SMT. SUSHILA RANI vs. COMMISSIONER OF INCOME TAX AND ANR.

CIVIL APPEAL No. 938/2002Supreme Court[2002] 1 S.C.R. 80904 February 2002Bench: 2 JudgesAuthor: S. RAJENDRA BABU, RUMA PAL SMT. SUSHILA RANI8 pages
AI SummaryAllowed

What did the Supreme Court hold?

The Supreme Court held that a certificate issued under Section 90(1) of the KVSS is conclusive as to the matters stated therein and cannot be reopened in any proceedings, except on the ground of a false declaration. The Court found that the Revenue's notice was based on the premise that adjustments already made had not been taken into account, not on any allegation of a false declaration. The Court noted that this information was available to the Department even at the time of finalising proceedings under Section 90. Furthermore, the assessee had specifically stated in her declarations that refunds adjusted without following the mandatory procedure of Section 245 would remain tax arrears, and the Department accepted the declarations on this basis. Therefore, the Revenue could not take a different stand. Even if the KVSS authorities had inherent powers to correct clerical or arithmetical errors, such errors must be obvious and patent, not requiring debate or investigation of facts, which was not the case here. The appeal was allowed, the High Court's order set aside, and the notice issued by the Department quashed.

What were the facts?

The assessee, Smt. Sushila Rani, widow of the original assessee, filed declarations under the Kar Vivad Samadhan Scheme (KVSS), 1998, for assessment years 1988-89, 1989-90, and 1990-91. She also indicated that refunds for assessment years 1989-90 and 1991-92 had been adjusted by the Department involuntarily. The Revenue, satisfied with the declarations, issued certificates under Section 90(1) of the KVSS, determining the tax arrears. The assessee deposited the determined amounts. Subsequently, the Revenue issued a show-cause notice to amend the Section 90(1) certificate, citing a calculation mistake due to unconsidered adjustments. The assessee filed a writ petition before the High Court, which was disposed of with an observation that the Department could consider the jurisdiction issue. The assessee then appealed to the Supreme Court.

What were the issues?

1. Whether a certificate issued under Section 90(1) of the Kar Vivad Samadhan Scheme, 1998, determining tax arrears, is conclusive and cannot be reopened, except on the ground of a false declaration? (Question of law) 2. Whether the Revenue can reopen a determination made under Section 90(1) of the KVSS based on alleged calculation errors when the basis of the original declaration, which included the adjustment of refunds, was accepted by the Revenue? - Assessee's contention: The certificate issued under Section 90(1) is conclusive and cannot be reopened unless a false declaration is made. The Revenue accepted the declarations on the basis that adjustments made without following the mandatory procedure of Section 245 of the Income Tax Act would still be considered tax arrears. The Revenue's attempt to reopen the matter based on alleged calculation errors, when the information was available at the time of finalization, is impermissible. Relied on the decision in U.P. State Mineral Development Corporation Ltd. v. Additional CIT. - Revenue's contention: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 245,Section 88,Section 89,Section 90,Section 91

AI-generated summary — verify with the full judgment below

> SMT. SUSHILA RANI v. COMMISSIONER OF INCOME TAX AND ANR. FEBRUARY 4, 2002 [S. RAJENDRA BABU AND RUMA PAL, JJ.] Income Tax Act, 1961-Section 245-Kar Vivad Samadhan Scheme, 1998-Ss. 88, 89 and 90. A B Assessee filed declarations for computing tax arrears under KVSS C Scheme and objected to adjustment of refund before Revenue-On being satisfied with the corrnrtness of declarations a certificate determining arrears of tax was issued under Section 90(1) of the Scheme-Tay; deposited-No demand/arrear of tax certificate was issued-Assessee filed refund application-Revenue issued notice for amendment in the certificate issued D earlier-Assessee filed Writ Petition before High Court-Disposed of without expressing opinion, however, observed that question relating to lack of juri iction in issuing notice could be considered by the Department-On appeal, held, a certificate issued under Section 90(1) of KVSS making a determination as to the sum payable under the Scheme is conclusive as to the matter stated therein and cannot be re-opened in any proceeding except on E the ground of false declaration-Basis of notice is that the adjustment already made had not been taken n

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 245

All 62 judgments and leading authorities on Section 245 →

Recent GST High Court judgments

Search GST case law →