CBDT Modifies and Issues New FAQs on DTVSV Scheme

Circular No. 19 of 2024, dated 16-12-2024

The Finance (No. 2) Act 2024 reintroduced the Direct Tax Vivad Se Vishwas Scheme 2024 to expedite the resolution of income-tax disputes, specifically targeting the large volume of pending appeals. The scheme aims to streamline dispute settlements for appeals pending as of July 22, 2024.

To facilitate the various queries raised by the stakeholders following the enactment of the Scheme, the Central Board of Direct Taxes (CBDT) issued Guidance Note 1/2024, dated 15-10-2024, in the form of Frequently Asked Questions (FAQs). These FAQs are designed to provide clarity and assist taxpayers in better understanding the scheme’s provisions.

Now, the CBDT has issued another Guidance Note 2/2024 and modified a FAQ on the eligibility cases and various FAQs on Set-aside appeal, prosecution, Computation of Amount payable, Disputed Penalty, APA/MAP Cases, Taxes paid before filing declaration, TDS-related queries were incorporated.

A few key clarifications issued by the CBDT are as follows:

(1) The benefit of the Scheme is available if an appeal is disposed of before filing the declaration

The earlier guidance note mentioned that if the taxpayer is eligible to apply for the DTVSV Scheme 2024, his appeal is pending as of 22.7.2024. But subsequently, before the taxpayer could file a declaration, his appeal was disposed of on merits or dismissed as withdrawn for the purposes of the Scheme; such cases will not be eligible.

However, the revised guidance note clarified that even in these cases, the assessee is still eligible to avail the benefit of the Vivad Se Vishwas Scheme.

(2) Appeal filed against Intimation under section 143(1) is eligible under the scheme

The board has clarified that any appeal filed against intimation u/s 143(1) of the Act and pending as of 22nd July 2024 is eligible for settlement under the Scheme.

(3) Set aside appeals

Guidance Note 1/2024 clarified that set-aside matters to the AO, whether fully set-aside or partially set-aside, are not covered under the Scheme. Further, this Guidance Note clarifies that where an appeal has been set aside entirely to ITA TICIT(A)/DRP, such appeals will be eligible for settlement.

(4) Scheme not eligible for disputes pertaining to non-APA/MAP adjustments

The Scheme envisages settling disputes in full. The Scheme does not envisage settling issues in part. Therefore, whatever issues are in a pending appeal are to be settled in full, whether they pertain to APA/MAP adjustments or otherwise.

(5) If the scheme is availed for transfer pricing adjustments, section 92CE provisions are applicable separately

The board has clarified that secondary adjustment under section 92CE will be applicable if the taxpayer avails DTVSV Scheme, 2024 for Transfer Pricing adjustment. However, the provision of secondary adjustment as contained in section 92CE of the Act is not applicable for primary adjustment made in respect of an assessment year commencing on or before the 1st day of April 2016.

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