Binding settlement scheme circular required consideration of a declaration after criminal discharge, making rejection unsustainable.

A declaration under the Kar Vivad Samadhan Scheme could not be rejected merely because prosecution for concealment had been instituted earlier, where the assessee had already been discharged by the competent criminal court before filing the declaration. The Board's circular issued under the Scheme clarified that such a declaration could be entertained, and that circular was binding on the Designated Authority. The rejection was therefore unsustainable. The impugned decision was set aside and the declaration restored for fresh consideration within the statutory time limit, with other Scheme requirements left open for examination.

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Issues: Whether the Designated Authority could reject the assessee's declaration under the Kar Vivad Samadhan Scheme on the ground that prosecution had been instituted earlier, despite the assessee having been discharged by the criminal court before filing the declaration.

Analysis: The Scheme provision excluded cases where prosecution for concealment had been instituted on or before the date of filing of the declaration, but the Board's circular issued under the Scheme clarified that where the assessee had already been discharged by the competent court, the declaration could be entertained. The circular was binding on the Designated Authority under the statutory scheme. The assessee's discharge had occurred before the declaration was filed, and the pending revision was treated as academic in the circumstances noted by the Court.

Conclusion: The rejection of the declaration was not sustainable and the matter required reconsideration in accordance with the Scheme and the binding circular.

Final Conclusion: The impugned rejection was set aside and the declaration was restored for fresh consideration within the statutory time limit, while leaving other requirements under the Scheme open for examination.

Ratio Decidendi: A binding circular issued under a settlement scheme must be followed, and a declaration cannot be rejected on the ground of prior prosecution where the assessee had already been discharged by the competent criminal court before filing the declaration.

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