Judgment R. Sudhakar, J. 1. This appeal is filed by the Revenue challenging the order of the Income Tax Appellate Tribunal Bench 'D' Chennai, dated 16.12.2005 made in ITA No.1113/Mds/2003, for the assessment year 1994-1995. 2.1. The brief facts of the case are as under: The assessee is engaged in the manufacture of textiles and fabrics. The machineries used in the said manufacturing process are subject to wear and tear. Some of the machinery parts were replaced from time to time and the assessee claimed the expenditure on replacement of such machinery parts as revenue expenditure. The Department did not accept this plea and treated the expenditure as capital expenditure. 2.2. Initially, the said issue cropped up in the assessment years 1991-1992 and 1992-1993 and the issue as to whether such expenditure on replacement of machinery parts would be revenue expenditure or capital expenditure was resolved by way of a revision order and as a result, the assessee filed a rectification petition in terms of Section 154 of the Income Tax Act (for brevity, “the Act”) for the assessment year 1994-1995 and an order came to be passed by the Joint Commissioner of Income Tax, Special Range-I, Coimbatore, on 20.4.2000, determining the total income at Rs.2,61,46,290/- and the tax payable thereon was determined after adding all statutory claims at Rs.37,40,256/-. At this juncture, it was noticed by the Joint Commissioner of Income Tax, Special Range-I, Coimbatore that on self-assessment under Section 140A of the Act, an higher amount of Rs.77,58,956/- was paid by the assessee and, therefore, there was an excess payment of tax of Rs.40,18,700/-. It was also noted that there are other earlier dues amounting to Rs.60,72,035/- towards refund payable to the assessee and in all the amount refundable to the assessee was arrived at Rs.1,00,90,735/-. To the said amount, a further sum of Rs.12,12,381/- was added, which is the payment of tax made by the assessee voluntarily in terms of the Kar Vivad Samadhan Scheme, 1998 (for brevity, “the KVSS, 1998”). Thus, the total amount refundable was arrived at Rs.1,13,03,116/- together with interest. 2.3. The said order passed by the Joint Commissioner of Income Tax, Special Range-I, Coimbatore was found to be erroneous and prejudicial to the interest of the revenue and hence, a notice under Section 263 of the Act was issued by the Commissioner of Income Tax-II, Coimbatore on 29.11.2002. 2.3. The said order passed by the Joint Commissioner of Income Tax, Special Range-I, Coimbatore was found to be erroneous and prejudicial to the interest of the revenue and hence, a notice under Section 263 of the Act was issued by the Commissioner of Income Tax-II, Coimbatore on 29.11.2002. The Commissioner of Income Tax-II, Coimbatore, after hearing the objections of the assessee, held that the amount of Rs.12,12,381/- paid by the assessee voluntarily under the KVSS, 1998 cannot be refunded and that portion of the order of the assessing officer directing refund of tax paid under the KVSS, 1998 was reversed. 2.4. Assailing the said order, the assessee preferred an appeal before the Tribunal. The Tribunal, placing reliance on Section 93 of the KVSS, 1998, held that the amount paid in pursuance of a declaration under Section 88 of the KVSS, 1998 is not refundable under any circumstances. The relevant portion of the said order reads as under: “4. We have considered the rival submission on either side, and also perused the material available on record. Admittedly, the assessee has filed the declaration under KVS Scheme 1998 and the Designated Authority has determined the tax payable. As determined by the Designated Authority, the assessee has also paid the taxes. In consequence to allowance of additional depreciation, the income returned by the assessee in the regular return was reduced considerably, therefore, there was refund of taxes already paid. In that process, the Assessing Officer refunded the tax paid under Section 140A, self assessment tax and also the taxes paid under KVS Scheme, 1998. The only objection of the Revenue is that the tax paid under KVS Scheme 1998 cannot be refunded under any circumstances. The assessee's contention is that the provisions contained in Sec.93 of the KVS Scheme 1998 is illegal since the Government cannot withhold any money belonging to an individual, when there was no tax liability. 5. We have also gone through the KVS Scheme 1998 enacted by Parliament. The assessee's contention is that the provisions contained in Sec.93 of the KVS Scheme 1998 is illegal since the Government cannot withhold any money belonging to an individual, when there was no tax liability. 5. We have also gone through the KVS Scheme 1998 enacted by Parliament. Sec 93 of the KVS Scheme reads as follows: 'Any amount paid in pursuance of declaration made under Section 88 shall not be refunded under any circumstances.' In view of the above provisions, it is very clear that when the assessee filed a declaration availing benefit under KVS Scheme 1998 and paid the taxes determined by the Designated Authority, the tax paid by the assessee cannot be refunded under any circumstances. In this case, admittedly, the Assessing Officer refunded the tax paid by the assessee under KVS Scheme 1998 and also paid interest thereon. Therefore, in our opinion, there is an error in the order of the Assessing Officer to that extent which is prejudicial to the interests of the Revenue. Therefore, in our opinion, the twin conditions required for invoking power under Section 263 are satisfied. 6. The next contention of the assessee is that Sec.93 of the KVS Scheme 1998 is illegal since the Government cannot withhold any part of the money when the individual has no tax liability. Admittedly, the Parliament has enacted a specific provision prohibiting the refund of the amount under any circumstances which was paid in pursuance of declaration filed under KVS Scheme. This Tribunal is a creature under the Income Tax Act. Therefore, this Tribunal has no power to examine the constitutional validity or otherwise of Sec.93 of KVS Scheme 1998. Therefore, we are unable to accept the contention of the assessee.” 2.5. Aggrieved by the said order passed by the Tribunal, the assessee has filed this appeal and the same was admitted on the following substantial questions of law: “1. Whether on the facts and in the circumstances of the case the Tribunal was right in law in holding that the Assessment Order was erroneous and prejudicial to the interest of the revenue and therefore these twin conditions required for invoking power u/s 263 are satisfied? 2. Whether on the facts and in the circumstances of the case the Tribunal was right in law in holding that the Assessment Order was erroneous and prejudicial to the interest of the revenue and therefore these twin conditions required for invoking power u/s 263 are satisfied? 2. Whether on the facts and in the circumstances of the case the Tribunal was right in not holding that correct depreciation allowed by the Assessing Officer dates back to the original Assessment and therefore all the actions of both the Assessee and the designated Authority in connect with KVSS were void and the refund granted was valid? 3. Whether the provisions of Section 93 of the Finance (No.2) Act, 1998 had the intention to refuse refund in the circumstances of the case of the Appellant?” 3.1. Firstly, we would consider the substantial questions of law (2) and (3) conjointly, as the same are intertwined. 3.2. The learned counsel for the assessee tried to impress upon us that in view of the revision order passed in respect of assessment years 1991-92 and 1992-1993, unabsorbed depreciation was brought forward to the assessment year 1994-1995 and that resulted in higher amount of refund and pending such revision, in order to resolve the issue, insofar as assessment year 1994-1995 is concerned, the assessee opted to settle the matter by invoking the provisions of the KVSS, 1998 and paid the tax due thereon and, therefore, the said amount should be refunded to the assessee. 3.3. The Central Government introduced the KVSS, 1998 by the Finance (No. 2) Act, 1998. The scheme was introduced by the Central Government with a view to collect revenues through direct and indirect taxes by avoiding litigation. If an assessee opts to resolve the tax dispute which is pending, he can make a declaration under Section 88 of the KVSS, 1998. After such declaration is made, the Designated Authority shall determine the tax payable and intimate the same to the assessee. The assessee, if he accepts the order, is liable to pay the tax voluntarily. If, however, the assessee makes payment in terms of the order of the Designated Authority under Section 90 of the KVSS, 1998, the amount shall not be refundable under any circumstances as stated in Section 93 of KVSS, 1998, which reads as under: “Section 93. No refund of amount paid under the Scheme. If, however, the assessee makes payment in terms of the order of the Designated Authority under Section 90 of the KVSS, 1998, the amount shall not be refundable under any circumstances as stated in Section 93 of KVSS, 1998, which reads as under: “Section 93. No refund of amount paid under the Scheme. Any amount paid in pursuance of a declaration made under Section 88 shall not be refundable under any circumstances.” 3.4. Once an assessee voluntarily invokes the KVSS, 1998 and had paid the tax liability in terms of the provisions of the KVSS, 1998, he should abide by the provisions of the KVSS, 1998. He is not entitled to resile from such determination and seek refund. The same runs counter to Section 93 of the KVSS, 1998, which emphatically states that amount paid shall not be refundable “under any circumstances”. The assessee in this case claims refund of the very same amount, which claim is barred in terms of the above provision. 3.5. In the case on hand, the assessee opted to avail the benefit conferred under KVSS, 1998 and made a declaration under Section 88 of KVSS, 1998. The competent authority accepted the declaration and passed an order. The assessee proceeded to opt for the KVSS, 1998 and paid the tax as determined to conclude the lis between the assessee and the department. Having accepted to settle the issue under the KVSS, 1998, it will not lie in the mouth of the assessee to turn around and claim refund referring to earlier assessment years. Therefore, in terms of Section 93 of the KVSS, 1998, the assessee cannot seek refund of amount paid under the KVSS, 1998. 3.6. In such view of the matter, we answer the substantial questions of law (2) and (3) against the assessee and in favour of the Revenue. 4.1. Therefore, in terms of Section 93 of the KVSS, 1998, the assessee cannot seek refund of amount paid under the KVSS, 1998. 3.6. In such view of the matter, we answer the substantial questions of law (2) and (3) against the assessee and in favour of the Revenue. 4.1. Insofar as the first substantial question of law is concerned, as to whether the Commissioner of Income Tax was justified in invoking power under Section 263 of the Act, in view of the reasoning given by us while dealing with questions of law (2) and (3) that in terms of Section 93 of the KVSS, 1998, the assessee cannot seek refund of amount voluntarily paid under the KVSS, 1998, the order passed under Section 154 of the Act by the assessing officer, in our considered opinion, is erroneous and prejudicial to the interest of the Revenue. The twin conditions stipulated under Section 263 of the Act for invocation of said provision by the Commissioner are fulfilled in the case on hand, as the order of the Assessing Officer is erroneous and prejudicial to the interests of the Revenue, as it runs counter to Section 93 of the KVSS, 1998. 4.2. In such view of the matter, the first substantial question of law is answered against the assessee and in favour of the Revenue. For the foregoing reasons, this appeal is dismissed. No costs.