RSM India

White Paper "The Direct Tax Dispute Resolution Scheme, 2016- An opportunity to resolve pending litigation"

Rising tax dispute has been a matter of serious concern for taxpayers. The Direct Tax Dispute Resolution Scheme (‘the Scheme’) which has  been introduced as a part of the Finance Act, 2016 provides an opportunity to taxpayers to settle their pending tax disputes at the level of the First Appellate Authority i.e. the Commissioner of Income Tax (Appeal) / Commissioner of Wealth-tax (Appeals). The scheme also provides a one-time opportunity for dispute resolution for past cases ongoing under the retrospective amendment.  This scheme has already come into effect on 1 June 2016 and will end on 31 December 2016. Thus, a taxpayer has time till 31 December to settle his pending litigation.

Under this scheme, a taxpayer who has an appeal pending as on 29th February 2016 before the Commissioner (Appeals) can settle his case by paying the disputed tax and interest up to the date of assessment. No penalty in respect of Income-tax cases with disputed tax up to  Rs.10 lakh will be levied. Cases with disputed tax exceeding Rs.10 lakhs will be subjected to only 25% of the minimum of the imposable penalty. Any pending appeal against a penalty order can also be settled by paying 25% of the minimum of the imposable penalty.

Our White Paper “The Direct Tax Dispute Resolution Scheme, 2016- An opportunity to resolve pending litigation” captures the legal provisions of the scheme.

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