Sabka Vishwas settlement bars penalty against a director where the underlying dispute is already resolved under the scheme.

Where the main noticee settled the dispute under the Sabka Vishwas (Legacy Dispute Resolution) Scheme and obtained a discharge certificate with nil tax liability, penalty could not be sustained against the director for the same matter. The appellant's role was described only as general negligence, without specific direct involvement justifying penal action. In light of the scheme relief under Section 124(1)(b), the Board Circular, and the Tribunal's consistent view in similar matters, the penalty was set aside and the appeal was allowed.

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Issues: Whether penalty could survive against the director after the main dispute had been settled under the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019 and the relief contemplated under the scheme covered the present appellant.

Analysis: The main noticee had already settled the dispute under the scheme and obtained the discharge certificate with nil tax liability. The appellant's conduct was only attributed with general negligence, without specific direct involvement warranting penalty. In view of the scheme benefits, the relief contemplated under Section 124(1)(b) of the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019, the Board Circular, and the Tribunal's consistent view in similar matters, no penalty was sustainable against the present appellant.

Conclusion: The penalty imposed on the appellant was set aside and the appeal was allowed.

Ratio Decidendi: Where the underlying dispute is settled under the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019 and the case falls within the scheme's relief structure, a penalty cannot be sustained against the appellant for the same settled matter.

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