This is bunch of 284 appeals concerning 96 assessees. assessment years involved fall within asst. yrs. 1981-82 to 1984-85. All these appeals are filed by concerned assessees against revision orders passed by CIT under s. 263 of IT Act, 1961. facts and circumstances of all these cases are exactly identical and revision orders have been same in all these cases and therefore, these appeals are clubbed together for joint hearing and analogous disposal. In all these appeals, almost all grounds are common except for certain other grounds relating to different factual matrix. main controversy arising in all these appeals is whether income of main trust assessed on substantive basis and liability finally settled under Kar Vivad Samadhan Scheme, 1998 (hereinafter referred to as KVSS) could be again assessed in hands of corresponding beneficiaries who have been assessed on protective basis. grounds raised in all these appeals relate to merits of case as well as on jurisdiction exercised by CIT under s. 263 of IT Act, 1961. On this issue there are two conflicting views of Tribunal, one in favour of assessee by holding that as main trust have availed benefit of KVSS with regard to beneficiary s share income and interest payment, benefit should be given to beneficiary trusts as otherwise it would amount to double taxation. These cases are Shantaben Karsanbhai Patel OSDFT & Ors. in ITA Nos. 213 & 236/Ahd/1987, dt. 3rd April, 2000. other view is that main trust and beneficiary trust are two different assessees and if main trust has settled its dispute under KVSS, there is no question of giving any consequential benefit to beneficiary because that is not order on merits and there is no question of double taxation. These cases are following: Janak Pramodbhai Patel being ITA Nos. 1804 to 1808/Ahd/1996 for asst. yrs. 1988-89, 1990-91 to 1992-93. Bharat & Piyush ODFT being ITA Nos. 2191 and 1961/Ahd/1987 for asst. yr. 1982-83. Pramodbhai Kanjibhai Patel (HUF) being ITA Nos. 1808 and 1809/Ahd/1996 for asst. yrs. 1989-90 and 1990-91. Therefore, matter was referred to Hon ble President for constituting Special Bench and Hon ble President has constituted this Special Bench to decide following issue: "The entire appeals are to be heard as Special Bench without any specification of particular question. Copies of grounds of appeal in ITA 2401/Ahd/2003 are enclosed herewith (as Annexure)." In course of hearing of these appeals, case of Shanta K. Patel Oral Specific Deferred Family Trust, relating to asst. yr. 1983-84 (ITA No. 2158/Ahd/2003 has been taken as representative case for sake of presenting and arguing cases. facts relating to said assessee overall represent other remaining cases and, therefore, it was agreed in general that it would be sufficient to hear said case as representative one. Shanta K. Patel Oral Specific Deferred Family Trust is beneficiary of SK Patel Family Trust (hereinafter referred to as main trust). Shanta K. Patel Oral Specific Deferred Family Trust is entitled for 3 per cent beneficiary share in main trust. main trust has filed its returns of income for asst. yr. 1983-84 on total income of Rs. 1,42,66,176 which was further distributed among beneficiaries leaving nil income in hands of main trust. Shanta K. Patel Oral Specific Deferred Family Trust (hereinafter referred to as assessee) filed return of income in its individual status. income returned by assessee consisted of 3 per cent beneficial share from main trust, independent interest income received from main trust and other income of its own. total income returned by assessee was Rs. 4,69,150. Tax was also paid by assessee on said amount of income returned by it. In above scenario, assessment of main trust was completed under s. 143(3) r/w s. 161 of IT Act, 1961, recording income of main trust as nil and accepting distribution of income among beneficiaries. But subsequently, assessment order was revised by CIT under s. 263 on ground that 51 per cent of income needs to be assessed in hands of trustees for and on behalf of beneficiaries listed in Sch. II of trust deed. Maximum marginal rate of tax was also to be levied on said income. impugned representative assessee is beneficiary listed under Sch. II of trust deed. When revision order was carried in appeal before Tribunal, Ahmedabad Bench, revision order of CIT was vacated through its order passed in ITA Nos. 1135 to 1138/Ahd/1985. Tribunal restored order of AO that income should be assessed in hands of beneficiaries as originally done by assessing authority. Revenue thereafter filed reference application before Tribunal in RA Nos. 85 to 88/Ahd/1995. Allowing reference application filed by Revenue, Tribunal referred following question for esteemed opinion of Hon ble Gujarat High Court: "Whether Tribunal is right in law and on facts in holding that tax was not attracted as trust was specific and non-discretionary trust wherein beneficiaries and their shares were known and determinate?" While matter was resting so, Government of India promulgated Kar Vivad Samadhan Scheme, 1998. When Scheme was pronounced by Government, assessee was fighting its case against finding of Revenue and matter was lying before Hon ble High Court under reference that income should be assessed in hands of main trust. main trust thought it fit to best of their wisdom and judgment that matter be settled under Scheme and dispute be buried. main trust accordingly filed applications before concerned CIT for settlement of dispute under KVSS. application put in by main trust was accepted by CIT, Gujarat-I and as trust has already paid amount of tax as prescribed under Scheme, matter was treated as settled and certificate in Form No. 4 prescribed under Scheme was issued by CIT on 2nd July, 1999, as conclusive evidence of compliance under KVSS. As dispute has been settled under KVSS, Hon ble High Court of Gujarat disposed of income-tax reference pending before it in limine on ground that reference did not survive any more. Now coming to assessment of beneficiary, in light of return filed by it, assessee trust was assessed under s. 143(3) r/w ss. 164 and 164A of IT Act, 1961. Income was assessed at Rs. 4,70,780 and tax was charged at maximum marginal rate as stated in assessment order. As Department has proposed view that income should have been assessed in hands of main trust itself, assessment of beneficiary trust was made on protective basis. relevant portion of assessment order in para 17 thereof is extracted below for easy understanding of issue: "17. In case of S.K. Patel Family Trust, of which assessee trust is beneficiary, tax has been charged at maximum marginal rate. This order is, therefore, without prejudice to view taken in case of main trust regarding question of genuineness of said trust. In view of this fact, income of trust is taken as per return of income furnished on protective basis." As assessment was protective in nature, demand arising out of assessment was kept in abeyance. This assessment was taken in first appeal and order was passed on 10th Nov., 1986. Against order of first appellate authority, cross-appeals were filed before Tribunal, one by Revenue and other by assessee. Tribunal passed common order to dispose of cross-appeals in ITA No. 213/Ahd/1987 and others on 3rd April, 2000. Appraising facts of case relating to main trust as well as assessee, Tribunal held as under: "In view of circumstances, I set aside impugned orders and remit issue back to AO for fresh consideration and while doing so, AO shall consider fact that main trust had already paid tax to Department by way of KVSS. Therefore, same additions cannot be made in hands of present beneficiaries otherwise that will amount to double taxation." Subsequent to above order of Tribunal, assessee moved before Revenue for refund of tax attributable to income settled in hands o f main trust under KVSS. AO accepting prayer of assessee passed order under s. 154(1)/155(2) on 22nd Aug., 2000, allowing prayer of t h e assessee and accordingly excluded income of main trust settled under KVSS from assessment order of assessee beneficiary trust as result of which refund was also issued. facts of case stated in above paragraphs may be summarized f o r better clarity. assessee along with other beneficiary trusts are beneficiaries of main trust, S.K. Patel Family Trust, having share of income from main trust and also interest income from main trust along with their individual incomes. Assessees took stand that income attributable to beneficiary trusts are to be assessed in individual hands of beneficiary trusts whereas Revenue took view that income of main trust should be assessed in its own hand. substantive assessment was completed in hands of main trust while protective assessments have been completed in hands of respective beneficiaries. dispute regarding taxability of income in hands of main trust reached upto jurisdictional High Court in reference application. While reference was pending before Hon ble jurisdictional High Court KVSS was pronounced by Government under which main trust settled dispute of taxability of income in its hand by paying appropriate tax and securing relevant certificate of compliance from concerned CIT. As income which has to be taxed either in hands of main trust or in hands of individual beneficiary trusts having already been settled under KVSS and taxed in hands of main trust, beneficiary trusts moved before assessing authority for exclusion of that part of income from respective assessments. AO accepted contention as share income from main trust included in income of beneficiary trust has already been settled under KVSS. As income attributable to main trust has been excluded from individual assessments of beneficiary trusts, it resulted in refund of tax already paid along with interest. Now second stage of case begins. Once AO has passed order under s. 154(1)/155(2) of Act and granted refund to assessee, who is beneficiary trust, CIT invoked his powers under s. 263 and revised orders. In all cases involved in impugned bunch of 284 appeals, CIT has passed such revision orders. revision orders have been passed by CIT on following premises: (i) AO has failed to take cognizance of legal implication of KVSS, 1998, which confine benefits, as per s. 94 of KVSS, 1998 only to declarant with reference to KVSS, 1998, that too, in relation to tax arrears declarant with reference to KVSS, 1998, that too, in relation to tax arrears of declarant, as on 31st March, 1998. (ii) benefit of another declarant of KVSS, 1998 was erroneously extended by AO in violation of provisions contained in s. 94 of KVSS, 1998. Therefore, order of AO suffered from serious errors of law and thereby causing prejudice to interest of Revenue. (iii) AO has failed to take notice of apparent legal implications of s. 90(2) r/w s. 93 of KVSS, 1998, that no tax paid in pursuance of declaration is liable to be refunded. (iv) law on this point has been clarified by Gujarat High Court in case of Sunderlal Uttamchandani in SCA 1093 of 2000 wherein claim of partner for refund of tax denied by Department has been upheld by High Court, where claim was made on basis of declaration made by firm under KVSS, 1998. Court held that there was no tax arrears against partner and, therefore, he was not entitled to take any benefits of KVSS, 1998 sought and settled by firm. (v) AO has further erred in granting interest under s. 244A which was in direct contravention of provisions of law contained in s. 244A(2). sub- section provides for exclusion of period of delay attributable to assessee. As matter has to be finally determined either by Chief CIT or CIT, AO has exceeded his jurisdiction in granting interest under s. 244A without looking into law contained in sub-s. (2) thereof. CIT, on basis of above reasons, set aside orders passed b y assessing authority under s. 143(3)/154(1)/155(2) as erroneous and prejudicial to interest of Revenue. orders of assessing authorities were cancelled. CIT further directed assessing authorities to recompute income by including income attributable to main trust. He also directed to withdraw refund along with interest paid thereon. All these present appeals are directed against above revision orders passed by CIT. Shri S.N. Soparkar, learned counsel appearing for assessees argued cases in detail, which are summarized below: That incomes have been substantively assessed in hands of main trusts, by virtue of revision orders passed under s. 263 by CIT which have been subsequently settled under KVSS in hands of main trusts themselves. While completing substantive assessments, interest was disallowed on ground that it was paid to self. share of profits and interests attributable to beneficiaries have been again protectively assessed in their hands. These disputes that whether to be assessed in hands of main trust or in hands of beneficiaries continued and existed till final settlement arrived at under KVSS. That it is not proper to argue for Revenue that dispute was not continuing and prevailing at relevant point of time. reference applications made by Revenue against orders passed in case of main trusts were pending before jurisdictional High Court for adjudication. AO has mentioned in order that orders of Tribunal and jurisdictional High Court have not been accepted by Revenue. That Special Leave Petition filed by Revenue before Hon ble Supreme Court in case of Harsiddh Specific Family Trust was dismissed on 28th Jan., 2003. That, therefore, it is necessarily to be held that controversy was continuing and prevailing. That CIT had no jurisdiction to revise orders as subject-matter of orders have already been settled before higher/competent authorities in various proceedings carried out from time to time in past in these group cases. Department had first filed writ petitions which were withdrawn for filing tax appeals in which cases, Court has held as under in judgment dt. 30th July, 2001: "In our opinion, no question of law, much less substantial question of law, arises in these appeals. It is settled principle that one particular income cannot be taxed in hands of different assessees. In instant case, as income has been substantively assessed in hands of main trust, same income cannot be again assessed in hands of beneficiary trusts. For sake of abundant caution, it has been directed by Tribunal that Revenue should look into facts and see whether income which has been assessed on protective basis in hands of respondent trusts was, in fact, assessed in hands of main trusts." That Department has not filed Special Leave Petitions against above judgments before Supreme Court. That it has later on filed review petition which was dismissed by Hon ble Gujarat High Court vide its judgment passed on 5th Sept., 2003. That, further in another judgment dt. 14th Aug., 2002, Hon ble Gujarat High Court has not inclined to agree with earlier judgment dt. 30th July, 2001 and that petition was listed before larger Bench. order was passed by larger Bench. Before larger Bench when materials were placed by Revenue for reliance, it was observed by Court as follows: "7. Having regard to fact that learned senior counsel for petitioner wants to rely on material not earlier produced before Tribunal in support of contention which does not appear to have been specifically raised on basis of fresh material which was not produced, it appears to us that it would be appropriate for petitioner to raise contentions which are sought to be raised before this Court but were not raised before Tribunal, in their application for revising and/or modifying order of Tribunal along with fresh material on which petitioner seeks to rely in support thereof. On such application being made by petitioner, Tribunal shall consider same and after hearing concerned parties, take decision thereon in accordance with law." That when larger Bench of High Court has not reversed decision of division Bench of Gujarat High Court rendered on 30th July, 2001, decision of Hon ble High Court rendered in judgment dt. 30th July, 2001 is binding on all lower authorities. Court has held therein that once income assessed in hands of main trusts on substantive basis, same income cannot be assessed in hands of beneficial trusts. Therefore, as said judgment of High Court is surviving and prevailing, CIT had no jurisdiction to revise orders passed by assessing authority in accordance with ratio of said judgment of Gujarat High Court rendered on 30th July, 2001. As said judgment of High Court is binding on CIT, he had no authority at all to pass revision orders after commenting on decision of High Court. That revision orders passed by CIT under s. 263 are not correct. That reliance placed by CIT on decision of Supreme Court in case of ITO vs. CH Atchaiah (1996) 130 CTR (SC) 404: (1996) 218 ITR 239 (SC) to hold that income should be assessed in hands of right person, is misplaced as facts of present cases are different. CIT has held that beneficiaries are right persons to be assessed. This observation is just contrary to stand taken by Department throughout. In present case, income has been assessed in hands of main trusts on substantive basis and assessments in hands of beneficiaries were made only on protective basis. above decision has no application in present case. As held by Gujarat High Court in case of Banyan & Berry vs. CIT (1996) 131 CTR (Guj) 127: (1996) 222 ITR 831 (Guj) making protective assessment does not affect validity of other assessments inasmuch as if ultimately one of entities is really found to be liable to assessment, then assessment in hands of that entity alone remains and protective assessment of other becomes infructuous. Court has held that levy is enforceable only under one assessment and not under both. That in view of above decision revision order passed by CIT is against law. That in similar case, Supreme Court in case of C.R. Nagappa vs. CIT (1969) 73 ITR 626 (SC) has held that there cannot be any such double taxation. Assessments in hands of settlor s minor children of income from assets settled in trusts for their benefit by settlor will affect validity of inclusion of trust income in hands of settlor but assessment of minor beneficiaries cannot stand in view of assessment of settlor under s. 64(v). That Calcutta High Court in case of Jagannath Hanuman Bux vs. ITO (1957) 31 ITR 603 (Cal) has examined scope of protective assessment. Court has held that protective assessment is made in order to avoid bar of limitation but recovery is not possible from such assessments. That reliance placed by CIT in case of Shankarlal Nebhumal Uttamchand vs. CIT 257 ITR 876 (sic) is misplaced as that case was not applicable to present case. In Shankarlal Nebhumal Uttamchand s case it was case of partnership firm and partners wherein at that point of time IT Act provided for double taxation of income once in hands of partnership firm and second in hands of partners. In view of decisions in cases of Banyan & Berry, C.R. Nagappa, and Jagannath Hanuman Bux (supra), it is crystal clear that decision in case of Shankarlal Nebhumal Uttamchand (supra) is not relevant in context of present cases. That CBDT has dealt with protective assessments in its Circular No. 71 dt. 20th Nov., 1971. direction issued by Board under s. 119(2)(b) in said circular deals with scope of protective assessments. circular reads: "Order under s. 119(2)(b) of IT Act, 1961 Board s authorization for taking action under s. 154 beyond time-limit fixed under s. 154(7) in cases of protective assessments requiring to be cancelled. Where same income was assessed, as protective measure, in hands of more than one assessee or as income of more than one assessment year, and one or more of these protective assessments needs to be cancelled as result of some of relevant assessments having become final and conclusive, it has been practice of IT Department to cancel redundant assessment under s. 154 of IT Act, 1961, treating these as involving mistakes apparent from records. This is being done by ITOs either suo motu or on applications made by assessees. Sometimes, it is not possible to take decision under s. 154 in such cases because of operation of time-limit laid down in sub-s. (7) of s. 154 o f IT Act, 1961. Since operation of this time-limit causes genuine hardship to affected assessee, CBDT, in exercise of powers vested in them under cl. (b) of sub-s. (2) of s. 119 of IT Act, 1961, hereby authorizes t h e ITOs to take action under s. 154, or to admit or dispose of on merits applications under s. 154 filed by assessees seeking relief, for cancelling such protective assessments as have become redundant, by waiving, if necessary, time-limit fixed under sub-s. (7) of s. 154 of IT Act, 1961." That speaking circular issued by Board on such crucial issue is not less than binding on officers of Department. That Supreme Court has in series of decisions highlighted binding nature of circulars issued by CBDT. Reliance placed on decisions of Supreme Court in case of CIT vs. Anjum M.H. Ghaswala & Ors. (2001) 171 CTR (SC) 1: (2001) 252 ITR 1 (SC), UCO Bank vs. CIT (1999) 154 CTR (SC) 88: (1999) 237 ITR 889 (SC), CCE vs. Dhiren Chemical Industries (2002) 172 CTR (SC) 670: (2002) 254 ITR 554 (SC) and Union of India & Anr. vs. Azadi Bachao Andolan & Anr. (2003) 184 CTR (SC) 450: (2003) 263 ITR 706 (SC). Shri Soparkar, after arguing on jurisdiction of CIT to pass orders under s. 263, nature of protective assessments and applicability of circulars issued by CBDT further contended that CIT went wrong in arriving at his findings regarding refund of tax and interest to beneficiary trusts. He submitted that for elaborate reasons already explained before Tribunal, tax has been rightly refunded by assessing authority at first instance. When portion of income already assessed in hands of main trusts is excluded from assessments of beneficial trusts, proportionate amount of tax due and paid by assessee should be refunded. It is natural and legal consequence of exclusion of income from assessment. He referred to reliance placed by Revenue on decision in case of Saurashtra Cement & Chemical Industries vs. ITO (1992) 102 CTR (Guj)(FB) 212: (1992) 194 ITR 659 (Guj)(FB). He submitted that said decision related to case of annulled assessment. Court held therein that in absence of assessment, income would be escaped and assessee cannot be granted refund in respect of such income which is offered in return itself. He explained that in present case, assessments were made in both cases, i.e., in case of main trusts on substantive basis and in case of beneficiary trusts on protective basis. He, therefore, submitted that when protective assessment is neutralised as far as income assessed in hands of main trusts is concerned, that much of refund is essentially to be made. main trusts is concerned, that much of refund is essentially to be made. learned counsel further submitted that CIT has gone wrong in holding that no interest should also be paid on refund made to beneficial trusts. He submitted that delay was not attributable to assessee in matter of assessment and refund. There is no question of delay on part of assessees in these cases. matters came to be settled once KVSS was pronounced. When amount is rightfully to be refunded to assessee and if there is delay in such refund, as stated in law, interest is to be paid especially when interest is compensatory in nature. Shri Manish Bhatt, learned standing counsel appearing for Revenue argued case at length. learned standing counsel submitted that it is not right on part of assessee to argue that issue in these cases has already been settled by judgment of jurisdictional High Court and, therefore, CIT had no jurisdiction to invoke his revisionary powers under s. 263. appeals preferred by Revenue before High Court in these matters have not been admitted by High Court and, therefore, High Court has not adjudicated issue as such whereby there could be binding order. As appeals were not admitted and rejected in limine, principle of merger does not apply and, therefore, it is not proper to argue that CIT has examined judgment of High Court as far as matter is concerned. learned standing counsel relied on decisions of Tribunal, Ahmedabad Bench in case of Asstt. CIT vs. Minor Janak Pramodbhai Patel dt. 28th Dec., 2001 being ITA Nos. 1804 to 1808/Ahd/1996 [reported at (2003) 80 TTJ (Ahd) 756 Ed., Bharat & Piyush ODFT dt. 3rd May, 2001 being ITA Nos. 2191 and 1961/Ahd/1987 and Shri Pramodbhai Kanjibhai Patel HUF dt. 31st Dec., 2001 being ITA Nos. 1808 and 1809/Ahd/1996. He pointed out that orders passed by Tribunal in cases above are identical and has held that in case of beneficiaries income should be assessed in spite of fact that same has been assessed in hands of main trust under KVSS. learned standing counsel further explained that above decisions of Tribunal have considered all relevant facts of case and vital provisions of law and has come to conclusion which supports order passed by CIT in these cases. Shri Manish Bhatt further contended that tax on disputed income was paid by main trusts as settlement proposed under KVSS. effect of settlement of dispute under KVSS is limited and applicable only to party who sought settlement under said Scheme. KVSS is separate code by itself. Tax disputes are to be settled under KVSS, de hors any other connected proceedings pending before authorities for decision or adjudication. In present case, substantive assessment of income has been made in hands of main trusts. assessees objected to that. But when scheme was pronounced, assessee opted for settlement under KVSS. tax was paid. Certificates were issued. matter ended there. said settlement arrived under KVSS is not ground to defend contention of assessee in another case. learned standing counsel explained that returns were suo motu filed by beneficiary trusts wherein income from main trusts, interest received from main trusts have been returned along with other independent income of beneficiary trusts. Even though assessments were completed on protective basis in those cases, returns were filed by beneficiary trusts in their independent capacities and those returns stand by themselves. settlement of dispute of main trust under KVSS cannot be agitated as res judicata as far as assessments of individual beneficiary trusts are concerned. They are quite different entities. KVSS is in respect of income disputed with respect to demand disputed in case of particular assessee. individual beneficiary trusts were not party to any settlement under KVSS. Their cases stand or die on their own merits. Therefore, there is no legal justification for beneficiary trusts to lean back on KVSS settlement made by main trusts. There is no such nexus as propagated by assessee, between settlement under KVSS as far as main trusts and assessments of individual beneficiary trusts are concerned. learned standing counsel, therefore, submitted that settlement of dispute by main trusts under KVSS could not be treated even as remote ground to make refund of taxes paid by beneficiary trusts while filing their individual returns, not to speak about interest on such refunds. learned standing counsel, therefore, submitted that in these circumstances, Tribunal should uphold revision orders passed by CIT especially in view of judgments of Tribunal, Ahmedabad Bench in cases of Shri Janak Pramodbhai Patel, Bharat & Piyush ODFT and Shri Pramodbhai Kanjibhai Patel (supra). He submitted that appeals filed by assessees are liable to be dismissed. Shri Soparkar, learned counsel appearing for assessee in his rejoinder submitted that decisions relied on by Revenue in cases of Shri Janak Pramodbhai Patel, Bharat & Piyush ODFT and Shri Pramodbhai Kanjibhai Patel (supra) cannot be relied on as correct decisions. learned counsel, therefore, submitted that entire arguments of Revenue that issue was not adjudicated by High Court and CIT had absolute jurisdiction to initiate revision proceedings under s. 263 is against facts of case. Regarding relationship between regular assessment and KVSS, t h e learned counsel relied on relevant CBDT clarifications. learned counsel has made special reference to question considered by CBDT and answer furnished thereto. question is whether certain income charged to tax in hands of two different persons or where it has been charged to tax in case of same person in two different assessment years, one on substantive basis and other on protective basis, will declarant or other person will get advantage in respect of additions made by them substantively and protectively? answer is that assessees are advised to make declarations in cases or for assessment years where additions are made on substantive basis. protective demand is not subject to recovery unless it is finally upheld. Once declaration in substantive case or year is accepted, tax arrear in protective case/year would no longer be valid and will be rectified by suitable orders in normal course. This position is not peculiar to Samadhan Scheme. learned counsel submitted that in light of above circular, there is not even shadow of doubt that same income cannot be assessed on protective basis once substantive assessment has been settled under KVSS. He submitted that Board itself clarifies that settlement under KVSS has to be made with reference to substantive assessments and if such settlement is acted upon by Department, that substantive assessment stands concluded s final as result of which protective assessment would automatically disappear subject to procedural formalities. learned counsel submitted that circular itself is best ground to allow appeals filed by assessees in these cases. We heard both sides in detail and considered matter in light of earlier orders of different Benches of Tribunal on subject and plethora of materials placed before us along with assessment, appeal and revision orders. first issue that came up for consideration is whether dispute regarding issue involved in these appeals continued to exist at that point of time. We find that this question is quite academic. main trusts have sought settlement of their substantive assessments under KVSS which have been accepted and acted upon by Department. That itself showed that controversy continued and existed at that point of time and there is no doubt that issue was pending before High Court in reference jurisdiction. Therefore, to make matter clear, we state that CIT was not correct in holding that such controversy did not exist. We further find that answer to controversy cropped up in these cases is available in relevant instructions issued by CBDT in context of KVSS, 1998. We have already seen relevant question and answer to question. CBDT has stated in unequivocal terms that declarations are to be made in respect of substantive assessments. Board has clarified that protective demand is not subject to recovery unless it is finally upheld. Board has further explained that once declaration in substantive case or year is accepted, tax arrear in protective case, year would no longer be valid and will be rectified by suitable orders in normal course. In present case substantive assessments have been made by Department in hands of main trusts. Protective assessments have been made in case of beneficial trusts. Main trusts have settled dispute under KVSS. They have paid tax under KVSS in respect of assessments completed in their hands on substantive basis. Therefore, in light of circular, corresponding protective assessments made in hands of beneficial trusts would fade away and demand raised in those protective assessments would no longer be valid. When assessment is not subsisting and demand is not valid, amount paid by assessee along with return subject to protective assessment becomes refundable to assessee. Therefore, we are of considered opinion that AO has rightly accepted prayers of assessees and passed appropriate orders excluding incomes which have already been considered in hands of main trusts under KVSS. Therefore, obviously, AO is justified in following consequential procedure and making refund to assessees. One of basic principles of taxation is that income shall not be taxed twice. In present case, income under dispute is same considered in hands of main trusts and also considered in hands of beneficial trusts. KVSS, 1998 was introduced by Government of India to settle pending litigations at different levels and collect tax once for all and reach finalities in matters connected thereto. Even though KVSS was special Scheme, KVSS did not propose to tax any income twice. Whether under regular provisions of IT Act or under Scheme of KVSS what is to be assessed and subjected to tax is real income once for all. KVSS does not create any artificiality. case of double taxation of same income cannot be endorsed under KVSS. In other words, KVSS, 1998 does not empower IT Department to tax same income more than once. This must be made very clear. What are simple facts available in these cases? incomes of main trusts have been distributed to beneficiary trusts. beneficiary trusts have filed returns in their individual hands. This position was not accepted by Revenue. Therefore, substantive assessments have been made in hands of main trusts. In abundant precaution, protective assessments have been made in hands of respective beneficiary trusts. Suppose proposition made out by Department was acceptable to assessee and substantive by Department was acceptable to assessee and substantive assessments made in hands of main trusts have been accepted by assessee, what would be position of corresponding protective assessments made in hands of beneficiary trusts? protective assessments would have become invalid as result of which Revenue would refund amount of tax if any paid by beneficiary trusts while filing returns of income in their individual capacities. There cannot be any dispute on this proposition. Is it possible to hold that above position would be disturbed only because of intervention of KVSS? main trusts have settled their substantive assessments under KVSS which for all practical purposes is equivalent to finally settling substantive assessments in their hands. final outcome of whole process is not different from substantive assessments having been accepted by assessees as such or having been settled under available Scheme known as KVSS, 1998. In either case protective assessments become invalid whereby no demand can be enforced against those protective assessments. consequence is that if assessees have paid any amount of tax along with their returns considered for protective assessments, such taxes have to be refunded to them. We do not find much force on reliance placed by learned standing counsel on decision of Gujarat High Court in case of Saurashtra Cement & Chemical Industries vs. ITO (supra). In that case there was no assessment at all and question of refund was considered in that perspective which is quite different from present case. income involved in substantive assessment as well as in protective assessments are one and same. income has been assessed substantively in hands of main trusts and demand subsequently settled under KVSS. It is quite unnecessary to repeat that income has already been assessed in hands of main trusts. Therefore, nothing remains thereafter to be assessed in hands of beneficiary trusts, as far as income of main trust is concerned. Moreover, case of assessment can be contemplated in present cases because stand taken by assessees is that income of main trusts has to be assessed in hands of individual beneficiary trusts. It is on basis of that proposition that returns were filed by beneficiary trusts. While returns were filed by beneficiary trusts in their individual capacities, they are in fact offering income for taxation. Sec. 140A provides that when assessee files return of income and where tax is due as per said return, tax shall be paid by assessee before filing return of income and proof of such payment of tax shall be accompanied along with return of income. This is called self-assessment. When assessee files return with positive income and remits tax thereon under s. 140A, in fact, assessment is being contemplated even though it is "self-assessment". Later on, when it is found that income covered by said return is not taxable, tax paid by assessee in pursuance of that return has to be returned by Revenue. Therefore, refund of tax is must in this case. proposition made by CIT against refund of tax is not proper. Regarding grant of interest also, position is very clear. As already observed in above paragraph, refund of tax in present case is mandate of law. When such refund is called for, interest has to be paid as interest is compensatory in nature. It always moves with principal amount. There is no substance in argument of Revenue that delay in refund was caused because of conduct of assessees. In fact, assessee was questioning proposition of Revenue to assess income in hands of main trusts. That is why beneficiary trusts have filed their individual returns of income disclosing benefits received from main trusts also. But when KVSS was pronounced by Government of India, it was for assessees to decide whether to take benefit out of that or not. Therefore, it is only when KVSS was promulgated, assessee had occasion to make move and settle dispute. So also proceedings were locked up in different appellate forums. Therefore, there is no merit in argument of Revenue that delay was caused by conduct of assessees. Therefore, we also find that AO has rightly granted interest to assessees on refunds due to them. It is also necessary for us to consider legal issue raised by assessee in respect of jurisdiction exercised by CIT, under s. 263 of IT Act, 1961. facts narrated in above paragraphs while dealing with issues on merit bring home point that right from beginning, Revenue was of view that impugned income need to be assessed in hands of main trusts and it was on basis of that proposition, assessment orders were passed by Revenue; that assessments have been made on substantive basis on main trusts. As already stated, assessments were repeated in hands of beneficiary trusts on protective basis. assessee always objected to above proposition made out by Revenue. It is for that reason matters were taken before appellate authorities. When these matters were pending before different authorities that KVSS was promulgated and assessee got occasion to settle dispute by accepting impugned income to be assessed in hands of main trusts on substantive basis. main trusts paid taxes as per KVSS and certificates were issued by concerned authorities in compliance thereof. beneficiary trusts having already been assessed on protective basis, rectification petition under s. 154 was filed before AO to exclude impugned income from assessments of beneficiaries. AO, on basis of KVSS orders and relevant records, passed orders under s. 154 excluding income from hands of beneficiary trusts which resulted in refund of tax along with interest. Gujarat High Court has already in one of group cases of assessees passed order dt. 30th July, 2001 in which Court has held that one and same income cannot be taxed in hands of different assessees. In present case, when dispute regarding assessment of income has already been settled under KVSS there was nothing to be assessed in hands of beneficiaries. As far as above mentioned order of Gujarat High Court is concerned, Revenue has not proceeded further by way of Special Leave Petition before Supreme Court. Revenue had filed review petition before High Court which was dismissed on 3rd Sept., 2003. larger Bench of Gujarat High Court through its order dt. 14th Aug., 2004 has not reversed said decision of Division Bench rendered on 30th July, 2001. Under these circumstances, Revenue authorities working within jurisdiction of Gujarat High Court have to pass orders in light of orders and judgments of said High Court. In present case, as income was finally offered for tax in hands of main trusts and settled under KVSS, there was no reason to keep protective assessments alive, in hands of beneficiary trusts. In this context, learned senior standing counsel had argued that returns were filed by beneficiary trusts themselves and so even after assessed by Revenue authorities on protective basis, income returned in those returns should not be excluded from hands of beneficiary trusts and, therefore, no refund/interest should have been allowed to them. above argument, we find, is not sustainable in light of judgment of Hon ble Gujarat High Court in case of S.R. Koshti vs. CIT (2005) 193 CTR (Guj) 518: (2005) 276 ITR 165 (Guj), wherein it was held as under: "A word of caution. authorities under Act are under obligation to act in accordance with law. Tax can be collected only as provided under Act. If assessee, under mistake, misconception or on not being properly instructed, is overassessed, authorities under Act are required to assist him and ensure that only legitimate taxes due are collected. This Court, in unreported decision in case of Vinay Chandulal Satia vs. N.O. Parekh, CIT, Special Civil Application No. 622 of 1981, rendered on 20th Aug., 1981, has laid down approach that authorities must adopt in such matters in following terms: Supreme Court has observed in numerous decisions, including Ramlal vs. Rewa Coalfields Ltd. AIR 1962 SC 361, State of West Bengal vs. Administrator, Howrah Municipality AIR 1972 SC 749, and Babhutmal Raichand Oswal vs. Laxmibai R. Tarte AIR 1975 SC 1297, that State authorities should not raise technical pleas if citizens have lawful right and lawful right is being denied to them merely on technical grounds. State authorities cannot adopt attitude which private litigants might adopt." In view of above, we find that orders passed by assessing authority were not erroneous; but, on other hand, were just and proper. As we find no error in orders of assessing authority we find that CIT had no jurisdiction to invoke s. 263 and pass revision orders contested herein. Now we conclude here. For reasons stated above, both on merit as well as in law, we find that revision orders passed by CIT in these cases are not sustainable in law. Accordingly we quash revision orders and restore orders of assessing authority issuing refund with interest due thereon. Certain other contentions are raised in respect of certain assessees before us. But all those contentions related to orders passed before revision action taken by CIT. Therefore, all those issues are to be treated as merged with earlier orders. Therefore, we find that there is no need to discuss each such contention as main controversy in these cases has already been decided and matter has been held in favour of assessees. In result, all these appeals are allowed. *** PUNITABEN KARSANBHAI PATEL ORAL SPECIFIC DEFERRED FAMILY TRUST & ORS. v. INCOME TAX OFFICER