Income Tax e-settlement scheme, 2021 – Overview

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TaxClue Team
TaxClue Team
Taxclue is an online news portal for reporting all news, articles, judgments, Circulars, orders, and notifications relating to various corporate and tax laws in India. We use the tagline ‘Simplifying Laws’. Our mission is to Simplify the Laws and make people aware of their rights and duties in relation to tax matters in order to equip them to participate in nation-building.

The Board of Direct Taxes (Income Tax Department) vide Notification No. 129/2021/ F.No. 370142/52/2021-TPL (Part IV) dated 01.11.2021, in exercise of its power under section 245D (11) & 245D (12) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) has issued a Scheme may be called the e-Settlement Scheme, 2021 to settle pending income-tax settlement applications transferred to a settlement commission.

Applicability & Scope:

  • It shall come into force on the date of its publication in the Official Gazette, i.e. 01.11.2021.
  • The scheme will be applicable to “pending applications in respect of which the applicant has not exercised the option under sub-section (1) of Section 245M of the Act and which has been allotted or transferred by Central Board of Direct Taxes to an interim board”.

To whom this relief has been given:

The relief was given to taxpayers who were eligible to file application as on January 31, 2021, but could not file the same due to cessation of Income Tax Settlement Commission as per the Finance Act 2021, and were hence permitted to submit the applications by September 30, 2021 before the interim board.

  • Key Highlights:

  1. Under the e-Settlement Scheme, 2021, an ‘interim board’ will decide on applications for settlement.
  2. The proceedings before the interim board shall not be open to the public.
  3. The e-Settlement scheme says that all communication between the Interim Board and tax payers will be exclusively in electronic mode.
  4. No person other than the applicant, their employee, and concerned officers of the interim board or the income-tax authority or the authorised representatives, without the permission of the interim board, can attend the proceedings even on videoconferencing or video telephony.
  5. CBDT shall establish suitable facilities for videoconferencing including telecommunication application software that supports video telephony at such locations as may be necessary.
  6. CBDT had said an assessee should have been eligible to file application for settlement on January 31, 2021 for the assessment years for which the application is sought to be filed and all relevant assessment proceedings of the assessee remain pending as on the date of filing the application for settlement.
  7. All pleadings before the Interim Board may, at the option of the applicant, be in Hindi or in English.
  8. The board said such applications, if found valid, will be deemed as “pending applications” and will not be allowed to be withdrawn.
  9. There is no need for the applicant or his or her representative to make any personal appearance before the Interim Board or before any Income-tax Authority or any ministerial staff posted with the Interim Board.
  10. The Interim Board, at its discretion, direct the publication of orders or portions containing the rulings of the Interim Board with such modifications as to names and other particulars therein, as it may deem fit

This digital process will bring more accountability, transparency and credibility. 

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