A Faster Path to Tax Resolution: Vivad Se Vishwas

The Central Government has introduced the Direct Tax Vivad Se Vishwas Scheme, 2024, under the Finance (No.2) Act, 2024, with the aim to resolve pending tax disputes and provide relief to taxpayers by reducing litigation. This Scheme comes into force upon its notification in the Official Gazette on September 20, 2024.

Objective of the Scheme

The Vivad Se Vishwas Scheme aims to settle disputes between taxpayers and tax authorities by allowing appellants to declare their tax arrears and settle them at reduced payment levels, depending on the status of their case. This Scheme facilitates speedy resolution of disputes while also freeing up valuable resources of the Income-tax Department and the judiciary.

Who can avail the Scheme?

Any person including Individual, Firm, HUF, Company, Association of person or body of individuals who have an appeal, writ petition, or special leave petition pending as of July 22, 2024. This also includes those who have filed objections before the Dispute Resolution Panel (DRP) under section 144C and pending with the DRP or the Assessing Officer has not passed the order? consequential to the directions of the DRP, applications for revision under section 264, or appeals that are awaiting decisions from various appellate forums, such as the Supreme Court, High Courts, Income Tax Appellate Tribunal (ITAT), and Commissioner (Appeals).

Settlement under the Scheme

The amount payable under this Scheme depends on when the appellant files the declaration:

Concessional settlement?

• In a case where an appeal or writ petition or special leave petition is filed by the income-tax authority on any disputed issue before the appellate forum, the amount payable shall be 50% of the amount in the Table above calculated on such issue, in the manner? prescribed in the scheme.
• In a case where an appeal is filed before the CIT(Appeals) or JCIT(Appeals) or objections is filed before the Dispute Resolution Panel (DRP)? on any issue on which? already? the taxpayer got a decision in his favour from theITAT and the decision has? not? been reversed by the High Court or the Supreme Court) or got a decision in his favour from? the High Court and decision has? not? beeb reversed by the Supreme Court, the amount payable shall be 50% of the amount in the Table above calculated on such issue, in the? manner prescribed in the scheme.
• In a case where an appeal is filed by the appellant on any issue before the ITAT? on which the taxpayer has already got a decision in his favour from the High Court and the decision has not been reversed by the Supreme Court, the amount payable shall be 50% of the amount? in the Table above calculated on such issue, in the? manner? prescribed in the scheme.

Simplified Process

Taxpayers can avail of this Scheme by submitting a declaration to the designated authority and making the required payments. Once the payment is made and confirmed, the tax arrear dispute will be deemed settled, granting the appellant immunity from further litigation or penalties related to the dispute. Additionally, the declarant is required to withdraw any appeals or petitions filed in courts or tribunals.

Conclusion

The Direct Tax Vivad Se Vishwas Scheme, 2024 provides a valuable opportunity for taxpayers to resolve their disputes with the Income-tax Department swiftly and without further litigation. It offers a structured and clear framework for settlement, promoting a cooperative tax environment while benefiting both the government and taxpayers. Taxpayers are encouraged to take advantage of this Scheme by December 31, 2024, to avail of the most favorable terms.

For more details and to file under the Scheme, taxpayers are advised to consult the relevant provisions, forms and procedures as specified under the scheme and the Finance (No.2)Act, 2024.

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