Clarifications on provisions of the Direct Tax Vivad se Vishwas Act, 2020

Last updated: 24 March 2021

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This circular provides updated clarifications regarding 'search cases' under the Direct Tax Vivad se Vishwas Act, 2020. It aims to reduce tax litigation and offer certainty to taxpayers. The clarification modifies previous definitions to ensure a clearer understanding of what constitutes a 'search case' for the purposes of the Act.

Circular No. 04/2021 F. No. IT(A)/1/2020-TlL Government ofIndia Ministry of Finance Department of Revenue Central Board of Direct Taxes Dated: 23rd March, 2021 Sub.: Clarifications on provisions of the Direct Tax Vivad se Vishwas Act, 2020 - reg. With the objective to inter alia redu

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FAQ :

The Act was enacted to reduce pending income tax litigation, generate timely revenue for the Government, and provide taxpayers with peace of mind, certainty, and savings.

Sections 10 and 11 of the Vivad se Vishwas Act empower the Central Government or the Central Board of Direct Taxes to issue directions or orders in the public interest or to remove difficulties.

Previously, it was clarified that if an assessment order was framed under section 143(3) or 144 of the Income-tax Act based on a search in another taxpayer's case, it was considered a 'search case'.

A 'search case' now means an assessment or reassessment made under sections 143(3)/144/147/153A/153C/158BC of the Income-tax Act in the case of a person referred to in section 153A, 153C, 158BC, or 158BD, based on a search initiated under section 132 or requisition under section 132A.

FAQ no. 70 of circular 21/2020, which previously clarified eligibility for search cases, stands modified to the extent of the new definition provided in this circular.