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2016 (10) TMI 401 - HC - Income TaxSettlement commission procedure - Settlement of tax payable - Can the Settlement Commission proceed with the petitioner's application made under Section 245C(1) of the Act, after issuance of certificate under Section 90(2) of the KVSS,1998, which had till then only reached the stage of being admitted for further hearing in terms of Section 245D(1) of the Act ? - Held that:- Whatever doubt one may have, would disappear when we look at the relevant portion of Section 95 of the KVSS,1998. To make the matters abundantly clear, this section provides that the provision of the section would not apply in case where an order was passed by the Settlement Commission under sub-section (4) of Section 245D of the Act or similar such provision for settlement under the Wealth Tax Act to any tax arrear in respect of such assessment year. In plain terms therefore, the provisions of the KVSS,1998 would be ousted in a case where the Settlement Commission has passed an order under sub-section (4) of Section 245D, to any tax arrear in respect of such assessment year. This provision would have two purposes; first, it makes it abundantly clear that if other conditions are satisfied, a person can make a declaration in terms of Section 88 of the KVSS,1998 so long as the order has not been passed by the Settlement Commission under sub-section (4) of Section 245D of the Act and secondly, this provision also puts the controversy beyond any debate, whether if a tax assessed by the Commissioner had remained unpaid, for the purpose of KVSS,1998 could it take a shape of the tax arrear and in respect of which an offer for settlement could be made under the KVSS,1998. Once therefore the Settlement Commission passes an order under sub-section (4) of Section 245D of the Act, it would not be open for an assessee to then approach the designated authority under the KVSS,1998 and seek any adjustment in the tax arrear. Till then, however, the issue would be wide open and the assessee, as in the present case, could approach the designated authority under the KVSS,1998. The Settlement Commission therefore, committed a serious error in holding to the contrary. The Supreme Court in case of Smt. Sushila Rani (2002 (2) TMI 7 - SUPREME Court ) observed that the certificate issued under Section 90(1) of the KVSS,1998 making a determination as to the sum payable under KVSS,1998 is conclusive as to the matters stated therein and cannot be reopened in any proceedings under law for the time being in force, except on the ground that false declaration by a declarant. In the result, the impugned order dated 25.6.1999 passed by the Settlement Commission under Section 245D(4) of the Act is set aside
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