More taxpayers now eligible for Vivad Se Vishwas to settle tax disputes

Scheme allows taxpayers to pay disputed tax amount and close litigation with government

The Central Board of Direct Taxes (CBDT) has issued an order to provide relief to taxpayers who were unable to apply for the Direct Tax Vivad Se Vishwas Scheme, 2024, due to reasons related to the deadline.

 

Gouri Puri, Partner, Shardul Amarchand Mangaldas & Co. explains what the order states. The taxpayers who received an order on or before July 22, 2024, and still had time to file an appeal by that date, but filed the appeal after such date (without seeking condonation for delay), will be eligible to apply under the scheme.

 

Further, Rahul Charkha, partner at Economic Laws Practice explained that the Delhi High Court, while hearing a writ petition, observed that VSV 2024 discriminates between taxpayers based on timing of filing an appeal. It directed the CBDT to consider the scheme to be made applicable to taxpayers in whose case the statutory time limit for filing of appeal has not expired as on July 22, 2024.

   

The CBDT then issued an order for the scheme's implementation in cases where:

 

An order was passed against a taxpayer on or before July 22, 2024, the specified date under the scheme.

 

The time to file an appeal against such an order was available as of the specified date.

 

The appeal was filed after the specified date but within the stipulated time allowed for filing appeals.

 

The appeal was submitted without any application for condonation of delay.

 

To resolve these challenges, the government has invoked Section 98 of the Finance (No. 2) Act, 2024, which empowers it to address difficulties in implementing the scheme without contradicting its provisions. The issued order outlines the following measures:

 

Appeals filed in such cases will be treated as pending as of July 22, 2024, for the purpose of the scheme.

 

The taxpayer concerned will be deemed an appellant under the scheme.

 

Disputed tax amounts will be calculated based on the appeal filed.

 

The scheme's provisions and related rules will apply accordingly to these cases.

 

“It may be noted that as per this notification, filing of appeal within the time is must. Accordingly, where appeal has not been filed after July 22 within the time prescribed, such cases will not be eligible,” said Ankit Jain, partner, Ved Jain & Associates, a legal firm.

 

How will this order benefit taxpayers?

 

"The order simplifies the process for taxpayers, allowing them to participate in the scheme despite minor procedural delays. It removes the need for delayed condonation applications and ensures disputes are resolved on favourable terms,” said Ankit Namdeo, founder of ANK Advisors, another legal firm.