CBDT issues clarification on the expression ‘search case’ used in clarificatory FAQ No. 70 of the Direct Tax Vivad se Vishwas Act, 2020 vide Circular No. 4/2021 dated 23.03.2021.
Sections 10 and 11 of the Direct Tax Vivad se Vishwas Act, 2020 empower the Central Government/Central Board of Direct Taxes to issue directions or orders in the public interest or to remove difficulties.
Earlier, CBDT issued two sets of clarifications under the said sections in form of answers to frequently asked questions (FAQs) vide circular no. 9/2020 dated 22nd April 2020 (covering FAQ 1-55) and circular no. 21/2020 dated 4th December 2020 (covering FAQ no. 56-89).
In this context, CBDT on 4th December 2020 issued a Circular No. 21/2020 having a FAQ no. 70 in which eligibility for the search case under Vivad se Vishwas was clarified.
It was clarified that if the assessment order has been framed in the case of a taxpayer under section 143(3)/144 of the Income-tax Act based on the search executed in some other taxpayer's case, it is to be considered as a 'search case' under the Vivad se Vishwas Scheme.
FAQ No. 70 of the said Circular of December 2020 is reproduced below-
Q. No. 70. If the assessment order has been framed in the case of a taxpayer under section 143(3) / 144 of the Act based on the search executed in some other taxpayer's case, whether it is to be considered as a search case or non-search case under Vivad se Vishwas?
Answer: Such case is to be considered as a search case.
In this Circular, CBDT clarified that several representations have been received seeking further clarity with regard to the classification of a case as a 'search case' for the purposes of Vivad se Vishwas.
The matter is examined. In order to remove any uncertainty in this regard, and in the exercise of powers under section 10 and 1 of Vivad se Vishwas, it is clarified that a 'search case' 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 or section 153C or section 158BC or section 158BD of the Income-tax Act on the basis of search initiated under section 132, or requisition made under section 132A of the Income-tax Act.
The FAQ no. 70 of circular 21/12020 stands modified to this extent.
Read the full text of Circular No. 4/2021 dated 23.03.2021 on Clarification of ‘Search case’ under Vivad Se Vishwas Scheme
Circular No. 04/2021
F. No. IT(A)/1/2020-TPL
Government of India
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 reduce pending income tax litigation, generate timely revenue for the Government and benefit taxpayers by providing them peace of mind, certainty and savings on account of time and resources that would otherwise be spent on the long-drawn and vexatious litigation process, the Direct Tax Vivad se Vishwas Act, 2020 (hereinafter referred to as 'Vivad se Vishwas') was enacted on 17th March, 2020.
2. Sections 10 and 11 of Vivad se Vishwas empower the Central Government/ Central Board of Direct Taxes to issue directions or orders in public interest or to remove difficulties. In order to facilitate the taxpayers, clarifications under the said sections in form of answers to frequently asked questions (FAQs) were issued vide circular no. 9/2020 dated 22nd April, 2020 (covering FAQ 1-55) and circular no. 21/2020 dated 4th December, 2020 (covering FAQ no. 56-89).
3. FAQ no.70 of circular 21/2020 clarified eligibility for search case under Vivad se Vishwas. It was clarified that if the assessment order has been framed in the case of a taxpayer under section 143(3)/144 of the Income-tax Act based on thc search executed in some other taxpayer's case, it is to be considered as a 'search case' under Vivad se Vishwas.
4. Several representations have been received seeking further clarity with regard to the classification of a case as a 'search case' for the purposes of Vivad se Vishwas. The matter has been examined. In order to remove any uncertainty in this regard, and in exercise of powers under section 10 and 11 of Vivad se Vishwas, it is hereby clarified that a 'search case' 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 or section 153C or section 158BC or section 158BD of the Income-tax Act on the basis of search initiated under section 132, or requisition made under section 132A of the Income-tax Act. The FAQ no. 70 of circular 21/2020 stands modified to this extent.
(Shefali Singh)
Under Secretary to the Govt. of India
Download Copy of CBDT Circular No. 4/2021 dated 23.03.2021 on Clarification of ‘Search case’ under Vivad Se Vishwas Scheme in pdf format.
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