Implementation of Direct Tax Dispute Resolution Scheme 2016

F .No.279/Misc./M-74/2016-ITJ
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
*******

New Delhi, the 19th July, 2016

To,
All Principal Chief Commissioners of Income Tax,
Principal Chief Commissioner of Income Tax (IT & TP),
Chief Commissioner of Income Tax (Exemptions)

Madam/ Sir,

Sub: Implementation of the Direct Tax Dispute Resolution Scheme 2016 reg.

The Direct Tax Dispute Resolution Scheme, 2016 was introduced with effect from 01.06.2016 to address the issue of pending litigation before CsIT (A). Tax payers stand to benefit by a timely disposal of their litigation, while the Department stands to reduce its administrative cost in disposing appeals and also to collect its due taxes. Therefore, it becomes expedient on the part of all officers to ensure that the Scheme is a resounding success.

2. On 29/2/2016, there were 73,402 appeals with tax effect above Rs. 10 lakhs and 1,85,858 appeals with tax effect below Rs. 10 lakhs pending before CsIT (Appeal). Thus, 2,59,260 appellants are eligible for the benefit of this Scheme. Unlike the Income Tax Disclosure Scheme, 2016, the target audience for this Scheme is limited to the above appellants and their representatives. This relatively smaller target group can easily be approached/ informed of the benefits of this Scheme by the Designated Authorities being the PC1T/ CIT.

3. The following steps have been taken in the matter:

i. A proforma has been issued to all the Pr. CCsIT for reporting.

ii. Dedicated corner containing the Scheme, Rules, Forms and FAQs relating to DRS Scheme is being created on the Department website. A Dashboard for daily reporting is being created on the website.

iii. Pr. MILT systems has been requested to forward a list of appeals pending before CIT (A) as on 29.02.2016, not yet disposed, mapped to each PCIT/CIT, containing the name of appellant, PAN, A.Y., category of appeal (tax disputed in appeal), address and e­mail/telephone number, where available.

4. Towards the successful implementation of the Scheme, Pr, CCsIT/ CCsIT may ensure that:-

i. All CsIT (A) peruse the grounds of appeal in each appeal pending before them and draw up a list of cases to be intimated to PCIT/ CIT which would be eligible for this Scheme. This may include cases where appeal has been filed against mandatory interest, mandatory fees, covered eases and any other case found fit in the opinion of the CIT (A) to be included in this Scheme.

ii. While paying special attention to the list received from the CIT (A), the PCIT/ CIT will reach out to each appellant, as per the list provided by Systems, and address a letter (specimen enclosed — Annexure ‘A’) for discussing the benefits of this Scheme as applicable to the appellant.

iii. PCIT/ CIT must interact with the local CA Associations and Bar Associations to explain the benefits of this Scheme.

iv. A ‘Standard Operating Procedure’ (Annexure ‘B’) is enclosed herewith for attention of all PCIT/ CIT.

5. This issues with the approval of Member (A&J).

Yours faithfully

(Sadhana Panwar)

DCIT ( OSD)(ITJ)

Tele: 011-26882637

Encl: As above

Copy to: Pr. DGIT (Systems)

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Annexure ‘A’

To,
_________________
_________________

Dear Taxpayer,

Sub: Direct Tax Dispute Resolution Schemes 2016 – reg.

The Direct Tax Dispute Resolution Scheme, 2016, (Scheme) was introduced with effect from 01.06.2016. The primary aim is to reduce tax payer grievance and uncertainty caused due to long pending litigation before the Commissioner Income Tax (Appeals). Whereas, litigation before CIT (A) is disposed chronologically and is dependent on tax effect, this Scheme provides an outer limit of 120 days for resolution of the pending matter. Practically, this period would be much shorter.

2. The Scheme provides for further relief in the following ways:

(i) Tax payable would include tax & interest till the date of assessment. Interest accrued thereafter would not form part of tax payable.

(ii) If the disputed tax is below Rs. 10 lakhs. penalty would stand waived on payment of tax & interest.

(iii) Where the disputed tax is more than Rs. 10 lakhs, penalty of 75% would stand waived on payment of tax, interest and 25% of penalty levied/ leviable.

(iv) In the case of a penalty appeal, the same can be resolved on payment of 25%, provided the tax and all interest due have been paid.

(v) Immunity from prosecution on the disputed tax would be available.

3. The Scheme, thus, provides a time bound process to resolve pending litigation without any uncertainty of the amount payable, which has been kept at the minimum. You may like to approach the undersigned to discuss the benefits of the scheme as applicable in your case. As per record, your appeal is pending with CIT (A) ________for the A.Y.________.

Yours faithfully

Pr. Commissioner of Income-tax

_________________

_________________

Annexure ‘B’

STANDARD OPERATING PROCEDURE FOR DIRECT TAX DISPUTE RESOLUTION SCHEME 2016

While introducing the Direct Tax Dispute Resolution Scheme, 2016, (Scheme) in his Budget speech, 2016, the Hon. Finance Minister observed that, “Litigation is a scourge for a tax friendly regime and creates an environment of distrust in addition to increasing the compliance cost of the tax payers and administrative cost for the Government. There are about 3 lakh tax cases pending with the V Appellate Authority with disputed amount being 5.5 lakh crores.” This scheme offers an opportunity to the tax payers to resolve pending litigation and to bring clarity and certainty in their tax matters. The Department stands to benefit with reduced administrative cost involved in handling appeals as well as timely collection of tax/ interest/ penalty clue.

2. The following Standard Operating Procedure is laid down for processing declarations received under this Scheme:

a. PCIT/ CIT/ CIT (Appeals) will provide all counsel, advice and assistance to the tax payers in the implementation of this Scheme. Any doubts which remain may be sent to ts.mapwal@nic.in

b. On receipt of a declaration under section 202 of the Scheme in Form 1 and Form 2 (where applicable), the same will be entered in the prescribed format by the Designated Authority.

c. The PCIT/ CIT will obtain (by hand- preferably on the same day) an endorsement from the CIT (A) concerned that the appeal in question was pending on 29.02.2016 and has not yet been disposed.

d. PCIT/ CIT will issue a Certificate in Form 3 determining the amount payable by the declarant. This Certificate will be expeditiously issued without waiting for the prescribed period of 60 days.

e. On receipt of details of payment in Form 4, the same will be entered in the Proforma prescribed and the POT/ CIT will pass the order under section 204(2) of the Scheme in Form 5 or Form 6, well within the prescribed period of 30 days. The date of order will be entered in the Proforma.

f. If any declaration could not be proceeded with, reasons for the same may be entered in the remarks column of the proforma and intimated to the C1T (A) concerned.

g. On expiry of the Scheme and processing of all declarations, the entire data would be transferred by the PCIT/ CIT to the Pr. CCIT/CCIT. The Pr. CC1T on consolidating the data of all PCIT/ CIT would proceed to analyse the same based on “Person” and “Residential Status” and submit a report thereon to Member (A&J) CBDT with a soft copy to cit.aj.cbdt@incometax.gov.in

- See more at: http://taxguru.in/income-tax/implementation-direct-tax-dispute-resolution-scheme-2016.html#sthash.f4sRmqYm.dpuf

Now apply PAN online using Aadhaar based e-Sign

New online PAN application facility has been launched for PAN applicants with an option of paperless submission of application using Aadhaar based e-Sign

Applicant can select any one of the following three options while filling online PAN application “ Physical acknowledgement, Digital Signature Certificate (DSC) or Aadhaar based e-Sign. In DSC option, an applicant needs to upload scanned images (as per defined parameters) of photo, signature and supporting documents while making application. In Aadhaar based e-Sign option, Aadhaar would be considered as supporting document and the photograph used in Aadhaar card would be used in PAN card as well.

In case Aadhaar number of Individual applicant is entered in the application form, then proof of Aadhaar along with supporting documents is to be submitted to NSDL e-Gov. If copy of Aadhaar is selected as Proof of Identity/Address/date of birth, then it is mandatory to enter Aadhaar number. In case applicant is MINOR, Aadhaar of minor should be mentioned in the application form. (i.e. Do not mention Representative Assessee’s Aadhaar number) Aadhaar number (if provided) would be authenticated using applicants details as mentioned in application form.

In case, AADHAAR is mentioned in the application (applicable for Individuals only), then the copy of AADHAAR allotment letter should also be enclosed along with the acknowledgement.

- See more at: http://taxguru.in/income-tax/apply-pan-online-aadhaar-based-esign.html#sthash.kIJuBphg.dpuf

Income Tax manual /Compulsory scrutiny criteria F.Y. 2016-2017

Instruction No. 4/2016
Government of India
Ministry of Finance
Department of Revenue (CBDT)
North-Block, New Delhi

Date: 13^th of July, 2016

To

All Pr. Chief-Commissioners of Income-tax/Chief-Commissioners of Income-tax

All Pr. Directors-General of Income-tax/Directors-General of Income-tax

Sir/Madam

Subject: Compulsory manual selection of cases for scrutiny during the Financial Year 2016-2017- regd:-

1. In supersession of earlier Instructions on the above subject, the Board hereby lays down the following procedure and criteria for manual selection of returns/cases for compulsory scrutiny during the financial-year 2016-2017:-

(i) Cases involving addition on a substantial and recurring question of law or fact in earlier assessment year(s), in excess of Rs. 25 lakhs in metro charges at Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata, Mumbai and Pune, while for other charges, quantum of such addition should exceed Rs. 10 lakhs (for transfer pricing cases, quantum of such addition should exceed Rs. 10 crore) and where:

a. such an addition in assessment has become final as no further appeal was/has been filed; or

b. such an addition has been confirmed at any stage of appellate process in favour of revenue and assessee has not filed further appeal; or

c. such an addition has been confirmed at 1^st appeal stage in favour of revenue or subsequently and further appeal of assessee is pending before any Authority in the appellate process.

(ii) All assessments pertaining to Survey under section 133A of the Act excluding those cases where books of accounts, documents etc. were not impounded and returned income (excluding any disclosure made during the Survey) is not less than returned income of preceding assessment year. However, where assessee retracts the disclosure made during the Survey, such cases will not be covered by this exclusion.

(iii) Assessments in search and seizure cases to be made under section(s) 158B, 158BC, 158BD, 153A & 153C read with section 143(3) of the Act and also for the returns filed for the assessment year relevant to the previous year in which authorization for search and seizure was executed u/s 132 or 132A of the Act.

(iv) Return filed in response to notice under section 148 of the Act.

(v) Cases where registration u/s 12AA of the IT Act has not been granted or has been cancelled by the CIT/DIT concerned, yet the assessee has been found to be claiming tax-exemption under section 11 of the Act. However, where such orders of the CIT/DIT have been reversed/set-aside in appellate proceedings, those cases will not be selected under this clause.

(vi) Cases of entities, being ‘scientific research association’ or ‘university, college or other institution’, having approval under section(s) 35(1)(ii)/35(1)(iii) of the Act.

(vii) Cases in respect of which specific and verifiable information pointing out tax-evasion is given by any Government Department/Authority. However, before selecting a case for scrutiny under this criterion, Assessing Officer shall be required to take prior administrative approval from the concerned jurisdictional Pr. CIT/Pr.DIT/CIT.

2. Computer Aided Scrutiny Selection (CASS): Cases are also being selected under CASS-2016 on the basis of broad based selection filters. List of such cases has been/is being separately intimated by the Pr.DGIT(Systems) to the jurisdictional authorities concerned.

3. As a taxpayer friendly measure, to reduce the departmental interface with the assessee and reduce the compliance burden of tax payers in scrutiny assessment proceedings, the scheme of Assessment through e-mail is being extended to all scrutiny cases including the cases selected under above parameters in seven cities of Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata and Mumbai. However, assessees in these seven cities can exercise the option of not being scrutinized under the e-mail based paperless assessment proceedings after informing the Assessing Officer concerned in writing in the beginning or subsequently during the course of assessment proceedings. Further, in cases which require submission of voluminous documents and it is not practicable to submit the scanned copies thereof through e-mail, in such instances; the Assessing Officer may decide to receive such documents in physical form after recording reasons for the same.

4. It is reiterated that the targets for completion of scrutiny assessments and strategy of framing quality assessments as contained in Central Action Plan document for Financial-Year 2016-2017 have to be complied with and it must be ensured that all scrutiny assessment orders including the cases selected under the manual criterion are completed through the AST system software only. It should be the endeavour of the Assessing Officers and his supervisory authorities to ensure that scrutiny assessment cases are disposed in a well planned manner without dragging the assessment proceedings till the last date of limitation. Further, Pr. CCsIT/CCIT(Central)/Pr. CCIT(International tax)/CCIT(Exemption)/DsGIT should evolve a suitable monitoring mechanism in their respective charges in order to ensure quality of assessments being framed during the financial year. In this regard, by 31^st January, 2017, such authorities shall send a report to the respective Zonal Member with a copy to Member (IT) containing details of at least 25 quality assessment orders from their respective charges. It may further be the endeavour that cases selected for publication in ‘Let us Share’ are picked up only from the quality assessments as reported.

5. These instructions may be brought to the notice of all concerned for necessary compliance.

6. Hindi version to follow.

(Rohit Garg)

Deputy-Secretary to the Government of India