F. No. 370142/22/2024-TPL
Government of India
Ministry of Finance
Department of Revenue
Circular No. 12 of 2024
Central Board of Direct Taxes
Dated 15 October 2024
Sub.: Guidance Note 1/2024 on provisions of the Direct Tax Vivad se Vishwas Scheme, 2024 - reg.
The Direct Tax Vivad Se Vishwas Scheme, 2024 (hereinafter referred as DTVSV Scheme, 2024) has been enacted vide Chapter IV of Finance (No. 2) Act, 2024 to provide for dispute resolution in respect of pending income tax litigation. The objective of the Scheme is to, inter alia, reduce pending income tax litigation, generate timely revenue for the Government and benefit taxpayers by providing them peace of mind, certainty and savings on account of time and resources that would otherwise be spent on the long-drawn and vexatious litigation process.
-
The commencement date of the said Scheme has already been notified as 1.10.2024. Further, Rules and Forms for enabling the Scheme have also been notified on 20.09.2024. After enactment of the DTVSV Scheme, 2024, several queries were received from the stake-holders seeking guidance in respect of various provisions contained therein.
-
Accordingly, under Section 97 of the DTVSV Scheme, 2024 which empowers the Board to issue directions or instructions in public interest, following Guidance Note in the form of answers to the frequently asked questions (FAQs) is hereby issued. This will be helpful for the tax-payers for creating better awareness and understanding with respect to the provisions of the Scheme.
| Issue No. | Comments |
|---|
| Eligible cases | |
| 1. Which appeals are covered under Direct Tax Vivad Se 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 of the Income-tax Act, 1961 ('the Act') 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) of the Act and the AO has not completed the assessment under section 144C(13) on or before 22.7.2024; or
- (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. |
| Non-eligible cases | |
| 2. Which cases are not covered under DTVSV Scheme 2024? | As per section 96 of the Scheme, the Scheme shall not, inter-alia, apply in respect of tax arrear,-
- (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 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 certain other cases where provisions of 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 section 96 of the Scheme. |
| Rates | |
| 3. Kindly provide the amount payable on the tax arrears as per the DTVSV Scheme, 2024? | Table-1
| S. No. | Nature of tax arrears | Amount payable where declaration made on or before 31.12.2024 | Amount payable where declaration made on or after 1.1.2025 & before last date |
|---|
| 1 | Tax arrears include disputed tax, interest, penalty (New Appellant) | 100% of disputed tax | 110% of disputed tax |
| 2 | Tax arrears include disputed tax, interest, penalty (Old appellant) | 110% of disputed tax | 120% of disputed tax |
| 3 | Tax arrears related to disputed interest/ penalty/ fee (New Appellant) | 25% of disputed interest/ penalty/ fee | 30% of disputed interest/ penalty/ fee |
| 4 | Tax arrears related to disputed interest/ penalty/ fee (Old appellant) | 30% of disputed interest/ penalty/ fee | 35% of disputed interest/ penalty/ fee |
- 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. |
| **Types of Forms and Timelines** | |
| 4. 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 appellant and the income-tax authority, both have filed an appeal in respect of the same order, 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 appeal, objection, application, writ petition, special leave petition or claim. |
| 5. 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 tax payer 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, 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 tax-payer 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.
- (iv) Upon receipt of Form-3, Designated Authority shall pass an order in Form-4 stating that the tax-payer has paid the full and final amount. |
| Search assessments | |
| 6. Kindly clarify which assessments shall be considered to have been made on the basis of 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.
