Re: Settlement commission

Department has filed Writ against the order passed by the Settlement Commission, can an assessee file declaration under the Scheme.? If yes how to compute the tax is dispute?

As per definition of S.2(1)(a) ,  “appellant” means— 

(i) a person in whose case an appeal or a writ petition or special leave petition has been filed either by him or by the income-tax authority or by both, before an appellate forum and such appeal or petition is pending as on the specified date;   

 Further,As per S 2 (1) (o) “tax arrear” means,— 

(i) the aggregate amount of disputed tax, interest chargeable or charged on such disputed tax, and penalty leviable or levied on such disputed tax; or 

(ii) disputed interest; or (iii) disputed penalty; or (iv) disputed fee, 

as determined under the provisions of the Income-tax Act. 

The declaration can be filed in respect of Writ petition is filed by the Department.  There may be case where the writ is admitted or there may be case the writ may be pending for admission; the appellant can file the declaration. 

Further, CBDT vide Circular No. 7 of 2020 dated March 4, 2020 at Q. No 24, which reads as under: 

If the appeal is filed before High Court and is pending for admission as on 31 -1 -2020, whether the case is eligible for Vivad Se Vishwas ? 

Ans. “ Yes” The same principle will apply to Writ also     

As regards the computation of tax arrears is concerned, after passing the order under section 245D(1) of the Income tax Act, 1961 (‘Act’) allowing the Settlement application to be proceeded with, a copy  of annexure to the said application together with a copy of each of the statements and other documents accompanying such annexure shall be forwarded to the Commissioner along with a copy of the said order with the direction that Commissioner shall furnish a further report with in ninety days of the receipt  of the said annexure.  Normally, the Commissioner quantifies the amount to be settled as per their working. Accordingly, the on the basis of quantification tax can be calculated. The writ being filed by the department only 50% tax in disputes is to be paid. (Refer CBDT Circular No. 7 of 2020 dated March 4, 2020, at Q. No. 28 & Ans.).    

On receipt of the certification the querist through their advocate on record can make an application to with draw the appeal of the revenue. On hearing other side, the Court will pass the order dismissing the appeal of the revenue. 

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