Law:

Section:

Section 90 of the Finance (No. 2) Act, 1998, read with section 154 of the Income-tax Act, 1961 - Kar Vivad Smadhan Scheme - Assessee-company filed its return of income - Assessing Officer made prima facie adjustments under section 143(1)(a) and enhanced tax liabilities - Against order assessee filed application for rectification as well as appeal before Commissioner - Since tax was not paid in compliance with section 249, appeal was not disposed of - However, Assessing Officer partially accepting assessee's application reduced liability - On 30-12-1998 assessee filed an application for revision under section 264 which was still pending - Assessee declared income under KVSS on 31-12-1998 - Before designated authority, i.e., Commissioner could pass an order to Assessing Officer in exercise of his power under section 154 deleted addition which was made by him - Designated Authority held that since income as returned by assessee was accepted, no dispute existed on date of declaration and said issue would not come under KVSS - Whether Assessing Officer having already exercised power under section 154, reducing liabilities of assessee, it concluded matter as to prima facie adjustments and he could not subsequently apply his mind again to delete adjustments to make assessee's declaration under KVSS infructuous on ground that no dispute was pending - Held, yes - Whether, therefore, subsequent exercise of jurisdiction under section 154 by Assessing Officer on his own was only with a view to prevent assessee from receiving benefits of KVSS and such order suffered from malice which was required to be quashed - Held, yes - Whether basic concept of tax arrears as well as conditions which makes a person eligible to make a declaration of tax arrears have direct relevance to date of…

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