Court rules taxpayer cannot challenge tax adjustment post-settlement. Petition dismissed for belated claim.

The court held that the petitioner cannot challenge the adjustment made under section 155 after settling the income-tax liability under the Kar Vivad Samadhan Scheme of 1998 for the year 1982-83. The court found that the petitioner had already discharged the balance tax liability and cannot seek reversal of the adjustment, even if the Scheme would have been more beneficial without it. The court dismissed the Original Petition, stating that the petitioner's claim fails due to the belated challenge raised after making payments based on the adjusted amount.

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Issues:
1. Settlement of income-tax liability under the Kar Vivad Samadhan Scheme of 1998 for the year 1982-83.
2. Dispute regarding the adjustment made under section 155 without notice to the petitioner.
3. Challenge to the proceedings after acting upon them by making payments.

Analysis:
1. The petitioner applied for settlement of income-tax liability for the year 1982-83 under the Kar Vivad Samadhan Scheme of 1998. The liability due for 1982-83 was determined to be only interest payable under various provisions of the Income-tax Act. The petitioner was allowed to settle the liability by paying 50% in terms of the Scheme. However, the petitioner claimed there was a balance tax liability for 1982-83, which would have allowed settlement by paying 30% of the total disputed income. The Department argued that a tax liability amount had been adjusted from a refund due for 1984-85, as evident from the proceedings. The court held that the petitioner, having discharged the balance tax liability after the adjustment, cannot challenge the proceedings after three years of the order. The court found that the petitioner is not entitled to request reversal of the adjustment, even if the Kar Vivad Samadhan Scheme would have been more beneficial without the adjustment.

2. The petitioner's counsel contended that the adjustment under section 155 was made without notice to the petitioner and, therefore, should not be binding. However, the court noted that the petitioner had already discharged the balance tax liability after the adjustment was made, as shown in the proceedings. The court held that the petitioner cannot challenge the adjustment at a later stage, especially after acting upon it by making payments. The court found that the petitioner cannot seek reversal of the adjustment based on the argument of lack of notice, as the petitioner had already complied with the adjusted amount.

3. The court dismissed the O.P. (Original Petition), stating that the petitioner's claim fails. The court emphasized that the petitioner had already discharged the balance tax liability after the adjustment made by the Assessing Officer. The court held that the petitioner cannot now seek to reverse the adjustment after three years of the order, especially when the petitioner had already acted upon the proceedings by making payments. The court concluded that the petitioner is not entitled to challenge the adjustment made under section 155, as the petitioner had already settled the liability based on the adjusted amount, and the challenge was raised belatedly.

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