Vivad Se Vishwas Scheme 2024: Income Tax department releases new FAQs

The scheme allows taxpayers to settle disputes with the government; check out who can avail of it

The Income Tax department has issued an updated set of frequently asked questions (FAQ) about the Direct Tax Vivad Se Vishwas (DTVSV) Scheme. The scheme was announced in the Union Budget for 2024-25 to resolve income tax disputes.

 

Tax appeals are covered under DTVSV

 

Under Section 89 of the Direct Tax Vivad Se Vishwas Scheme, 2024 (DTVSV Scheme, 2024), outlined in Chapter IV of the Finance (No. 2) Act, 2024, the term ‘appellant’ includes the following:

 

A person whose appeal, writ petition (WP), or special leave petition (SLP) has been filed – either by the person themselves, the income-tax authority, or both – before an appellate forum, and such appeal or petition remains pending as of the specified date, i.e., July 22, 2024.

 

A person who has submitted objections to the Dispute Resolution Panel (DRP) under Section 144C of the Income-tax Act, 1961, where the DRP has not issued any directions on or before July 22, 2024.

 

A person in whose case the DRP has issued directions under Section 144C(5) of the Act, but the Assessing Officer (AO) has not completed the assessment under Section 144C(13) on or before July 22, 2024.

 

A person who has filed an application for revision under Section 264 of the Act, and such application remains pending as of July 22, 2024.

 

Suppose a taxpayer is eligible for DTVSV Scheme, 2024 as her appeal is pending as on 22 July, 2024. But subsequently, before the taxpayer could file a declaration under the DTVSV Scheme, 2024, her appeal was disposed of on merits or dismissed as withdrawn for the purposes of the Scheme. Can such a taxpayer still file declaration under the scheme?

 

Yes, such cases qualify for settlement under the scheme, as the appeal was pending as on July 22, 2024. The disputed tax will be calculated as though the appeal pending on 22 July, 2024 has not yet been resolved.

 

Suppose a taxpayer has filed a declaration in Form-I. After the declaration, the appeal has been disposed of. Is such a case eligible for settlement?

 

Yes, such a case is eligible for settlement.

 

The time limit for filing of appeal has expired before July 22, 2024, but an appeal along with application for condonation of delay (condonation of delay is a special relief provided by the Income Tax Department to the taxpayers for late filing or verification of ITR)  has been filed after 22nd July, 2024. Whether the taxpayer can opt for the Scheme in such a case?

 

For a taxpayer to be eligible for the scheme, the appeal must be pending as of July 22, 2024. If an appeal, accompanied by an application for condonation, is filed after this date, it will not be considered as pending as of July 22, 2024. Consequently, such cases will not qualify for the Scheme.

 

Suppose an appeal has been filed before July 22, 2024 with an application for condonation of delay which is also filed before 22nd July, 2024. This appeal has been admitted by allowing condonation of delay prior to the date of filing of declaration under the Scheme. Whether such a taxpayer can opt for the Scheme?

 

If both the appeal and the condonation application were filed on or before July 22, 2024, and the condonation application is admitted, such cases will be treated as appeals pending as of July 22, 2024. Accordingly, the taxpayer is eligible to opt for settlement under the Scheme in these cases.

 

Can taxpayers settle appeals under the DTVSV scheme using the refund they are expecting from the department?

 

As per section 92(2) of the scheme, the declarant shall pay the amount determined under section 92(1) of the scheme within a period of fifteen days of the date of receipt of the certificate and intimate the details of such payment to the designated authority in the prescribed form and thereupon the designated authority shall pass an order stating that the declarant has paid the amount.  There is no provision in the Scheme allowing payment of the amount determined under 92(1) of the Scheme through adjustment of any refund expected from the Department.

 

Are cases where review petitions are pending before courts eligible for settlement under DTVSV Scheme, 2024?

 

No. Pendency of review petition does not tantamount to pending before High Courts or pendency of an appeal. so, it would not tantamount to pendency of an appeal.