• The Direct Tax Vivad se Vishwas Act, 2020 was enacted on March 17, 2020.
• Applicable where an appeal or petition was pending as of January 31, 2020, before any appellate forum.
• The scheme was also applicable to the following disputes as of January 31, 2020:
  • The time limit for filing an appeal had not expired;
  • Matters pending before the Dispute Resolution Panel (DRP) or where DRP directions had been passed but the final assessment order was awaited;
  • Revision petitions pending before the Commissioner of Income Tax (CIT);
  • TDS-related dispute resolution;
  • Search cases where disputed tax was less than INR 50 million.
• Matters involving arbitration, conciliation, or mediation were also eligible (based on international agreements).
• There were no provisions in the scheme to settle part of a pending dispute in relation to an appeal/petition.

• Order passed by the designated authority to be conclusive as to matters mentioned therein and such matters cannot be reopened in any other proceedings.
• No institution of any proceedings in respect of an offence, penalty or interest.
• Appellate forums/arbitrator, conciliator, or mediator not to decide the issue in respect of cases where an order is passed by the designated authority.
• Claim of conceding tax position on settling the dispute will not hold good. Thus, the same cannot be considered as a precedent of giving up a tax position.
• Any amount paid in pursuance of a declaration shall not be refundable – Except where before making the declaration the taxpayer had paid in excess of the amount to be paid under dispute, but the refund was to be paid without interest.

• The new scheme is similar to the earlier scheme under which payment could have been made until October 2021
• All pending litigation as on July 22, 2024, is eligible to opt for this scheme.
• There is a lower cash outflow if disputes are settled prior to December 31, 2024.
• Provides option to the taxpayer to discharge disputed tax / interest / penalty at below prescribed rates:

• For the appeals filed by the department, the amount payable will be 50% of the amount in the table above.
• For appeals or objections filed by the taxpayer before the Income Tax Appellate Tribunal (ITAT) or CIT or DRP, if the taxpayer has already received a favorable decision from higher forum, the amount payable will be 50% of the amount in the table above.
• One of the differences between the Old Scheme and the New Scheme appears to be that under the Old Scheme appeals not filed by January 31, 2020 but the due date for which had not expired was covered as well; however, the New Scheme appears to cover only pending appeals as on July 22, 2024.
• Also, the New Scheme is not applicable in certain circumstances where the tax arrears arise out of circumstances such as search, prosecution, undisclosed income/ asset from a source/ located outside India, assessment/ reassessment made on the basis of exchange of information under Double Taxation Avoidance Agreements (under section 90/ section 90A of the Income-tax Act, 1961) and also in respect of taxpayers on whom proceedings are being undertaken under Benami Property Transactions Act, 1988, Prevention of Corruption Act, 1988, Prevention of Money Laundering Act, 2002.
• Similar to the Old Scheme which had provided with Frequently Asked Questions to address queries of taxpayers, guidance could be released by the Central Board of Direct Taxes under the current scheme as well. However, the FAQs provided under the Old Scheme could also provide indicative responses to taxpayers.

KNAV could assist taxpayers by evaluating eligibility for the scheme, review the position involved in respect of the tax litigated matter, file declarations and ensuring compliance with scheme requirements.

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