IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 11.2.2008 C O R A M : THE HONOURABLE MR.JUSTICE ELIPE DHARMA RAO and THE HONOURABLE MR.JUSTICE S.R.SINGHARAVELU W.A.No.1568 of 2006 A.Ramamurthy ... Appellant/Petitioner -vs- The Income Tax Officer, Ward No.I(3), Virudhunagar. ... Respondent/Respondent PRAYER: Appeal filed under Clause 15 of the Letters Patent against the order, dated 24.8.2006 made in W.P.No.14024 of 2004 and WPMP.No.16534 of 2004 on the file of this court under Article 226 of the Constitution of India, to issue a Writ of Certiorarified Mandamus, to call for the records of the petitioner on the file of the respondent in GIR.No.R- 4356/1(3) VNR/85-86 and quash the impugned order dated 03.02.2004 and consequently direct the respondent to drop the proceedings under Section 155 of the Act. For appellant :: Mr.P.J.Rishikesh J U D G M E N T (JUDGMENT OF THE COURT WAS DELIVERED BY ELIPE DHARMA RAO, J.) This appeal is directed against the order of the learned Single Judge passed in W.P.No.14024 of 2004, dated 24.8.2006. 2. The writ petition was filed stating that the petitioner/appellant, who is an income tax assessee, availed the scheme called "Kar Vivad Samadhan Scheme" for the Assessment Year 1985-86. Pursuant to the same, he paid the amount determined as tax arrears and obtained a certificate to that effect. Later the authorities have reopened the assessment for the Assessment Year 1985-86 and directed the petitioner to pay a sum of Rs.4,98,187/- as per the order of the respondent, dated 03.2.2004. The said writ petition was filed seeking to quash the said order, dated 03.2.2004 and to consequently direct the respondent to drop the proceedings under section 155 of the Income Tax Act. https://hcservices.ecourts.gov.in/hcservices/ 3. The learned Single Judge, taking into consideration the fact that against the abovesaid order, dated 03.2.2004, the petitioner preferred an appeal which is pending before the Commissioner of Income Tax (Appeals), disposed of the writ petition giving liberty to the parties to agitate the grounds available as per the ratio laid down by the Supreme Court in Killick Nixon Ltd. -vs- Deputy C.I.T (258 ITR 627) and further directing the department not to take any coercive steps for recovery of income tax till the disposal of the appeal pending before the Commissioner of Income Tax Appeals. Aggrieved against the same, the present writ appeal is filed by the petitioner/appellant. 4. The learned counsel appearing for the appellant contended that by virtue of Clause 90 (3) and Clause 92 of the Finance (No.2) Act, 1998, under which the Kar vivad Samadhan Scheme was introduced, any issue in respect of which a declarant has opted for scheme shall not be reopened in any other proceedings under the Direct Tax enactment. He further contended that the Assessing Officer has no power or jurisdiction under Section 155 of the Income Tax Act, 1961 to reopen the assessment. 5. In support of his contention, he relied on the judgment of the Supreme Court reported in 2006 (7) SCC 642 (Duncans Agro Industries Ltd. -vs- Commissioner of Central Excise, New Delhi), wherein the Supreme Court held that the amount finally determined as due for the entire period of 10 years from the assessee having been settled under the Kar Vivad Samadhan Scheme, there is no scope for any further review or determination of that issue by any authority under the Act. Further, referring to the judgment of the Supreme Court in Hira Lal Hari Lal Bhagwat -vs- CBI (2003) 5 SCC 257); CBI -vs- Duncans Agro Industries Ltd (1996) 5 SCC 591) and Sushila Rani -vs- CIT (2002) 2 SCC 697), the Supreme Court held that after the grant of certificate under the Kar Vivad Samadhan Scheme, 1998 as having settled the dispute and payment of the amount determined, no further proceedings could be initiated with for the period in question. 6. On the other hand, the learned counsel for the respondent contended that the Department has got power under the abovesaid provision to re-open the assessment under Section 155 of the Income Tax Act, 1961. 7. The learned counsel for the respondent has also relied on the judgment of the Supreme Court reported in Vol.258 (2002) ITR 627 (Killick Nixon Ltd. -vs- Deputy Commissioner of Income Tax and others), wherein the Supreme Court held as follows:- ''As far as the provisions of the Kar Vivad Samadhan Scheme are concerned, we agree with the contention of the learned senior counsel for the assessee that the order to be made by the designated authority under Section 90 is a considered https://hcservices.ecourts.gov.in/hcservices/ order which is intended to be conducive in respect of tax arrears and sums payable after such determination towards full and final settlement of tax arrears. Once the declarant makes payment of the amount so determined under section 90, the immunity under section 91 springs into effect. We are also of the view that upon such declaration being made, tax arrears being determined, paid and certificate issued under the Kar Vivad Samadhan Scheme, there is no justification for the Assessing Officer to reopen the assessment by a notice under section 143 of the Act except where the case falls under the proviso (2) of sub-section (1) of section 90 as it is found that any material particular furnished in the declaration is found to be false. In the present case, it is not the case of the Revenue that any material particular furnished by the appellant-assessee in the declaration was found to be false. Consequently, the Assessing Officer could not have reopened the assessment by a notice under section 143 of the Act." 8. After going through the authorities relied on, we are not able to understand as to how this judgment is helpful to the respondent, but on the other hand, it is helpful to the appellant. In the facts and circumstances of the case, the order of the learned Single Judge is set aside. Writ petition is allowed. In the circumstances, there will be no order as to costs. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar js To The Income Tax Officer, Ward No.I (3), Virudhunagar. 1 cc To M/s.P.J.Rishikesh, Advocate, SR.1937. 1 cc To Mr.Pushya Sitaraman, Standing Counsel for I.T.Cases, SR.6385. W.A.No.1568 of 2006 AVM(CO) RVL 10.03.2008 https://hcservices.ecourts.gov.in/hcservices/