Direct Tax Disputes Resolution Bill introduced in the Parliament

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Scope of the Scheme

Any appeal (whether filed by taxpayers or by income-tax department) pending before Supreme Court or High Court or ITAT or CIT(A), as on 31 January 2020 is eligible for resolution under this Scheme.

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What needs to be paid to avail the Scheme

To avail the benefit under this Scheme, taxpayer is required to make a declaration in a form to be prescribed (Declaration) before the designated authority i.e. designated Commissioner of Income Tax (Designated CIT) and is required to pay the following amount:

Nature of tax demand

Amount payable under the Scheme on or before 31 March 2020

Amount payable under the Scheme after 31 March 2020 but on or before the last date of the Scheme

Tax demand raised pursuant to any assessment order

Amount of disputed tax. Taxpayer will get complete waiver from interest or penalty leviable or levied

Lower of the following:

110% of the disputed tax

OR

Disputed tax, plus applicable interest, penalty

Disputed interest / disputed penalty / disputed fee

25% of the disputed interest / disputed penalty / disputed fee

30% of the disputed interest / disputed penalty / disputed fee

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What immunity is granted upon opting the Scheme

Taxpayer will get immunity from penalty, interest and prosecution in respect of the tax arrears for which the Declaration is made.

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Who / what is not eligible for the Scheme:

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Following tax disputes would not be eligible for the Scheme:

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Appeals against assessment orders passed pursuant to ‘search’ action

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Appeals against assessment orders involving undisclosed foreign income and foreign assets

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Appeals against assessments or reassessment orders made pursuant to ‘Exchange of information’ received from foreign jurisdictions

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Appeals pending before CIT(A) where ‘notice of enhancement’ has been issued on or before 31 January 2020

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Appeals where ‘prosecution’ has been instituted on or before the date of filing of Declaration.

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Taxpayers in respect of whom prosecution for any offence punishable under the Indian Penal Code; Prevention of Money Laundering Act, 2002; the Prohibition of Benami Property Transactions Act, 1988 etc has been instituted on or before the filing of Declaration are also not eligible for the Scheme.

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Designated CIT will pass order within 15 days from the date of receipt of a Declaration (Order) determining the amount payable by the taxpayer.

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Taxpayer needs to pay the sum determined in the Order within 15 days from its receipt. Thereafter, Designated CIT will pass an order acknowledging payment of tax / interest / penalty, as the case may be.

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Any amount paid under this Scheme will not be refundable.

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Any appeal pending before ITAT or CIT(A) will be deemed to have been withdrawn from the date on which Order is passed. Notably, in respect of appeals / writ petitions which were filed by the taxpayer, the taxpayer will have to withdraw its appeal or writ petition and furnish proof of such withdrawal along with its Declaration that needs to be filed under this Scheme.

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A taxpayer who has initiated any proceedings for arbitration/ conciliation/ mediation (Claim) is also entitled to avail the benefit under this Scheme if it withdraws the Claim and furnishes proof of such withdrawal along with its Declaration.