Self-assessment tax under section 140A cannot be reallocated against interest under the Kar Vivad Samadhan Scheme.

For the Kar Vivad Samadhan Scheme, self-assessment tax paid under section 140A of the Income-tax Act was treated as a distinct payment on admitted income and not as disputed tax arrears. The Scheme applied only to disputed arrears, and its computation could not be used to reopen or reallocate amounts already paid under section 140A against interest. The non obstante clause did not permit disturbance of settled admitted-tax payments, and a Board clarification dealing with post-assessment payments before declaration was not applicable to this situation. Accordingly, the self-assessment tax could not be adjusted against interest for Scheme relief.

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Issues: Whether, for the purpose of the Kar Vivad Samadhan Scheme, a self-assessment tax payment made under section 140A of the Income-tax Act, 1961, had to be treated as a payment towards tax or could be reallocated against interest so as to give the declarant the full benefit of the Scheme.

Analysis: The Scheme applied only to disputed tax arrears, and the amount payable under it depended on the disputed income and the extent of unpaid disputed tax. A payment made on admitted income under section 140A was a separate self-assessment payment and did not become disputed merely because the regular assessment was later challenged. The Scheme did not expressly require reopening or readjustment of amounts already paid under section 140A, and the non obstante clause could not be used to unsettle settled admitted-tax payments. The Board clarification relied on by the assessee concerned payments made after assessment and before declaration, which was a different situation.

Conclusion: The self-assessment tax paid under section 140A could not be reallocated against interest for the purpose of the Scheme, and the assessee was not entitled to the claimed relief.

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