Answer to Q. no 31 clarifies that where assessee settles TDS liability as deductor of TDS under Vivad se Vishwas (i.e against order u/s 201 of the Act), he will get consequential relief of expenditure allowance under proviso to section 40(a)(i)/(ia) of the Act in the year in which the tax was required to be deducted. What will happen in a situation where the same amount of TDS was recovered in subsequent year and accordingly the assessee has already claimed deduction in that year?

Relief for TDS settlement under Vivad se Vishwas prevents a second deduction if the same amount was already deducted later.

Settlement under Vivad se Vishwas restores deductibility of expenditure in the year tax was required to be deducted, but if the same TDS amount was later recovered and already claimed as a deduction in a subsequent year, the assessee cannot claim the deduction again on account of the settlement, thereby preventing double deduction.