The Supreme Court has held that once the Income Tax Settlement Commission has finally and conclusively settled an assessee's income for a given assessment year under Chapter XIX-A of the Income-tax Act, 1961, the tax department cannot reopen or reassess that same income through ordinary reassessment proceedings, even years after the settlement order.
The ruling in favour of Omaxe Limited reinforces the finality the Act attaches to a Settlement Commission order — a settlement is meant to be a conclusive resolution of the assessee's tax liability for the matters covered, not a provisional determination the department can later revisit through a fresh reassessment notice on the same facts and figures.
For assessees who have gone through the settlement route, the decision provides real assurance that a genuine, final settlement order actually closes the book on the income it covers, rather than leaving them exposed to reassessment risk on the same income indefinitely into the future.