Tuesday, 27 December 2016

Vodafone-like Sec 9 retrospective amendment cases covered by Direct Tax Dispute Resolution Scheme, 2016

CBDT issues 8 FAQs on the Direct Tax Dispute Resolution Scheme, 2016 (‘Scheme’); CBDT clarifies that assessee would be eligible to opt for the Scheme in case where an
addition has been made before a retrospective amendment to the IT Act (which is subsequently validated by the amendment), if the dispute is pending as on February 29, 2016; However CBDT adds that the assessee cannot contest the constitutional validity of the retrospective amendment before HC/ SC once he avails the Scheme; Specifies that the question of withdrawal of appeal by Revenue owing to opting of the Scheme by the assessee in some other year(s) on a similar issue does not arise as the Scheme does not envisage withdrawal of any appeal/ proceeding by the Revenue; States that the term ‘dispute pending as on 29.02.2016’ refers to the tax determined under the IT Act or the Wealth-tax Act which has been disputed by the assessee and thus specified tax determined by the Revenue after the cut-off date will not be covered under the Scheme; Given that the penalty order u/s 271C/ 271CA is not linked to the assessment proceedings, states that such orders are not covered under the Scheme, also adds that assessment consequent to search u/s 143(3) r.w.s. 153B is not covered under the Scheme; CBDT also says that tax payments under the Scheme cannot be allowed to be made in installments; Lastly observes that clause (5) of Sec. 203 provides that in a case where the conditions specified therein are not fulfilled, it shall be presumed as if the declaration was never made under the Scheme and thus “in case of rejection of declaration, the proceedings pending against the assessee before issuance of certificate under 204(1) shall stand revived.” 

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