section 90 of the Scheme were conclusive and immune from reopening unless based on false declarations. The Supreme Court rulings underscored the finality and immunity granted under the Scheme upon payment and issuance of the certificate.

The respondents, represented by counsel, contended that orders passed by the Settlement Commission under Section 245D created a bar for availing the Kar Vivad Samadhan Scheme. However, the Court found that no such bar existed in the absence of a final order under Section 245D(4) by the Settlement Commission.

In conclusion, the Court ruled in favor of the petitioners, emphasizing the explicit provisions of the Scheme and the absence of a final order by the Settlement Commission under Section 245D(4). The final certificates issued under Section 90(2) were deemed conclusive, leading to the withdrawal of pending proceedings and granting total immunity to the concerned assessee. The Court granted relief to the petitioners in all three cases, ruling in their favor without costs.

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