Statutory finality under tax settlement scheme bars parallel settlement proceedings once certificate is issued.

A tax arrear settled under the Kar Vivad Samadhan Scheme, 1998 attains statutory finality once a certificate is issued under section 90(2), and the same assessment years cannot remain the subject of parallel settlement proceedings. The Scheme operates as a complete code for such arrears, and its conclusive effect prevents reopening of the matters certified under it. Because the declaration was accepted and the certificate issued before any final order under section 245D(4), the Settlement Commission could not continue with the pending settlement application on the same subject matter. The later rectification orders also could not stand once the principal order was unsustainable.

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Issues: Whether, after a declaration under the Kar Vivad Samadhan Scheme, 1998 was accepted and a certificate was issued under section 90(2), the Settlement Commission could continue and decide the pending settlement application under section 245D(4) of the Income-tax Act, 1961 for the same assessment years.

Analysis: The Scheme created a complete code for settlement of tax arrears and provided that the amount determined and certified under section 90 was conclusive as to the matters stated therein and could not be reopened in other proceedings. Section 95 excluded the Scheme only where an order had already been passed by the Settlement Commission under section 245D(4); until such an order was passed, the assessee remained entitled to invoke the Scheme. Since the declaration was accepted and the certificate under section 90(2) had been issued before any final order under section 245D(4), the Settlement Commission could not continue parallel proceedings on the same subject matter. The later rectification orders also could not survive once the principal order was found unsustainable.

Conclusion: The Settlement Commission lacked jurisdiction to proceed with the settlement application after issuance of the certificate under section 90(2) of the Scheme. The challenge succeeded and the impugned order under section 245D(4), along with the consequential rectification orders, was set aside.

Ratio Decidendi: Where a tax arrear is validly settled under the Kar Vivad Samadhan Scheme, 1998 and a certificate is issued under section 90(2), the matter attains statutory finality and pending settlement proceedings under section 245D(4) of the Income-tax Act, 1961 for the same assessment years cannot be continued.

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