Disputed settlement-scheme tax computation must be reasoned and remitted for fresh determination by the designated authority.

A disputed computation of liability under the Kar Vivad Samadhan Scheme required a reasoned determination by the designated authority. The HC held that the assessee was entitled to know the basis of the department's figure and to challenge it if arbitrary or inconsistent with the Scheme, but the court would not itself undertake the factual exercise of calculating the actual tax payable. The impugned determination was set aside and the matter remanded to the designated authority for fresh decision on the basis of the relevant records and pending proceedings, after giving the assessee an opportunity of hearing and passing a reasoned order.

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Issues: Whether the impugned determination of the amount payable under the Kar Vivad Samadhan Scheme, 1998 was sustainable, and whether the matter should be sent back to the designated authority for fresh determination.

Analysis: The petitioner disputed the department's computation of the amount payable and claimed a much lower liability. The Court held that the petitioner was entitled to know the basis on which the department arrived at its figure and to challenge it if it was arbitrary or not in accordance with the Scheme. The Court further held that it could not itself undertake the factual exercise of working out the actual tax liability under the Scheme, which had to be determined by the designated authority on the basis of the pending proceedings and the Scheme guidelines.

Conclusion: The impugned determination was set aside and the matter was remanded to the Commissioner of Income-tax, Indore, as designated authority, to determine the actual tax payable afresh after giving the petitioner due opportunity of hearing and passing a reasoned order.

Final Conclusion: The petitioner succeeded in having the departmental determination quashed, and the tax liability question was left for fresh decision by the statutory authority under the Scheme.

Ratio Decidendi: Where the computation of liability under a statutory settlement scheme is disputed, the designated authority must give a reasoned determination based on the Scheme and relevant records, and the court will not itself undertake the factual computation in writ jurisdiction.

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