Circular under section 10 of the Direct Tax Vivad se Vishwas Act, 2020

Last updated: 05 March 2021

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This circular clarifies the Direct Tax Vivad se Vishwas Act, 2020. It addresses a gap where Assessing Officers previously lacked a provision to implement orders passed by the designated authority under the Act. Following representations, it is now confirmed that Assessing Officers are empowered to pass consequential orders under the Income-tax Act, 1961, to give effect to the decisions made by the designated authority.

F. No. IT(A)1112020-T1'L
Government of India
Ministry of Finance
Department of Revenue
Ccntr-al Board of Direct Taxes
New Delhi, 4'" March, 2021

SUb.: Circular under section 10 of the lJircct Tax Vivad sc Vishwas Act, 2020 _ reg.

The Direct Tax Vivad sc Vishwas Act, 2020 (" Vivad se Vi,\'!nva.f') was enacted on 171h March, 2020 with the objective of infer alia reducing pending income lax disputes, generating timely revenue for the Government and benefitting taxpayers by providing them peace of mind, certainty and savings on account of time and resources that would otherwise be spent on the long-drawn and vexatious litigation process to resolve the disputes.

2. Sub-section (I) of section 5 of Vivad l'e VishlV(L~ provides that the designated authority (hereinafter rcfcrrcd to as "DA") shall pass a dctermination order within fifteen days from the date of rcceipt oflhe declaration. The DA is also required to pass another order under sub-section (2) of section 5 of Vivad ~e ViS/lim.'! for full and final settlement of the tax arrear.

3. Representations have been received from the ficld authorities that under the Income-tax Act, 1961 (hcreinafter referred to as "the Act") there is no provision available to the Assessing Officer to give effect to the order passed by the DA under sub-section (I) of section 5 and under sub-section (2) of section 5 of the Vimd.\'e Vishwas in the ease of a declarant. Since orders passed by the DA have a consequential effect under the Act, it has been requested that suitable clarifications may be issued to enable the AO to pass consequential orders under the Act.

4. In view of the foregoing, and in exercise of the powers conferred on the Board under section 10 of Vivad :ie Vishwas. it is hereby clarified that where the DA has passed orders under sub-sections (I) and (2) of section 5 of Vivad se Vi,s!lIvas, the Assessing Officer shall pass consequential order under the Act.

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FAQ :

The Direct Tax Vivad se Vishwas Act, 2020 was enacted to reduce pending income tax disputes, generate timely revenue, and provide taxpayers with certainty and savings.

The designated authority (DA) is required to pass a determination order within fifteen days of receiving a declaration and another order for full and final settlement of tax arrears.

Assessing Officers did not have a provision under the Income-tax Act, 1961, to give effect to the orders passed by the designated authority under the Vivad se Vishwas Act.

This circular clarifies that where the designated authority has passed orders under section 5 of the Vivad se Vishwas Act, the Assessing Officer shall pass a consequential order under the Income-tax Act, 1961.

This circular is issued under section 10 of the Direct Tax Vivad se Vishwas Act, 2020.