Settlement of Tax Disputes

Indian organizations, and people the same were exposed to a huge number of assessments, both by the State and the Center. To address this, as of late the Center has presented the Goods and Services Tax (GST) to supplant the greater part of the roundabout assessments. It is additionally conceivable that the current annual assessment law might be supplanted by a Direct Tax Code: this has been really taking shape for quite a long time; however at present, personal duty is demanded under the Income Tax Act, 1961.

A typical component of Indian assessment laws, independent of the sort, is the steady alterations and changes made to the law; these progressions identifying with the rate, the subject of duty and the methodology. Notwithstanding, the contest goals framework under the Indian duty laws has generally continued as before, with no significant changes in the ongoing past. Contingent upon the kind of assessment, there are minor contrasts in the technique to be followed for question goals. Nevertheless, the general structure of the question redressal framework is comparative (i.e., the three-layered re-appraising framework, advance decision instrument and the settlement commissions). There are discrete arrangements relating to stamp obligations (for example, under the Indian Stamp Act, 1899 and comparative States’ enactments).

Regarding goals of questions, the sheer numbers looked by the Indian legal executive make ideal removals a major test. To the extent that redrafting councils are concerned, the pace of removals is genuinely fast: a debate may well get chose at last by investigative court inside a year or so of inception before the council. Be that as it may, to the extent that the high courts are concerned, the timeframes fluctuate extensively. Writ petitions are commonly chosen more rapidly than bids: every one of these cures is examined thus in this manner.

Commencing Disputes

India has executed the self-evaluation methodology, wherein the citizens survey the duties for themselves and document returns. Citizens having turnovers or receipt over specific cutoff points are likewise required to get their books evaluated and document charge review reports.

Under the annual expense law, returns of pay are required to be documented in regard of salary chargeable to tax.2 The bookkeeping year runs from 1 April to 31 March: pay of a bookkeeping year (‘earlier year’) is brought to burden as the pay of the following evaluation year. In this manner, the pay of the monetary year 2019–2020 will be chargeable to burden in appraisal year 2019–2020; and the subject of chargeability when all is said in done turns on the law as on the primary day of the important evaluation year (i.e., 1 April of the significant appraisal year). Returns of pay are to be recorded inside a predetermined period from the finish of the pertinent earlier year. The personal duty law permits a further period for the citizen to modify the arrival to address any true blue errors.3 The assessee can’t raise extra cases for findings or advantages before the evaluating official except if this is done through a changed return: this doesn’t, notwithstanding express provisions, forestall new cases being raised before the investigative authorities.

The evaluating official (AO) is engaged to take up the profits documented and examine the equivalent. Practically speaking, just a small amount of the profits is taken up for investigation. The AO is qualified for pass a request for evaluation either tolerating the returned salary or making varieties to the brought pay back. Time limits for finishing appraisals are indicated: the general guideline for evaluation years initiating after 1 April 2019 is that sets of evaluation cannot be passed after the expiry of a year from the finish of the important evaluation year. Thus, an appraisal for appraisal year 2019–2020 (which identifies with salary earned in the earlier year 2018–2019) can’t be made following a year from the finish of the evaluation year 2019–2020 (i.e., the appraisal must be finished before 31 March 2021). In September 2019, an arrangement of e-evaluation was brought into power by the government, under which there is no close to home connection between the assessee and the expense official, with all correspondence steered through an online entryway assigned for this reason.

Much after the appraisal has been finished in the above terms, the duty specialists can revive the evaluation on the off chance that they be motivated to accept that some salary has gotten away assessment. This force can when all is said in done be practiced for a time of four years from the finish of the important appraisal year being referred to; however the forces to revive can’t be practiced to survey guarantees that have just been considered during the investigation appraisal. To practice forces of reviving past four years, the AO should likewise have the option to highlight some disappointment on part of the assessee (for example, non-recording of an arrival; or an inability to uncover material realities having a direction on the appraisal). On the off chance that salary has gotten away from appraisal corresponding to a benefit situated outside India, the a much longer confinement time frame (16 years) is given. The Indian courts have given a schematic understanding to the expression ‘motivation to accept’: the motivation to accept that pay has gotten away from evaluation must be founded on some unmistakable materials, and a simple difference in feeling about the taxability of a thing won’t comprise a substantial ‘motivation to accept’ that pay has gotten away assessment.

Notwithstanding the forces of the AO to revive appraisals, evaluations can likewise be ‘reconsidered’ by the magistrate of personal expense (an official of higher position than the surveying official) if the chief is fulfilled that an evaluation request is mistaken and biased to the interests of the income. The chief can’t practice this force where the AO has taken a potential view on an easily proven wrong question; be that as it may, the revisionary purview can be practiced if the surveying official has taken an unmistakably mistaken view, or has completely neglected to look at an issue.

The Indian GST law likewise accommodates a self-evaluation strategy, where the assessee is required to survey the GST payable on the exchanges it embraces and record an arrival in regard of the equivalent, on a month to month or quarterly premise, all things considered. The assessee needs to give subtleties of the info charge credit profited in the said returns. On the off chance that the zonal expense official is of the sentiment that there is a slip by on the assessee’s part in regard of the installment of GST, customs obligation or the profiting of info charge credit, the official will undoubtedly give a show cause notice to the assessee. Under the backhanded assessment law, it is the show cause notice that is the establishment of the debate. In the wake of giving a chance of being heard, the arbitrating authority may then pass a request requesting installment of duty not paid or the info charge credit profited in abundance.

The Courts and Tribunals

Focal assessment laws accommodate a three-layered re-appraising system. An individual wronged by the duty official’s evaluation request may move toward the primary investigative position, who is commonly a senior official of the office assigned to be so. The primary intrigue is basically an authoritative intrigue to the chief (offers), with the redrafting authority having powers associative to the forces of the assessment officials. An intrigue from the redrafting authority’s organization goes to the re-appraising tribunal. The intrigue may go before a solitary part or a two-part seat, contingent upon the multifaceted nature of issue and the duty impact included. By and large, if the litigant pays 20 percent of the contested interest, the Revenue specialists themselves may not demand further recuperations pending the primary intrigue before the commissioner. However, the pendency of an intrigue does not in itself work to remain the recuperation of the interest advanced against, yet managerial specialists just as investigative specialists have forces to allow a restrictive or genuine remain. The components pertinent incorporate the at first sight quality of the appealing party’s case and the equalization of comfort.

In issues including move valuing changes, a marginally extraordinary method is accessible. In such issues, the AO is required to make a reference to the exchange estimating official for deciding the correct arm’s-length cost in regard of exchanges secured under exchange evaluating guidelines, and is then required to pass a draft appraisal request. Complaints against the draft evaluation request can be documented by the citizen to the question goals board (a board comprising of three official level officials). The AO is required to pass the last evaluation request offering impact to the bearings of the contest goals board. In such cases, an intrigue can be documented straightforwardly to the re-appraising court bypassing the primary intrigue before the magistrate (offers).

Advances from the investigative council, by and large, go to the jurisdictional high court constrained distinctly to considerable inquiries of law. An assessee may move toward the Supreme Court of India on advance from the choices of the high courts, subject to the unique leave of the Supreme Court (which is conceded at the carefulness of the court in issues including generous inquiries of law of overall population significance) or (significantly more astoundingly) subject to an endorsement of wellness from the high court.

The option to advance under the Indian expense laws is, obviously, subject to certain confinement periods, although the specialists do have a capacity to approve sensible postponements. Indeed, even the assessment authority (‘Revenue’) has the privilege to lean toward offers against requests of the re-appraising specialists. Be that as it may, the said right is liable to limits set up by the case strategy gave by the legislature, under which the Revenue doesn’t go into offer if the expense impact included is lesser than the cutoff points specified.

Certain circuitous expense questions can be legitimately spoke to the Supreme Court (from requests of the redrafting council). The option to offer under circuitous duty laws is hampered with a weight to store certain level of the expenses under question. GST law being an ongoing prologue to the assessment laws, the GST redrafting court is yet to initiate working. Even though, the administration has established seats, individuals are yet to be designated to the said seats. An obstruction for the GST investigative council, is an ongoing choice by the Madras High Court striking down the constitution of the GST redrafting council as being ultra vires the Constitution of India. The Supreme Court has likewise as of late struck down ongoing revisions in the method of arrangement and states of administration of the individuals from different councils. These choices seem, by all accounts, to be introduced on the need to have a court that is free and not just an augmentation of the income specialists.

Aside from the legal re-appraising cures, the citizens may likewise move toward the jurisdictional high court or the Supreme Court by summoning their writ ward as visualized by Articles 226/227 and 32 of the Constitution. The writ ward might be conjured in situations where the direct of the expense specialists or redrafting specialists is ultra vires the resolution or method or where it is violative of the standards of characteristic equity. By and by, the courts do not engage writs where an adequate exchange cure as an intrigue is accessible. Nonetheless, there are special cases: in this manner, the presence of an elective cure may not bar the activity of writ ward in situations where the tested measure is entirely without locale, or has emerged from an appalling penetrate of the standards of characteristic equity.

Writ cures are intense especially in testing reviving procedures: when a notification for reviving is gotten, the citizen is required to document an arrival in light of the notification, and is qualified for look for the explanations behind the reviving. On receipt of the reasons, the citizen can record issues with the proposed reviving. Those complaints are required to be chosen by the evaluating official through a talking order. That talking request is itself not appealable: an intrigue would lie just against a last re-appraisal request itself. Consequently, a writ appeal can be documented testing the notification for reviving and the request on protests, even before a definitive re-appraisal request being passed. Obviously, the writ court would consider just the jurisdictional complaints and whether the surveying official was acting inside ward, having fulfilled the jurisdictional precondition of ‘motivation to accept’ that salary has gotten away from appraisal. In the event that by all appearances the writ court arrives at the resolution that there is in reality a legitimate motivation to accept, at that point the citizen would need to adhere to the customary redrafting procedures after the last reassessment request. In any case, in circumstances where a proposed reviving is started entirely without locale – maybe in light of the fact that the issue that has just been explicitly considered in the first procedures and the reviving is equivalent an audit, or where the jurisdictional state of there being a disappointment on some portion of the citizen isn’t fulfilled – at that point writ cures are a powerful system to acquire alleviation, without anticipating the last re-appraisal orders.

Penalties and Remedies

As a piece of the burdening systems, Indian expense specialists have additionally been engaged to force punishments on the citizens for infringement running from non-documenting of profits to non-revelation of pay or non-installment of assessment. Punishments for procedural infringement are by and large measured in direct sums though punishments towards non-installment of duty or non-exposure of wages or exchanges are evaluated as rates of the expense or sums included (for the most part, 100 to 300 percent). From appraisal year 2017–2018, punishments can be forced for ‘under-announcing’ or ‘distorting’ income, while for prior years, the punishment was expressed to be for the outfitting of off base points of interest or for the camouflage of income. There has been a lot of prosecution on the topic of whether punishments for non-installment of duties can be forced just when such non-installment is willful. This is basically by virtue of legal assumptions as to mens rea. Notwithstanding, punishment can’t be demanded simply on the grounds that a case is made that isn’t worthy to the Revenue: if the case is evidently genuine, the way that it at last ends up being incorrectly would not be adequate to impose penalty.

Under the personal duty law, punishment procedures are not a piece of the evaluation procedures. Area 274 of the Income Tax Act, 1961 accommodates the methodology to be trailed by the duty specialists to force punishments on the assessee. Specifically, the technique gives due respect to the standards of characteristic equity (i.e., due notification and hearing to be given to the assessee before impost). Further, Section 273AA likewise gives a chance to move toward senior duty officials for decrease in the punishments. On the off chance that a request has been passed against an assessee forcing punishments, the assessee may move toward the redrafting experts for putting aside the said request. Then again, under both GST and customs laws, charge officials giving the show because notice have the forces to force punishments on the assessee in similar procedures. In such cases, the duty official must remember for the show cause notice an averment regarding the punishments tried to be forced with explicit reference to the segments under which the punishments are looked to be forced.

Aside from the abovementioned, Indian expense laws likewise accommodate criminal arraignment of citizens in regard of specific offenses, for example, wilful avoidance of assessment, non-installment of roundabout duties previously gathered, and so forth. The discipline for such offenses incorporates detainment just as fines. The expense dodger is then attempted according to the arrangements of the Code of Criminal Procedure. In like manner, citizens may then profit the cures accommodated in the said Code. Certain offenses can be ‘intensified’ by installment of exacerbating charges.

Tax Claims

Recovering Overpaid Charge

In India, most definitely, the citizen is not required to make a different case for recuperation of overpaid charges: exposure of such excessive charge in the arrival itself is blessed to receive be adequate case for the said recuperation. Further, charge specialists are additionally required to pay enthusiasm on postponed disbursal of the discount for which the assessee is qualified. For such a case to be made, the arrival must be recorded inside as far as possible indicated; however, the CBDT holds the ability to expand time limits in instances of certified difficulties.

Challenging Authoritative Choices

Authoritative choices can be tested in writ courts. Article 14 of the Constitution of India ensures the privilege to equity; this has been extensively deciphered to give an assurance against mediation in state activity. Conventional managerial law cures are additionally accessible. The idea of genuine desires or promissory estoppel may not be accessible as against authoritative establishments: nonetheless, the ideas have been applied with regards to managerial measures. The Indian Supreme Court has dismissed the contention that the idea of real desires or promissory estoppel can’t have any significant bearing to authoritative estimates managing tax assessment simply because tax collection is a piece of the sovereign exercises of the state: it has been explicitly held that the ideas can be applied to every managerial activity (counting those in the area of tax collection), and isn’t confined to just the exchanging or business exercises of governments.


The remaining to make claims for discounts is with the citizen themselves: this is basically because the method for discounts in direct expense matters includes making a case in the arrival of salary itself. Under the GST system, a different application must be made by the citizen for the discount of any overabundance charge paid or abundance input charge acknowledge accessible for the assessee. The confinement for documenting the said application is two years under GST law. An exceptional essential for guaranteeing discount of aberrant charges is the idea of uncalled for advancement: this idea is utilized not in the feeling of a case for out of line enhancement against the legislature, yet is somewhat used to deny discounts if the citizen is ‘shamefully improved’ by the discount guarantee. This is maybe like the protection of giving natural to English compensation legal advisors. As needs be, the citizen needs to demonstrate that a definitive weight of the sum asserted was not given to the purchasers however was held by the citizen. The cases are declared and arranges are passed either permitting or dismissing the discount claims.


Expenses as to suit under the steady gaze of the courts and councils of the nation for the most part must be borne by the appellants themselves. Be that as it may, under extraordinary conditions the courts may grant expenses to the appellants. Practically speaking, cost grants by courts are very uncommon as respects charge prosecution. As needs be, the expenses of the prosecution at last fall on the specific party: regardless of whether fruitful, the odds of recuperating the expenses from the other party are negligible.

Alternative Dispute Resolution

Indian assessment settlements contain arrangements identifying with Mutual Agreement Procedures (MAP), and goals under MAP arrangements have likewise been perceived by Indian courts. However, when all is said in done, income experts in India have been disinclined to presentation of ADR instruments, for example, intervention. Truth be told, in different cases emerging under respective speculation bargains (on the grounds that the impact of an expense measure is considered by financial specialists to be against arrangements ensuring reasonable and fair treatment to ventures), assertion has been conjured by speculators. The Revenue specialists have taken a protest that assessment matters are not ‘arbitrable’ under such respective speculation treaties. India has likewise not acknowledged the compulsory assertion arrangements in the Multilateral Convention to Implement Tax Treaty-Related Measures to Prevent Base Erosion and Profit Shifting (MLI). In that foundation, expecting a proper discretion component under duty laws in India by and by does not appear to be practical.

Advance Decision

The development administering component under the Indian duty laws is even more a contest counteraction instrument. It permits the assessee to acquire a decision on a forthcoming exchange with regards to whether any and what quantum of expense would be payable on the said exchange. For an application for advance decision to be engaged, it is fundamental that the proposed exchanges are not viewed as a gadget for charge shirking: in instances of duty evasion, applications for advance decisions may not be viable. The decision given by the Authority for Advance Ruling is authoritative on the assessee just as the expense specialists: there is no option to request, however it is conceivable to scrutinize the rightness in a writ appeal under the steady gaze of the High Court. A definitive end, be that as it may, will tie the citizen and the specialists; and the specific citizen or Revenue cannot scrutinize the Advance Ruling over the span of normal appraisal or redrafting procedures.

The development administering authority under personal assessment law comprises of two individuals: one legal (by and large, an ex-judge) and one specialized (a senior expense official) while the development administering authority under GST comprises of two specialized individuals. With deference, the absence of a legal part in the GST advance decision authority may not rouse the most elevated levels of trust in that instrument.

Settlement Commission

The Indian expense laws additionally accommodate a settlement commission that has forces to stop the contest in lieu of installment by the assessee of a part of the sums in question. The settlement strategy permits the assessee to acknowledge all the requests and pay a part without going into any extended prosecution.

Amnesty Plans

To lessen prosecution, the administration has occasionally, declared reprieve plans under which the citizens have an alternative to take care of the liabilities without going into any suit. As of late, the legislature reported the Income Declaration Scheme, 2016, whereunder assessees were allowed a chance to announce any undisclosed pay and pay 45 percent of the salary towards duties and punishments. Further, with the presentation of GST, the administration has additionally reported the Legacy Dispute Resolution Scheme in 2019 to stop the prosecution under past laws supplanted by GST. A comparable plan has been proposed for direct duty questions in the 2020 Budget; the plan imagines citizens paying the expense part (with intrigue and punishments postponed) to settle pending interests.


Judicial Enemy of Shirking Draws Near

The fight among substance and structure is recognizable to all people keen on tax assessment the whole way across the world: and the Indian legal executive has needed to defy these issues in a few cases. The current methodology in such manner found in Vodafone,34 where the Supreme Court considered the different positions taken by the courts on the point. The court seems to have received a sliding-scale approach; structure is significant; however, the structure may yield if there is no business reason in each structure. The court at last held:

“. . . at the edge, the weight is on the Revenue to affirm and build up misuse, in the feeling of duty shirking in the creation and additionally utilization of such structure(s). In the utilization of a legal enemy of shirking rule, the Revenue may summon the ‘substance over structure’ standard or ‘puncturing the corporate cover’ test simply after it can build up based on the realities and conditions encompassing the exchange that the reproved exchange is a hoax or duty avoidant . . .”

It is the undertaking of the Revenue/Court to determine the legitimate idea of the exchange and keeping in mind that doing so it needs to take a gander at the whole exchange all in all and not to receive a dismembering approach. The Revenue cannot begin with the inquiry concerning whether the upbraided exchange is an assessment suspension/sparing gadget however that it ought to apply the ‘see’ test to find out its actual lawful nature . . .

The corporate business reason for an exchange is proof of the way that the reprimanded exchange is not embraced as a colourable or fake gadget. The more grounded the proof of a gadget, the more grounded the corporate business reason must exist to defeat the proof of a gadget . . .

General Enemy of Evasion Rules (GAAR)

GAAR was formally embedded into the Indian personal duty law by the Finance Act, 2013 with the presentation of Chapter X-An in the Income Tax Act, 1961. The GAAR as presented by the Finance Act, 2013 were initially to produce results from 1 April 2016. Be that as it may, the activity of GAAR was deferred to 1 April 2018 by the Finance Act, 2015.

Under the Indian GAAR, the duty official has been enabled to announce an exchange or a lot of exchanges to be an ‘impermissible shirking understanding’ (i.e., a game plan, the primary reason for which is to get a tax break, which bury alia needs business substance). Specifically, Section 97 of the Income Tax Act, 1961 indicates with regards to what courses of action might be said to need business substance, listing in that few plans, for example, full circle financing, settlement passages, counterbalancing sections, work of duty asylums, and so on. When any exchange has been so proclaimed as an impermissible evasion understanding by the expense official, the person may burden the said exchange on its substance as opposed to the structure (i.e., by dismissing the means in the exchange attempted to stay away from charges). Segment 100 of the Act explicitly gives that arrangements of Chapter X-A might be applied notwithstanding some other reason for assurance of the assessee’s expense obligation. Preceding conjuring of the GAAR arrangements, a favoring board (comprising of a few senior expense officials) needs to give a chance of being heard to the assessee and further permit the assesses to record protests such summon. It is simply subsequent to following due method that the supporting board may pronounce the exchange or exchanges to be an impermissible evasion course of action and allude the issue back to the jurisdictional duty official for deciding the expense payable consequently.

The particulars of the GAAR are expansive and there is by and by not away from direction on the understanding of these terms. It is conceivable (subject, obviously, to the hidden language) that choices of different nations in deciphering GAAR arrangements might be considered by Indian courts while deciphering the Indian GAAR arrangements.

Transfer Valuing and Other Explicit Enemy of Evasion Measures

Segments 92 to 92F of the Income Tax Act, 1961 contain the exchange valuing arrangements as material to intra-bunch cross-outskirt exchanges and certain predefined household exchanges. Under the said arrangements, the exchanges must be led at an arm’s-length cost as characterized under Section 92F of the Act. The law further accommodates an obligatory documenting of the bookkeeper’s report in regard of every universal exchange between related undertakings. A specific level of profits is chosen for review by the exchange valuing official (TPO) who at that point assesses whether the said exchanges were at arm’s-length cost and passes a request on their discoveries. The law likewise accommodates rigid punishments for infringement of the exchange valuing arrangements. An individual abused by the TPO’s organization may seek after the intrigue system under the law (talked about in Section III). On the current law, the exchange estimating arrangements are pulled in without a prerequisite on the Revenue to show any expense shirking on the realities; to be sure, a thought process of duty evasion additionally has been held to be superfluous. Indian law likewise contains other enemy of evasion systems remembering limitations for costs on account of local related-party transactions, measures to battle profit stripping, and so on.

India has been reasonably effectively engaged with the base disintegration and benefit moving (BEPS) venture. The Finance Bill, 2016, considered the presentation of a few measures including a leveling demand, patent box system, nation by-nation announcing and so on. Further, India has presented slim capitalisation rules with impact from Assessment Year 2018–2019: albeit propelled by the BEPS venture, the Indian methodology inclines toward a fixed proportion rule as opposed to a gathering proportion rule.

Double Taxation Treaties

As of December 2019, India has gone into a few twofold duty shirking understandings (DTAAs) that have legitimate impact as far as Section 90 of the Income Tax Act, 1961. Article 253 of the Indian Constitution engages the parliament to make laws for offering impact to global understandings. Appropriately, Chapter IX has been remembered for the Income Tax Act, 1961 to offer impact to any DTAA went into by India. Segment 90(2) of the Income Tax Act unequivocally gives that the arrangements of DTAAs will beat the arrangements of the local law to the degree they are helpful for the assessee. The courts have additionally consistently held that a DTAA will supersede the arrangements of the Income Tax Act where beneficial. Although India is not a signatory to the Vienna Convention on the Law of Treaties, it is allowable to have plan of action to the standards in that bargain (as intelligent of standard global law) in deciphering DTAAs. Clarification 4 to Section 90, which was embedded by the Finance Act, 2017, gives that if a term is utilized in a DTAA yet not characterized under the DTAA, at that point – if a similar term is characterized under the Income Tax Act – the importance relegated under the Act will win. If a term is characterized in the settlement itself, at that point obviously, a correction to the definition under the Act would not modify the insurances conceded under the treaty.

Areas of Focus

Ongoing years have seen a few duty related cases against India under respective venture bargains; these cases incorporate both direct40 just as indirect41 tax collection. Leaving these cases aside, Revenue specialists have been concentrating on BEPS-related measures. The endorsement of the MLI by India denoted a significant change, and a few Indian assessment bargains have been altered along these lines. Move evaluating issues including the exchange valuing treatment of intangibles stays a dubious zone. Issues relating to the duty treatment of programming (and whether installment for programming adds up to ’eminence’) are by and by pending under the watchful eye of the Supreme Court. Significant late changes to the law have been made as of late; and debates including these new arrangements are probably going to be centered around in the following scarcely any years: these zones incorporate the GAAR, dainty capitalisation rules and so on. Another tale issue in charge debates relates to the counter profiteering arrangements under GST law. The citizen is required to pass on the advantage of decrease in charge rates (from cumulated charge paces of the past laws and the uniform duty paces of GST) by a comparing decrease in the costs charged to the consumer. A customer who feels that the advantage of decrease in charge rates has not be passed on by method of decrease in costs of any merchandise purchased or benefits benefited may move toward the counter profiteering authority by method of a grievance. The counter profiteering position at that point takes up the case and researches regarding whether and of what quantum advantage is inferred by the assessee on account of the decrease in rates. A few issues relating to the counter profiteering authority are probably going to come up to the higher courts for goals.

Outlook and Conclusions

Late alterations made to Indian assessment laws have looked to excuse corporate duty rates. Albeit aberrant expense has been improved through the presentation of the GST, troubles in execution are yet to be completely resolved. As far as immediate assessments, changes are normal; and keeping in mind that there has been discussion of a Direct Taxes Code for quite a long while, there has been a further impulse by the current government. A board of trustees has as of late presented a report to the administration on changes to the immediate duty laws. As far as duty debates, the administration seems to have received an approach of focusing on high-esteem questions; this is clear from its brochures on financial edges, where the edges for recording claims against choices great for citizens have been logically expanded. Conviction, soundness, and speedy goals of questions stay to be basic purposes of concern.


Frequently Asked Questions

Q.1. Is the INR 50 million threshold per assessment year or per application?

There is no threshold limit for regular matters. The limit of INR 50 million is set only for search cases where the benefit of this scheme can be availed when disputed tax is less than INR 50 million.  This specified limit of INR 50 million is applicable per assessment year, and thus declaration can be filed for those years having disputed tax below the aforesaid limit in case of search-and-seizure cases.

Q.2. What if Income Tax Appellate Tribunal (“ITAT”) referred the matter to Transfer Pricing Officer (“TPO”) or Assessing Officer (“AO”) and it is pending with AO/TPO. Will these matters be covered?

If an appellate authority has set aside an order for giving proper opportunity to the file of the  AO/TPO or to carry out examination of the issue with specific direction, the assesses would be eligible to avail the Vivad se Vishwas (VsV) scheme. The application can be filed considering that the AO/TPO has decided the issue against the assessee. However, where assessment has been cancelled with a direction that assessment is to be framed de novo, such cases have been excluded.

Q.3. What if ITAT refers the few points back to TPO or AO and gives a favorable judgement on few points. Remand back is pending with AO/TPO. Will these matters be covered?

As stated in response to the above question, set aside matters to the file of AO/TPO are eligible for the VsV scheme. It is clarified that the appellant shall also be required to settle other issues, if any, which have not been set aside in that assessment and in respect to which, other appeals are pending or time to file an appeal has not expired. In such a case, disputed tax shall be the tax (including surcharge and cess) payable, if the addition with respect to the issues set aside by the appellate authority were to be repeated by the AO/TPO. For example, if the tribunal has decided,

Issue-A – in favour of the assessee,

Issue-B – against the assessee, and

Issue-C – restored to the AO/TPO

In such a scenario, amount payable would be calculated by considering Issue-A – 50 percent of disputed tax

Issue-B – 100 percent of disputed tax

Issue-C – 100 percent of disputed tax


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