CBDT releases FAQs on Direct Tax Vivad Se Vishwas Scheme 2024

The Ministry of Finance has issued clarifications and Frequently Asked Questions (FAQ) regarding the Direct Tax Vivad Se Vishwas Scheme 2024. This note is intended to clarify and help taxpayers better understand the Scheme’s provisions.

This was announced in the Budget 2024. The scheme was enacted through the Finance (No. 2) Act of 2024. On September 20, 2024, the relevant Rules and Forms for executing the Scheme were also notified. The scheme aims to give taxpayers dispute resolution solutions for pending income tax litigations by waiving all pending penalty and interest amounts. However, the waiver of penalty and interest is conditional. To receive relief, you must complete an appropriate form and deposit the disputed tax demand amount by the deadline.

After the enactment of the DTVSV Scheme, 2024, several queries were received from the stakeholders seeking guidance in respect of va rio LIS provisions contained therein.

Accordingly, under Section 97 of the DTVSV Scheme, 2024 which empowers the Board to issue directions or instructions in the public interest, following Guidance Note in the form of answers to the frequently asked questions (FAQs) is hereby issued.

Frequently Asked Questions (FAQs) are as follows:

Which appeals are covered under the Direct Tax Vivad Sc Vishwas Scheme, 2024?

Please refer to section 89 of the Direct Tax Vivad Se Vishwas Scheme, 2024 (‘the DTVSV Scheme, 2024’ or ‘the Scheme’) [contained in Chapter IV of the Finance (No.2) Act, 2024]. Section 89 of the Scheme provides for the definition of “appellant” which is –

(i) A person in whose case an appeal or a writ petition (WP) or special leave petition (SLP) has been filed either by him or by the income tax authority or by both before an appellate forum and such appeal or petition is pending as on the specified date i.e. 22.7.2024; or

(ii) A person who has filed his objections before the Dispute Resolution Panel (DRP) under section 144C and the DRP has not issued any direction on or before 22.7.2024; or

(iii) A person in whose case the DRP has issued direction under section 144C(5) and the AO has not completed the assessment under section 144C(13) on or before 22.7.2024.

(iv) A person who has filed an application for revision under section 264 of the Act and such application is pending as on 22.7.2024.

Which cases are not covered under the DTVSV Scheme 2024?

As per section 96 of the Scheme shall not, interalia, apply in respect of tax arrears,-

(i) relating to an assessment year in respect of which an assessment has been made under section 143(3)/144/147/153A/153C of the Act on the basis of search initiated under section 132/132A of the Act;

(iI) relating to an assessment year in respect of which prosecution has been instituted on or before the date of filing of declaration;

(iii) relating to any undisclosed income from a source located outside India or an undisclosed asset located outside India;

(iv) relating to an assessment or reassessment made on the basis of information received under an agreement referred to in section 90 or section 90A of the Act, if it relates to any tax arrear.

There are certainly other cases where provisions of the COFEPOSA Act, 1974; UAPA Act, 1967; NDPS Act 1985; PBPT Act, 1988; PC Act, 1988; PMLA 2002 etc. may apply. Such cases are also not covered in the Scheme. For further details, refer to section 96 of the Scheme.

What are the various forms specified in the Scheme?

Four separate Forms have been notified for the purposes of the said Scheme. These are as under:

Form-1: Form for filing declaration and undertaking by the declarant.

Form-2: Form for Certificate to be issued by Designated Authority.

Form-3: Form for intimation of payment by the declarant.

Form-4: Order for Full and Final Settlement of tax arrears by Designated Authority.

The Scheme also provides that Form-1 shall be filed separately for each dispute, provided that where the appellant and the income-tax authority, both have filed an appeal in respect of the same order, a single Form-1 shall be filed in such a case.

The intimation of payment is to be made in Form-3 and is to be furnished to the Designated Authority alongwith proof of withdrawal of the appeal, objection, application, writ petition, special leave petition or claim.

What are the various timelines specified in the Scheme?

Various timelines specified in the Scheme are as follows:

(i) Declaration and Undertaking shall be filed by the taxpayer in Form-1 on or before 31.12.2024 to keep the amount payable on the lower threshold. In case of filing the declaration and undertaking beyond 31.12.2024, the amount payable will increase as specified in rates Table-1 above.

(ii) The Designated Authority shall issue Form-2 within a period of fifteen days from the date of receipt of the declaration to determine the amount payable by the taxpayer.

(iii) The taxpayer shall pay the amount as determined in Form-2 within a period of fifteen days from the date of receipt of the certificate and shall intimate the details of such payment in Form-3.

Kindly provide the amount payable on the tax arrears as per the DTVSV Scheme 2024

• Where an appeal/writ petition/SLP is filed by the income tax authority on any disputed issue, the amount payable shall be 50% of the amount payable specified in the Table above.
• Where an appeal is filed by the appellant before the Commissioner (Appeals)/Joint Commissioner (Appeals) or objections are filed before the Dispute Resolution Panel on any issue on which he has already got a decision in his favour from the ITAT (where the decision on such issue is not reversed by the High Court or the Supreme Court or the High Court (where the decision on such issue is not reversed by the Supreme Court), the amount payable shall be 50% of the amount payable specified in the Table above.
• Where an appeal is filed by the appellant on any issue before the ITAT on which he has already got a decision in his favour from the High Court (where the decision on such issue is not reversed by the Supreme Court), the amount payable shall be 50% of the amount payable specified in the Table above.

Which assessments shall be considered to have been made on the basis of the search initiated under section 132/132A of the Act?

Assessments framed under section 153A or 153C are clearly made on the basis of search initiated u/s 132/132A. Therefore, such cases shall not be eligible for the DTVSV Scheme, 2024.

For other cases where assessments have been made U/S 143(3)/144/147, the following three sets of cases shall be considered as cases where assessments have been made on the basis of search initiated u/s 132/132A.

These cases are:-

(i) Where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April 2021, in the case of the assessee and assessments have been made consequently; or

(ii) Where the Assessing Officer has drawn satisfaction, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April 2021, belongs to the assessee and assessments have been made consequently; or

(iii) Where the Assessing Officer has drawn satisfaction, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee and assessments have been made consequently.

To Read More Download PDF Given Below: