RECENT UPDATES

Direct Tax Dispute Resolution Scheme 2016-Extended to 31-01-2017

CBDT has extended the last date for filing declaration under Direct Tax Dispute Resolution Scheme, 2016 to 31-01-2017. The Scheme provides an opportunity for taxpayers who are under litigation before the Commissioner of Income Tax (Appeals) and other judicial fora to come forward and settle their disputes in accordance with the provisions of the Scheme.

ENFORCEMENT OF SCHEME

Declaration can be filed under the scheme on or after 01-06-2016 before the designated authority, who has been defined to be an officer not below the rank of Commissioner of Income Tax. The last date for filing the declaration has now been extended to 31-01-2017.

APPLICABILITY OF THE SCHEME

The Scheme is applicable to all who has any arrears in respect of Tax, Interest or Penalty determined under the Income-tax Act, 1961 or the Wealth-tax Act, 1957, in respect of which, any appeal is pending before the Commissioner of Income-tax (Appeals) or the Commissioner of Wealth-tax (Appeals) as on the 29^th February 2016.

CRUX OF THE SCHEME

Under the Scheme, if the amount of disputed tax is:

• Up to Rs. 10 lakh, complete waiver from levy of penalty and initiation of prosecution provided on payment of assessed tax along with the interest.
• More than Rs. 10 lakh, the declarant is required to pay only 25% of the minimum penalty leviable along with the due tax and interest

FORM FOR DECLARATION

A declaration is to be filed before the Designated Authority in Form I and Form 2 (where applicable). 

The Designated Authority shall within a period of 60 days from the date of receipt of the declaration determine the amount payable by the declarant in accordance with the provisions of this Scheme.certificate in Form 3 to the declarant setting forth therein the particulars of tax arrear or the specified tax as the case may be, and the sum payable after such determination. 

A Certificate in Form 3 shall be granted to the declarant setting forth therein the particulars of tax arrear or the specified tax as the case may be, and the sum payable after such determination.

The declarant shall pay the sum determined by the designated Authority as per the certificate within 30 days of the date of the receipt of the certificate and shall intimate the fact of making the payment along with proof thereof to the Designated Authority. 

On receipt of such intimation the Designated Authority shall pass an order stating that the declarant has paid the sum as per the Scheme. 

Order passed by the Designated Authority shall be conclusive as regards the settlement of dispute relating to disputed income covered by the order and such dispute shall not be reopened in any proceeding under the Income-tax Act or Wealth-tax Act or under any law for the time being in force.

WITHDRAWAL OF LITIGATION

In accordance with Section 203(2) where a declaration has been filed in respect of tax arrears, appeal pending before CIT(A) or CWT(A), as the case may be, relating to disputed income or disputed wealth shall be deemed to have been withdrawn.

IMMUNITY

Immunity from initiation of proceeding in respect of offence and imposition of penalty in certain cases has been provided.

For more details regarding the Dispute Resolution Scheme, follow the link: http://www.incometaxindia.gov.in/Pages/dispute-resolution-scheme.aspx