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Changes in income tax rules: Another chance for taxpayers to file tax settlement

What comes as a big relief to the taxpayers? Central Board of Direct Taxes (CBDT) issued a statement on Tuesday, giving additional time to the said taxpayers To file your application for tax settlement. This tax settlement is to be done to the Interim Board for Settlement. The organization has given citizens till 30 September to file it. The Central Board of Direct Taxes decided that the only people who are eligible for relief are those who were eligible to file an application for settlement as on January 31, 2021, for the assessment year for which the application is to be filed. Additionally, in the statement, the Central Board of Direct Taxes said that the Finance Act, 2021 has amended the provisions of Income Tax Act, 1961 To provide, inter alia, that the Income Tax Settlement Commission (“ITSC”) shall cease to function with effect from 1st February, 2021.

The statement also said that no application for disposal can be filed on or after February 1, the date on which the Finance Bill, 2021 was laid before the Lok Sabha. It was further extended to clear the pending settlement applications till January 31, 2021. To accomplish this, the government constituted an Interim Settlement Board.

The Central Board of Direct Taxes in the statement said, “…the Central Government has constituted an Interim Board (hereinafter referred to as the ‘Interim Board’) for settlement vide notification no. 91 of 2021 dated 10.08.2021. ” According to the release, taxpayers who are in pending cases have the option to withdraw their applications within the specified time and inform the Assessing Officer about the withdrawal.

“It is shown that as on 01.02.2021 many taxpayers were in advanced stages of filing their application for settlement before ITSC. Further, some taxpayers have requested the High Courts that their applications for settlement may be accepted. In some cases, the Hon’ble High Courts, while giving interim relief, have directed to accept the settlement applications even after 01.02.2021. This has resulted in uncertainty and protracted litigation,” the Central Board of Direct Taxes said. The entity said about the extension in an effort to provide some relief to taxpayers, adding that eligible individuals can file till September 30, if they fulfill certain conditions.

The Central Board of Direct Taxes said, “In order to provide relief to those taxpayers who were eligible to file the application up to 31.01. has gone. That applications for settlement may be filed by the taxpayers before the Interim Board by 30th September, 2021 if the following conditions are fulfilled…”

Taxpayers can file by the given date if, as mentioned earlier, the assessee was eligible to file for settlement as on 31st January, 2021 for the assessment years for which the application was sought to be filed. The second condition was that all relevant proceedings of the assessee were listed as pending till the date of filing of application for disposal. These applications shall then be treated as ‘pending applications’ under clause (eb) of section 245A of the Act and shall be disposed of by the Interim Board in accordance with the provisions of the Act.

“It is clarified that the taxpayers who have filed such applications shall not have the option to withdraw such applications in accordance with the provisions of section 245M of the Act. Further, those taxpayers who have already filed application for settlement on or after 01.02.2021 as per directions of various High Courts and who are otherwise eligible to file such application as per Para 3 above The application shall not be required for re-filing of such application on the date of the said filing. Legislative amendments in this regard will be proposed in due course,” said the Central Board of Direct Taxes.

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