CBDT Allows Taxpayers To File Application For Settlement By 30th September, 2021

As of 01.02.2021, it was reported that a number of taxpayers were in the midst of submitting their settlement application with the ITSC. Furthermore, some taxpayers have addressed High Courts to urge that their settlement requests should be granted. In some situations, the Hon'ble High Courts have granted temporary relief and instructed that settlement applications shall be accepted even after February 1, 2021. To provide relief to taxpayers who were eligible to file an application as of 31.01.2021, but were unable to do so due to the termination of the ITSC under the Finance Act of 2021, the department of Central Board of Direct Taxes (CBDT) has now decided that that applications for settlement can be submitted by taxpayers before the Interim Board by September 30, 2021 if the following conditions are met.

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.

"Such applications, subject to their validity, shall be deemed to be "pending applications" under clause (eb) of section 245A of the Act and shall be disposed of by the Interim Board as per the provisions of the Act," CBDT said.

CBDT has also clarified that "taxpayers who have filed such applications shall not have the option to withdraw such applications as per the provisions of section 245M of the Act. Further, the taxpayers who have already filed application for settlement on or after 01.02.2021 as per the direction of the various High Courts and who are otherwise eligible to file such application, as per para 3 above, on the date of filing of the said application shall not be required to file such application again."

The Government has modified the Income-tax Rules, 1962, dated September 6, 2021, to make it easier to authenticate electronic records in faceless assessment processes. According to the revised Rules, electronic records filed through a taxpayer's registered account on the Income-tax Department's portal shall be considered to have been authenticated by the taxpayer using an electronic verification code (EVC). To know more, please click here.