The Direct Tax Vivad se Vishwas Rules, 2024, aim to streamline the resolution of direct tax disputes, ensuring an amicable closure of long-pending litigations. These rules, in continuation of the government’s initiative through the Vivad se Vishwas Scheme, provide taxpayers a straightforward mechanism to settle disputes by paying specified amounts.
Amount Payable by Declarant
According to Rule 3, the amount payable by a declarant depends on the date the declaration is filed with the designated authority. If a declarant files a declaration on or before December 31, 2024, the amount payable is specified in the Table under Section 90 of the Act, subject to specific conditions. However, if the declaration is filed after January 1, 2025, but before the final deadline, the amount payable will differ as per the same table, but again subject to the provided conditions.
A special provision is made for cases where the dispute includes issues that have been previously decided in favor of the declarant. In such cases, the disputed tax will be calculated in proportion to the disputed income relating to the issues covered in the declarant’s favor, ensuring fairness in the calculation of liabilities.
Form of Declaration and Undertaking
Rule 4 outlines the form and submission process for declarations. The declaration, related to any dispute under Section 91(1), and the undertaking under Section 91(4), must be filed in Form-1 to the designated authority. These forms must be submitted separately for each order being contested.
A declarant who is involved in an appeal or legal petition, along with the income-tax authority, will only need to file a single Form-1. This simplifies the process, ensuring that the same order does not require multiple declarations. Verification of the declaration must be done by the declarant or any authorized individual in line with Section 140 of the Income Tax Act, 1961.
Certificate and Intimation of Payment
After receiving the declaration, the designated authority will issue an acknowledgment electronically. The final certificate, as mentioned under Section 92(1), will also be issued electronically in Form-2. Following the issuance of this certificate, the declarant must submit proof of payment, along with the withdrawal of any legal petitions, in Form-3.
Once all payments and withdrawals are confirmed, the designated authority will issue an order in Form-4, thus concluding the settlement of the disputed amount.
Computation of Disputed Tax: Special Cases
Rules 9 and 10 detail the manner of computing disputed tax where issues like losses, unabsorbed depreciation, or Minimum Alternate Tax (MAT) credit are involved. Declarants are given two options in both cases:
- Include the tax on the reduced amount of loss/unabsorbed depreciation or MAT credit as disputed tax, while ignoring the reduction.
- Carry forward the reduced amount, but pay the tax and interest applicable due to the reduction.
Additionally, for issues covered in favor of the declarant, only half of the reduction will be considered while computing the tax to be carried forward.
System Management
Rule 8 entrusts the Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems) with laying down the procedure for filing, verifying, and managing the forms and declarations electronically. This includes the security, archival, and retrieval of all relevant documents, ensuring smooth and transparent handling of cases.
