CBDT gives one more chance to file income-tax settlement applications

The government Tuesday gave one more opportunity to those taxpayers who were not able to file settlement application with the Income Tax Settlement Commission before it ceased to exist in February this year. These taxpayers would be allowed to file their settlement applications before an Interim Board subject to certain conditions, writes ETV Bharat Deputy News Editor Krishnanand Tripathi.

New Delhi:The government Tuesday gave one more opportunity to those taxpayers who were not able to file settlement application with the Income Tax Settlement Commission before it ceased to exist in February this year. These taxpayers would be allowed to file their settlement applications before an Interim Board subject to certain conditions.

The Central Board of Direct Taxes (CBDT) has proposed legislative amendments to enable taxpayers to file settlement applications as some of them approached courts on the ground that they were in the process of filing their settlement application when the Finance Bill 2021 was laid in the Lok Sabha on February 1 this year.

The Finance Act 2021 amended the provisions of Income Tax Act of 1961 so that the Income Tax Settlement Commission ceased to operate from February 1. The Income Tax Settlement Commission had wide powers to decide the disputes related to income tax and wealth tax between the Income Tax Department and taxpayers by giving them an opportunity to make full disclosure at any stage of proceeding.

The CBDT said those taxpayers who were eligible to file settlement applications at the end of March this year will have time till September end to file the applications.

These applications will be filed before the Interim Board which was created to dispose of pending settlement applications as on the last date of the month of March this year.

“The taxpayers, in the pending cases, have the option to withdraw their applications within the specified time and intimate the Assessing Officer about such withdrawal,” said the Board.

The government received representations from those taxpayers who were in the advanced stage of filing their settlement applications before the ITSC when the Finance Bill was introduced in the Lok Sabha in February this year.

“Some taxpayers have approached High Courts requesting that their applications for settlement may be accepted. In some cases, High Courts have given interim relief and directed acceptance of applications of settlement even after February 1, 2021. This has resulted in uncertainty and protracted litigation,” said the Board.

The CBDT said in order to provide relief, these taxpayers have been given one more opportunity to file the application with the Interim board by the month end if they fulfill two conditions – the taxpayer was eligible to file application in March end, and where the relevant assessment proceeding is still pending.

CBDT said all these applications will be considered pending applications and will be settled by the Interim Board.

The Board also clarified that those taxpayers who have filed their applications on or after February 1 this year need not file applications once again.