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CBDT allows taxpayers to file applications till September 30 for disposal of pending cases

New Delhi: The Finance Ministry on Tuesday said that income tax payers can file applications before the Interim Board for disposal of tax cases pending at the level of Income Tax Settlement Commission (ITSC) till September 30.

The Finance Act, 2021 has amended the provisions of the Income Tax Act, 1961, to provide that the ITSC shall cease to function with effect from February 1, 2021. Further, it is also provided that no application for settlement can be filed. On or after February 1, was the date on which the Finance Bill, 2021 was laid before the Lok Sabha.

The Government had constituted an Interim Settlement Board to dispose of the settlement applications pending till January 31, 2021. In pending cases, taxpayers have the option to withdraw their applications within the specified time and inform the Assessing Officer about such withdrawal.

Subsequently, the ministry had received representations that several taxpayers were at an advanced stage of filing their applications for settlement before the ITSC by February 1. Further, some taxpayers have requested the High Courts that their applications for settlement may be accepted. In some cases, the High Courts have granted interim relief and directed to accept the disposal applications even after 1 February 2021. This has resulted in uncertainty and protracted litigation, the ministry said.

“In order to provide relief to those taxpayers who were eligible to file an application by 31st January, 2021, but could not file it due to the lapse of the Finance Act, 2021 due to the abolition of ITSC, it has been decided that That the application for settlement may be filed by the taxpayers before the Interim Board by September 30, 2021,” the ministry said in a statement.

However, this would be subject to the condition that the assessee was eligible to file an application for settlement as on 31st January, 2021 for the assessment year for which the application is sought to be filed. This is also subject to the condition that all relevant valuation proceedings of the assessee are pending as on the date of filing the application for settlement.

Such applications, subject to their validity, shall be treated as ‘pending applications’ and shall be disposed of by the Interim Board in accordance with the provisions of the Act.

“It is clarified that the taxpayers filing such applications will not have the option to withdraw such applications.

“Furthermore, those taxpayers who have already filed an application for settlement on or after 1st February, 2021 in accordance with the directions of various High Courts and who are otherwise eligible to file such application … Such application shall not be required to be re-filed on the date of filing,” the ministry said.

Legislative amendments in this regard will be brought in due course.

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