Cleaning off disputes for a bumper
The scheme after extension by four times mopped up a sum of ₹
98,328 crores from 1,28,733 declarants. While the collection
constituted a substantial portion of the disputed sum, the number
of declarants is not proportionate to the amount resolved.
Vivad se Vishwas was an amnesty Vscheme announced in the budget 2020 for an amicable resolution of a large number of pending tax disputes between taxpayers and the Income Tax department. The deadline for the scheme was extended four times.
The scheme offered a complete waiver on interest and penalty to the taxpayers with a full and final settlement of the dispute. After four rounds of extension, as of 1st March 2021, the scheme led to the resolution of a sum of ₹ 98,328 crores out of 1,28,733 declarations filed by taxpayers. The declarants relate to 1,43,126 pending disputes including cross-appeals. Of the total declarants, 1,393 were Central public sector enterprises and 833 were State-level institutions. Of the total resolution amount, a sum of ₹ 53,346 crores has been paid off. The number of declarants constitutes roughly a quarter of the total number of pending tax disputes of 5,10,491.
The government has been trying to burden. The DRC will have the powers to reduce or waive any penalty imposable or grant immunity from prosecution for any offence under the Income Tax Act, 1961 (“the Act”). The Bill has also empowered the Central government to make a scheme through DRC notification in the Official Gazette for dispute resolution. For avoiding dispute of assessment of tax liability and providing tax certainty, the government constituted Authority for Advance Rulings (AAR) through the Finance Act, 1993 by inserting Chapter XIX-B in the Act. For enhancing the effectiveness of advance rulings, the Finance Bill, 2021 proposed replacement of the AAR by one or more BAR for giving advance rulings under the Act. Every such Board will consist of two members, each being an officer not below the rank of Chief Commissioner. The Finance Bill, 2021 proposed discontinuation of the
Income-tax Settlement Commission (ITSC) with effect from 1st February 21. An Interim Board will dispose of all the pending cases. bring on greater efficiency, transparency and accountability to the process of disposal of appeals by the
Commissioner (Appeals). As a part of this strategy, it declared the Faceless Appeals Scheme, 2020 in September last year. The Finance Bill, 2021 also proposed schemes for disposal of appeal by the ITAT. Under this scheme, appeals before the Commissioner (Appeals) will be disposed of by eliminating the interface between the Commissioner (Appeals) and the appellant in the course of appellate proceedings to the extent of technological feasibility.
The scheme does not cover appeals relating to serious frauds, major tax evasion, sensitive and search matters, International Tax and Black Money Act. The Finance Bill, 2021 has further proposed several measures for a better dispute resolution mechanism.
The Finance Bill, 2021 has proposed to create one or more DRC specifically targeted towards small taxpayers in disputes for resolving their disputes with minimum cost and compliance burden. The DRC will have the powers to reduce or waive any penalty imposable or grant immunity from prosecution for any offence under the Income Tax Act, 1961 (“the Act”).
The Bill has also empowered the Central government to make a scheme through DRC notification in the Official Gazette for dispute resolution.
For avoiding dispute of assessment of tax liability and providing tax certainty, the government constituted Authority for Advance Rulings (AAR) through the Finance Act, 1993 by inserting Chapter XIX-B in the Act. For enhancing the effectiveness of advance rulings, the Finance Bill, 2021 proposed replacement of the AAR by one or more BAR for giving advance rulings under the Act. Every such Board will consist of two members, each being an officer not below the rank of Chief Commissioner. The Finance Bill, 2021 proposed discontinuation of the Income-tax Settlement Commission (ITSC) with effect from 1st February 21. An Interim Board will dispose of all the pending cases.
