MM TAX CLUB

On 20th January 2025, the Central Board of Direct Taxes (CBDT) issued an important clarification under S.O. 348(E) to address certain challenges encountered during the implementation of the Direct Tax Vivad Se Vishwas Scheme, 2024.

What is the Vivad Se Vishwas Scheme, 2024?

Introduced through the Finance (No.2) Act, 2024, this Scheme came into effect on 1st October 2024. It aims to reduce litigation and provide a simplified mechanism for resolving direct tax disputes.

Why Was This Order Issued?

Certain complexities arose in cases where:

1. An order was passed on or before 22nd July 2024 (the specified date).
2. The time for filing an appeal was still available as of 22nd July 2024.
3. The appeal was filed after 22nd July 2024 but within the stipulated time limit for filing such appeals.
4. The appeal was filed without an application for condonation of delay.

These scenarios created ambiguity regarding the eligibility of such appeals under the Scheme.

Key Clarifications Provided by CBDT

To address these issues, the CBDT has invoked the powers under section 98 of the Finance (No.2) Act, 2024, and clarified as follows:

1. Appeals Considered Pending as of 22nd July 2024:
   Appeals filed after the specified date but within the stipulated time will be treated as pending appeals as of 22nd July 2024.

2. Eligibility as Appellants:
   Individuals in such cases will be treated as appellants under the Scheme, ensuring their eligibility to participate.

3. Calculation of Disputed Tax:
   The amount of disputed tax will be calculated based on the details of the filed appeal.

4. Applicability of Scheme Provisions:
   All relevant provisions of the Scheme, along with the applicable rules, will extend to these cases.

Significance of This Clarification

This Order removes any doubts about eligibility for appeals filed after 22nd July 2024, within the stipulated time, and ensures that taxpayers can avail themselves of the benefits of the Scheme. It reinforces the Government's commitment to creating a fair and accessible resolution mechanism for taxpayers.

Final Words

The Vivad Se Vishwas Scheme, 2024, continues to serve as a crucial initiative in reducing litigation and facilitating a smoother tax resolution process. This clarification by CBDT ensures more inclusivity and clarity, aligning with the Scheme’s overarching objective of resolving disputes efficiently.

For further details, visit the Ministry of Finance or the CBDT website.