CBDT Circular No. 12 of 2024 Providing Guidance on the Direct Tax Vivad se Vishwas Scheme, 2024

 The Central Board of Direct Taxes (CBDT) has recently released Circular No. 12 of 2024, which provides timely clarification in the form of FAQs on the Direct Tax Vivad se Vishwas (DTVsV) Scheme, 2024. This prompt clarification is commendable, as it helps to address questions from taxpayers and ensures smooth implementation of the scheme. The 2024 scheme bears resemblance to the previous DTVsV Scheme of 2020, though it introduces three notable differences:

1. Appeals Covered: DTVsV 2024 only covers appeals that were pending as of July 22, 2024. It does not include cases where the time limit for filing an appeal was still open as of this date, nor appeals that were pending but subsequently disposed of by appellate authorities before the applicant submitted Declaration Form 1. In contrast, DTVsV 2020 covered both types of cases, providing broader eligibility.

2. Exclusion of Search-related Assessments: Under DTVsV 2024, resolution of search-related assessments is not possible, whereas this option was available in the 2020 scheme, marking a significant policy shift.

3. No Refund of Extra Tax Paid: Unlike DTVsV 2020, which allowed taxpayers to receive refunds for any extra tax paid, DTVsV 2024 does not offer this provision.

Ideal Cases for Opting for DTVsV 2024:

• Older Cases with High Interest: Appeals related to older cases with higher interest rates under Sections 234B and 234C may benefit significantly, as they can resolve these cases and potentially reduce the interest burden.
• Section 201 Orders: Appeals on orders under Section 201 are advantageous, as the resolution allows simultaneous benefit of resolving assessment orders involving disallowance of related expenditures under Section 40(a)(i)/(ia) without additional disputed tax.
• Quantum Additions: For appeals involving quantum additions, DTVsV 2024 allows applicants to resolve corresponding penalty appeals without paying extra disputed tax, which can provide significant relief.

Additionally, writ petitions filed against notices under Sections 148A/148, and pending as of July 22, 2024, are not eligible for DTVsV 2024, as assessment orders determining tax liability have not yet been issued. Consequently, cases impacted by the Rajeev Bansal judgment are also not eligible.

Reflecting on this latest development brings back memories of when I authored the book Case Studies & Procedures under Direct Tax Vivad se Vishwas Act, 2020 with Taxmann Publications. It feels like only yesterday that the scheme was first launched, yet so much has evolved since then. The passage of time, while swift, leaves an indelible mark, highlighting the continuity of efforts to simplify tax compliance and dispute resolution for taxpayers across years.