THE DIRECT TAX VIVAD SE VISHWAS BILL, 2020
A
BILL
to provide for resolution of disputed tax and for matters connected therewith or
incidental thereto.
BE it enacted by Parliament in the Seventy-first Year of the Republic of India as follows:—
1. This Act may be called the Direct Tax Vivad se Vishwas Act, 2020.
2. (1) In this Act, unless the context otherwise requires,—
(a)”appellant” means the person or the income-tax authority or both who has
filed appeal before the appellate forum and such appeal is pending on the specified
date;
(b)”appellate forum” means the Supreme Court or the High Court or the Income
Tax Appellate Tribunal or the Commissioner (Appeals);
Short title.
Definitions.
Bill No. 29 of 2020
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TO BE INTRODUCED IN LOK SABHA
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(c) “declarant” means a person who files declaration under section 4;
(d) “declaration” means the declaration filed under section 4;
(e) “designated authority” means an officer not below the rankof a Commissioner
of Income-tax notified by the Principal Chief Commissioner for the purposes of this
Act;
(f)”disputed fee” means the fee determined under the provisions of the
Income-tax Act, 1961 in respect of which appeal has been filed by the appellant;
(g) “disputed income”, in relation to an assessment year, means the whole or so
much of the total income as is relatable to the disputed tax;
(h) “disputed interest” means the interest determined in any case under the
provisions of the Income-tax Act, 1961, where—
(i) such interest is not charged or chargeable on disputed tax;
(ii) an appeal has been filed by the appellant in respect of such interest;
(i) “disputed penalty” means the penalty determined in any case under the
provisions of the Income-tax Act, 1961, where—
(i) such penalty is not levied or leviable in respect of disputed income or
disputed tax, as the case may be;
(ii) an appeal has been filed by the appellant in respect of such penalty;
( j)”disputed tax”, in relation to an assessment year, means—
(i) tax determined under the Income-tax Act, 1961 in accordance with the
following formula—
(A – B) + (C – D)where,
A = an amount of tax on the total income assessed as per the provisions of
the Income-tax Act, 1961other than the provisions contained in section 115JB or
section 115JC of the Income-tax Act, 1961(herein after called general provisions);
B = an amount of tax that would have been chargeable had the total
income assessed as per the general provisions been reduced by the amount of
income in respect of which appeal has been filed by the appellant;
C = an amount of tax on the total income assessed as per the provisions
contained in section 115JB or section 115JC of the Income-tax Act, 1961;
D = an amount of tax that would have been chargeable had the total
income assessed as per the provisions contained in section 115JB or section
115JC of the Income-tax Act, 1961 been reduced by the amount of income in
respect of which appeal has been filed by the appellant:
Provided that where the amount of income in respect of which appeal has
been filed by the appellant is considered under the provisions contained in
section 115JB or section 115JC of the Income-tax Act, 1961 and under general
provisions, such amount shall not be reduced from total income assessed while
determining the amount under item D:
Provided further that in a case where the provisions contained in section
115JB or section 115JC of the Income-taxAct, 1961 are not applicable, the item
(C – D) in the formula shall be ignored:
Provided also that in a case where the amount of income, in respect of
which appeal has been filed by the appellant, has the effect of reducing the loss
declared in the return or converting that loss into income, the amount of disputed
tax shall be determined in accordance with the formula specified in sub-clause (i)
with the modification that the amount to be determined for item (A – B) in that
formula shall be the amount of tax that would have been chargeable on the
income in respect of which appeal has been filed by the appellant had such
income been the total income;
43 of 1961.
43 of 1961.
43 of 1961.
43 of 1961.
43 of 1961.
43 of 1961.
43 of 1961.
43 of 1961.
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(ii) tax determined under the section 200A or section 201 or subsection
(6A) of section 206C or section 206CB of the Income-tax Act, 1961 in
respect of which appeal has been filed by the appellant.
(k) “Income-tax Act” means the Income-tax Act, 1961;
(l)”last date” means such date as may be notified by the Central Government in
the Official Gazette;
(m) “prescribed” means prescribed by rules made under this Act;
(n) “specified date” means the 31st day of January, 2020;
(o) “tax arrear” means,—
(i) the aggregate amount of disputed tax, interest chargeable or charged
on such disputed tax, and penalty leviable or levied on such disputed tax; or
(ii) disputed interest; or
(iii) disputed penalty; or
(iv) disputed fee,
as determined under the provisions of the Income-tax Act;
(2)The words and expressions used herein and not defined but defined in the Incometax
Act shall have the meanings respectively assigned to them in that Act.
3. Subject to the provisions of this Act, where a declarant files under the provisions of
this Act on or before the last date, a declaration to the designated authority in accordance
with the provisions of section 4 in respect of tax arrear, then, notwithstanding anything
contained in the Income-tax Act or any other law for the time being in force, the amount
payable by the declarant under this Act shall be as under, namely:—
Sl. Nature of tax arrear Amount payable Amount payable
No. under this Act on under this Act on or after
or before the the 1st day of April, 2020
31st day of but on or before the last date.
March, 2020.
(a) where the tax arrear is amount of the The aggregate of the amount
the aggregate amount disputed tax. of disputed tax and ten per
of disputed tax, interest cent. of disputed tax:
chargeable or charged
on such disputed tax Provided that where the ten per
and penalty leviable or cent.of disputed tax exceeds
levied on such disputed the aggregate amount of
tax. interest chargeable or charged
on such disputed tax and
penalty leviable or levied on
such disputed tax, the excess
shall be ignored for the purpose
of computation of amount
payable under this Act .
(b) where the tax arrear twenty-five per cent. thirty per cent. of disputed
relates to disputed of disputed interest interest or disputed penalty or
interest or disputed or disputed penalty disputed fee.
penalty or disputed fee. or disputed fee.
43 of 1961.
43 of 1961.
Amount
payable by
declarant.
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4. (1) The declaration referred to in section 3 shall be filed by the declarant before the
designated authority in such form and verified in such manner as may be prescribed.
(2) Upon the filing the declaration, any appeal pending before the Income Tax Appellate
Tribunal or Commissioner (Appeals), in respect of the disputed income or disputed interest
or disputed penalty or disputed fee and tax arrear shall be deemed to have been withdrawn
from the date on which certificate under sub-section (1) of section 5 is issued by the designated
authority.
(3) Where the declarant has filed any appeal before the appellate forum or any writ
petition before the High Court or the Supreme Court against any order in respect of tax arrear,
he shall withdraw such appeal or writ petition with the leave of the Court wherever
required and furnish proof of such withdrawal alongwith the declaration referred to in
sub-section (1).
(4) Where the declarant has initiated any proceeding for arbitration, conciliation or
mediation, or has given any notice thereof under any law for the time being in force or under
any agreement entered into by India with any other country or territory outside India whether
for protection of investment or otherwise, he shall withdraw the claim, if any, in such
proceedings or notice prior to making the declaration and furnish proof thereof alongwith
the declaration referred to in sub-section (1).
(5) Without prejudice to the provisions of sub-sections (2), (3) and (4), the declarant
shall furnish an undertaking waiving his right, whether direct or indirect, to seek or pursue
any remedy or any claim in relation to the tax arrear which may otherwise be available to him
under any law for the time being in force, in equity, under statute or under any agreement
entered into by India with any country or territory outside India whether for protection of
investment or otherwise and the undertaking shall be made in such form and manner as may
be prescribed.
(6) The declaration under sub-section (1) shall be presumed never to have been made
if,—
(a) any material particular furnished in the declaration is found to be false at any
stage;
(b) the declarant violates any of the conditions referred to in this Act;
(c) the declarant acts in any manner which is not in accordance with the
undertaking given by him under sub-section (5),
and in such cases, all the proceedings and claims which were withdrawn under section 4 and
all the consequences under the Income-tax Act against the declarant shall be deemed to
have been revived.
(7) No appellate forum or arbitrator, conciliator or mediator shall proceed to decide any
issue relating to the tax arrear mentioned in the declaration in respect of which an order has
been made under sub-section (1) of section 5 by the designated authority or the payment of
sum determined under that section.
5. (1) The designated authority shall, within a period of fifteen days from the date of
receipt of the declaration, by order, determine the amount payable by the declarant in
accordance with the provisions of this Act and grant a certificate to the declarant containing
particulars of the tax arrear and the amount payable after such determination, in such form as
may be prescribed.
(2) The declarant shall pay the amount determined under sub-section (1) within fifteen
days of the date of receipt of the certificate and intimate the details of such payment to the
designated authority in the prescribed form and thereupon the designated authority shall
pass an order stating that the declarant has paid the amount.
Filing of
declaration
and particulars
to be
furnished.
Time and
manner of
payment.
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(3) Every order passed under sub-section (1), determining the amount payable under
this Act, shall be conclusive as to the matters stated therein and no matter covered by such
order shall be reopened in any other proceeding under the Income-tax Act or under any other
law for the time being in force or under any agreement, whether for protection of investment
or otherwise, entered into by India with any other country or territory outside India.
6. Subject to the provisions of section 5, the designated authority shall not institute
any proceeding in respect of an offence; or impose or levy any penalty; or charge any
interest under the Income-tax Act in respect of tax arrear.
7. Any amount paid in pursuance of a declaration made under section 4 shall not be
refundable under any circumstances.
8. Save as otherwise expressly provided in sub-section (3) of section 5 or section 6,
nothing contained in this Act shall be construed as conferring any benefit, concession or
immunity on the declarant in any proceedings other than those in relation to which the
declaration has been made.
9. The provisions of this Act shall not apply—
(a) in respect of tax arrear,—
(i) relating to an assessment year in respect of which an assessment has
been made under section 153A or section 153C of the Income-tax Act, if it relates
to any tax arrear;
(ii) relating to an assessment year in respect of which prosecution has
been instituted on or before the date of filing of declaration;
(iii) relating to any undisclosed income from a source located outside
India or undisclosed asset located outside India;
(iv) relating to an assessment or reassessment made on the basis of
information received under an agreement referred to in section 90 or section 90A
of the Income-tax Act, if it relates to any tax arrear;
(v) relating to an appeal before the Commissioner (Appeals) in respect of
which notice of enhancement under section 251 of the Income-tax Act has been
issued on or before the specified date;
(b) to any person in respect of whom an order of detention has been made under
the provisions of the Conservation of Foreign Exchange and Prevention of Smuggling
Activities Act, 1974 on or before the filing of declaration:
Provided that—
(i) such order of detention, being an order to which the provisions of
section 9 or section 12A of the said Act do not apply, has not been revoked on
the report of the Advisory Board under section 8 of the said Act or before the
receipt of the report of the Advisory Board; or
(ii) such order of detention, being an order to which the provisions of
section 9 of the said Act apply, has not been revoked before the expiry of the
time for, or on the basis of, the review under sub-section (3) of section 9, or on
the report of the Advisory Board under section 8, read with sub-section (2) of
section 9, of the said Act; or
(iii) such order of detention, being an order to which the provisions of
section 12A of the said Act apply, has not been revoked before the expiry of the
Immunity
from
initiation of
proceedings in
respect of
offence and
imposition of
penalty in
certain cases.
No benefit,
concession or
immunity to
declarant.
Act not to
apply in
certain cases.
No refund of
amount paid.
52 of 1974.
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time for, or on the basis of, the first review under sub-section (3) of that section,
or on the basis of the report of the Advisory Board under section 8, read with
sub-section (6) of section 12A, of the said Act; or
(iv) such order of detention has not been set aside by a court of competent
jurisdiction;
(c) to any person in respect of whom prosecution for any offence punishable
under the provisions of the Indian Penal Code, the Unlawful Activities (Prevention)
Act, 1967, the Narcotic Drugs and Psychotropic Substances Act, 1985, the Prevention
of Corruption Act, 1988, the Prevention of Money Laundering Act, 2002, the Prohibition
of Benami Property Transactions Act, 1988 or for the purpose of enforcement of any
civil liability has been instituted on or before the filing of the declaration or such
person has been convicted of any such offence punishable under any of those Acts;
(d) to any person notified under section 3 of the Special Court (Trial of Offences
Relating to Transactions in Securities) Act, 1992 on or before the filing of declaration.
10. (1) The Central Board of Direct Taxes may, from time to time, issue such directions
or orders to the income-tax authorities, as it may deem fit:
Provided that no direction or order shall be issued so as to require any designated
authority to dispose of a particular case in a particular manner.
(2) Without prejudice to the generality of the foregoing power, the said Board may, if it
considers necessary or expedient so to do, for the purpose of this Act, including collection
of revenue, issue from time to time, general or special orders in respect of any class of cases,
setting forth directions or instructions as to the guidelines, principles or procedures to be
followed by the authorities in any work relating to this Act, including collection of revenue
and issue such order, if the Board is of the opinion that it is necessary in the public interest
so to do.
11. (1) If any difficulty arises in giving effect to the provisions of this Act , the Central
Government may, by order, not inconsistent with the provisions of this Act , remove the
difficulty:
Provided that no such order shall be made after the expiry of a period of two years from
the date on which the provisions of this Act come into force.
(2) Every order made under sub-section (1) shall, as soon as may be after it is made, be
laid before each House of Parliament.
12. (1) The Central Government may, by notification in the Official Gazette, make rules
for carrying out the provisions of this Act.
(2) Without prejudice to the generality of the foregoing power, such rules may provide
for all or any of the following matters, namely:—
(a) the form in which a declaration may be made, and the manner of its verification
under section 4;
(b) the form and manner in which declarant shall furnish undertaking under
sub-section (5) of section 4;
(c) the form in which certificate shall be granted under sub-section (1) of section 5;
(d) the form in which payment shall be intimated under sub-section (2) of section 5;
(e) any other matter which is to be, or may be, prescribed, or in respect of which
provision is to be made, by rules.
(3) Every rule made by the Central Government under this Act shall be laid, as soon as
may be after it is made, before each House of Parliament, while it is in session, for a total
period of thirty days, which may be comprised in one session or in two or more successive
45 of 1860.
37 of 1967.
61 of 1985.
49 of 1988.
15 of 2003.
45 of 1988.
27 of 1992.
Power of
Board to issue
directions, etc.
Power to
remove
difficulties.
Power to
make rules.
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sessions, and if, before the expiry of the session immediately following the session or the
successive sessions aforesaid, both Houses agree in making any modification in the rule or
both Houses agree that the rule should not be made, the rule shall thereafter have effect only
in such modified form or be of no effect, as the case may be; so, however, that any such
modification or annulment shall be without prejudice to the validity of anything previously
done under that rule.
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STATEMENT OF OBJECTS AND REASONS
Over the years, the pendency of appeals filed by taxpayers as well as Government has
increased due to the fact that the number of appeals that are filed is much higher than the
number of appeals that are disposed. As a result, a huge amount of disputed tax arrears is
locked-up in these appeals. As on the 30th November, 2019, the amount of disputed direct tax
arrears is Rs. 9.32 lakh crores. Considering that the actual direct tax collection in the financial
year 2018-19 was Rs.11.37 lakh crores, the disputed tax arrears constitute nearly one year
direct tax collection.
2. Tax disputes consume copious amount of time, energy and resources both on the
part of the Government as well as taxpayers. Moreover, they also deprive the Government of
the timely collection of revenue. Therefore, there is an urgent need to provide for resolution
of pending tax disputes. This will not only benefit the Government by generating timely
revenue but also the taxpayers who will be able to deploy the time, energy and resources
saved by opting for such dispute resolution towards their business activities.
3. It is, therefore, proposed to introduce The Direct Tax Vivad se Vishwas Bill, 2020 for
dispute resolution related to direct taxes, which, inter alia, provides for the following,
namely:—
(a) The provisions of the Bill shall be applicable to appeals filed by taxpayers or
the Government, which are pending with the Commissioner (Appeals), Income tax
Appellate Tribunal, High Court or Supreme Court as on the 31st day of January, 2020
irrespective of whether demand in such cases is pending or has been paid;
(b) the pending appeal may be against disputed tax, interest or penalty in relation
to an assessment or reassessment order or against disputed interest, disputed fees
where there is no disputed tax. Further, the appeal may also be against the tax determined
on defaults in respect of tax deducted at source or tax collected at source;
(c) in appeals related to disputed tax, the declarant shall only pay the whole of
the disputed tax if the payment is made before the 31st day of March, 2020 and for the
payments made after the 31st day of March, 2020 but on or before the date notified by
Central Government, the amount payable shall be increased by 10 per cent. of disputed
tax;
(d) in appeals related to disputed penalty, disputed interest or disputed fee, the
amount payable by the declarant shall be 25 per cent. of the disputed penalty, disputed
interest or disputed fee, as the case may be, if the payment is made on or before the
31st day of March, 2020. If payment is made after the 31st day of March, 2020 but on or
before the date notified by Central Government, the amount payable shall be increased
to 30 per cent. of the disputed penalty, disputed interest or disputed fee, as the case
may be.
4. The proposed Bill shall come into force on the date it receives the assent of the
President and declaration may be made thereafter up to the date to be notified by the
Government.
NEW DELHI; NIRMALA SITHARAMAN.
The 1st February, 2020.
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PRESIDENT’S RECOMMENDATION UNDER ARTICLE 117 OF THE
CONSTITUTION OF INDIA
————
[Letter No. IT(A)/1/2020-TPL, dated 1.2.2020 from Smt. Nirmala Sitharaman,
Minister of Finance and Corporate Affairs to the Secretary General, Lok Sabha] The President, having been informed of the subject matter of the Direct Tax Vivad se
Vishwas Bill, 2020, recommends under clause (1) and (3) of article 117, read with clause (1) of
article 274 of the Constitution of India, the introduction of the Direct Tax Vivad se Vishwas
Bill, 2020, in Lok Sabha and also recommends to Lok Sabha the consideration of the Bill.
LOK SABHA
————
A
BILL
to provide for resolution of disputed tax and for matters connected therewith or incidental
thereto.
————
(Smt. Nirmala Sitharaman, Minister of Finance and Corporate Affairs)
MGIPMRND—5083LS(S3)—03.02.2020.