Last Opportunity to submit an application to Settlement Commission till 30.09.2021!
CBDT through a press release dated 07 September 2021, has allowed taxpayers an opportunity to file application for settlement. The Finance Act, 2021 has amended the provisions of the Income-tax Act, 1961 (Act) to inter alia provide that the Income-tax Settlement Commission (ITSC) shall cease to operate with effect from 01.02.2021. Further, it has also been provided that no application for settlement can be filed on or after 01.02.2021, which was the date on which the Finance Bill, 2021 was laid before the Lok Sabha.
In order to dispose off the pending settlement applications as on 31.01.2021, the Central Government has constituted Interim Board for Settlement (hereinafter referred to as the “Interim Board”), vide Notification no. 91 of 2021 dated 10.08.2021.
Only taxpayers who were eligible to file application as on 31.01.2021, but could not file the same due to cessation of ITSC vide Finance Act, 2021, can file applications for settlement by 30th September, 2021 before the Interim Board. However, following conditions has to be satisfied by the applicant:
i. The assessee was eligible to file application for settlement on 31.01.2021 for the assessment years for which the application is sought to be filed (relevant assessment years); and
ii. all the relevant assessment proceedings of the assessee are pending as on the date of filing the application for settlement.
Circumstances /conditions where application for settlement of cases could be filed on 31.01.2021 are as under:
Application for settlement of cases under section 245C can be made in following circumstances where –
– the additional amount of income-tax payable on the income disclosed in the application exceeds fifty lakh rupees in a case where proceedings for assessment or reassessment for any of the assessment years referred to search or survey related cases under clause (b) of sub-section (1) of section 153A or clause (b) of sub-section (1) of section 153B in case of a person referred to in section 153A or section 153C have been initiated,
– the additional amount of income-tax payable on the income disclosed in the application exceeds ten lakh rupees, in a case where—
(A) the applicant is related to the person referred to in clause (i) who has filed an application (hereafter in this sub-section referred to as “specified person”); and
(B) the proceedings for assessment or re-assessment for any of the assessment years referred to in clause (b) of sub-section (1) of section 153A or clause (b) of sub-section (1) of section 153B in case of the applicant, being a person referred to in section 153A or section 153C, have been initiated
– in any other case, the additional amount of income-tax payable on the income disclosed in the application exceeds ten lakh rupees,
– tax and the interest thereon, which would have been paid under the provisions of this Act had the income disclosed in the application been declared in the return of income before the Assessing Officer on the date of application, has been paid on or before the date of making the application and the proof of such payment is attached with the application.
Erstwhile Procedure for filing application for settlement of cases
An assessee may at any stage of a case relating to him, make an application under Section 245C(1) in quintuplicate in Form no. 34B* as per Rule 44C along with a fee of Rs. 500/-. The assessee shall, on the date on which he makes the application to the Settlement Commission (now Interim Board), shall also intimate in Form No. 34BA* to the Assessing Officer of having made such application to the Commission.
* Both forms were omitted vide Rule 130 by the Income-tax (Twenty first Amendment) Rules, 2021, w.e.f. 29-7-2021. However expected to re-enshrined to give effect to the above press release.
Author Bio
It relevant that the assessee who prefers application as per the relaxed press release, is also required to be eligible to file an application on 31.01.2021. To explain further, the notices under section 153A etc, should been issued prior to that date and the assessment for said be pending as on the date of filing the application.