A Bill to provide for resolution of disputed tax and for matters connected therewith or

incidental thereto.

BE it enacted by Parliament in the Seventy-first Year of the Republic of India as

follows:—

1. This Act may be called the Direct Tax Vivad se Vishwas Act, 2020.

2. (1) In this Act, unless the context otherwise requires,—

(a) "appellant" means the person or the income-tax authority or both who has

filed appeal before the appellate forum and such appeal is pending on the specified

date;

(b) "appellate forum" means the Supreme Court or the High Court or the Income

Tax Appellate Tribunal or the Commissioner (Appeals);

Short title.

Definitions.

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EXTRAORDINARY

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PART II — Section 2

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Separate paging is given to this Part in order that it may be filed as a separate compilation.

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REGISTERED NO. DL—(N)04/0007/2003—20

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LOK SABHA

————

The following Bill was introduced in Lok Sabha on 05th February, 2020:—

BILL NO. 29 OF 2020

सी.जी.-डी.एल.-अ.-24022020-216366

CG-DL-E-24022020-216366

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

(d) "declaration" means the declaration filed under section 4;

(e) "designated authority" means an officer not below the rank of a Commissioner

of Income-tax notified by the Principal Chief Commissioner for the purposes of this

Act;

(f) "disputed fee" means the fee determined under the provisions of the

Income-tax Act, 1961 in respect of which appeal has been filed by the appellant;

(g) "disputed income", in relation to an assessment year, means the whole or

so much of the total income as is relatable to the disputed tax;

(h) "disputed interest" means the interest determined in any case under the

provisions of the Income-tax Act, 1961, where—

(i) such interest is not charged or chargeable on disputed tax;

(ii) an appeal has been filed by the appellant in respect of such interest;

(i) "disputed penalty" means the penalty determined in any case under the

provisions of the Income-tax Act, 1961, where—

(i) such penalty is not levied or leviable in respect of disputed income or

disputed tax, as the case may be;

(ii) an appeal has been filed by the appellant in respect of such penalty;

( j) "disputed tax", in relation to an assessment year, means—

(i) tax determined under the Income-tax Act, 1961 in accordance with

the following formula—

(A – B) + (C – D) where,

A = an amount of tax on the total income assessed as per the provisions

of the Income-tax Act, 1961other than the provisions contained in section

115JB or section 115JC of the Income-tax Act, 1961(herein after called general

provisions);

B = an amount of tax that would have been chargeable had the total income

assessed as per the general provisions been reduced by the amount of income

in respect of which appeal has been filed by the appellant;

C = an amount of tax on the total income assessed as per the provisions

contained in section 115JB or section 115JC of the Income-tax Act, 1961;

D = an amount of tax that would have been chargeable had the total income

assessed as per the provisions contained in section 115JB or section 115JC of

the Income-tax Act, 1961 been reduced by the amount of income in respect of

which appeal has been filed by the appellant:

Provided that where the amount of income in respect of which appeal

has been filed by the appellant is considered under the provisions contained in

section 115JB or section 115JC of the Income-tax Act, 1961 and under general

provisions, such amount shall not be reduced from total income assessed while

determining the amount under item D:

Provided further that in a case where the provisions contained in section 115JB

or section 115JC of the Income-taxAct, 1961 are not applicable, the item

(C – D) in the formula shall be ignored:

Provided also that in a case where the amount of income, in respect of

which appeal has been filed by the appellant, has the effect of reducing the loss

declared in the return or converting that loss into income, the amount of disputed

tax shall be determined in accordance with the formula specified in sub-clause

(i) with the modification that the amount to be determined for item (A - B) in

that formula shall be the amount of tax that would have been chargeable on the

income in respect of which appeal has been filed by the appellant had such

income been the total income;

43 of 1961.

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

(ii) tax determined under section 200A or section 201 or

sub-section (6A) of section 206C or section 206CB of the Income-tax

Act, 1961 in respect of which appeal has been filed by the appellant;

(k) "Income-tax Act" means the Income-tax Act, 1961;

(l) "last date" means such date as may be notified by the Central Government in

the Official Gazette;

(m) "prescribed" means prescribed by rules made under this Act;

(n) "specified date" means the 31st day of January, 2020;

(o) "tax arrear" means,—

(i) the aggregate amount of disputed tax, interest chargeable or charged

on such disputed tax, and penalty leviable or levied on such disputed tax; or

(ii) disputed interest; or

(iii) disputed penalty; or

(iv) disputed fee,

as determined under the provisions of the Income-tax Act;

(2) The words and expressions used herein and not defined but defined in the Income-tax

Act shall have the meanings respectively assigned to them in that Act.

3. Subject to the provisions of this Act, where a declarant files under the provisions

of this Act on or before the last date, a declaration to the designated authority in accordance

with the provisions of section 4 in respect of tax arrear, then, notwithstanding anything

contained in the Income-tax Act or any other law for the time being in force, the amount

payable by the declarant under this Act shall be as under, namely:—

Sl.

Nature of tax arrear

Amount payable

No.

under this Act on

under this Act on or after

or before the

the 1st day of April, 2020

31st day of

but on or before the last date.

March, 2020.

(a)

where the tax arrear is

amount of the

the aggregate of the amount

the aggregate amount

disputed tax.

of disputed tax and ten per

of disputed tax, interest

cent. of disputed tax:

chargeable or charged

on such disputed tax

provided that where the ten per

and penalty leviable or

cent. of disputed tax exceeds

levied on such disputed

the aggregate amount of

tax.

interest chargeable or charged

on such disputed tax and

penalty leviable or levied on

such disputed tax, the excess

shall be ignored for the purpose

of computation of amount

payable under this Act.

(b)

where the tax arrear

twenty-five per cent. thirty per cent. of disputed

relates to disputed

of disputed interest

interest or disputed penalty or

interest or disputed

or disputed penalty

disputed fee.

penalty or disputed fee.

or disputed fee.

43 of 1961.

Amount

payable by

declarant.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

4. (1) The declaration referred to in section 3 shall be filed by the declarant before the

designated authority in such form and verified in such manner as may be prescribed.

(2) Upon the filing the declaration, any appeal pending before the Income Tax Appellate

Tribunal or Commissioner (Appeals), in respect of the disputed income or disputed interest

or disputed penalty or disputed fee and tax arrear shall be deemed to have been withdrawn

from the date on which certificate under sub-section (1) of section 5 is issued by the designated

authority.

(3) Where the declarant has filed any appeal before the appellate forum or any writ

petition before the High Court or the Supreme Court against any order in respect of tax

arrear, he shall withdraw such appeal or writ petition with the leave of the Court wherever

required and furnish proof of such withdrawal alongwith the declaration referred to in

sub-section (1).

(4) Where the declarant has initiated any proceeding for arbitration, conciliation or

mediation, or has given any notice thereof under any law for the time being in force or

under any agreement entered into by India with any other country or territory outside India

whether for protection of investment or otherwise, he shall withdraw the claim, if any, in

such proceedings or notice prior to making the declaration and furnish proof thereof

alongwith the declaration referred to in sub-section (1).

(5) Without prejudice to the provisions of sub-sections (2), (3) and (4), the

declarant shall furnish an undertaking waiving his right, whether direct or indirect, to

seek or pursue any remedy or any claim in relation to the tax arrear which may otherwise

be available to him under any law for the time being in force, in equity, under statute or

under any agreement entered into by India with any country or territory outside India

whether for protection of investment or otherwise and the undertaking shall be made in

such form and manner as may be prescribed.

(6) The declaration under sub-section (1) shall be presumed never to have been made

if,—

(a) any material particular furnished in the declaration is found to be false at

any stage;

(b) the declarant violates any of the conditions referred to in this Act;

undertaking given by him under sub-section (5),

and in such cases, all the proceedings and claims which were withdrawn under section 4

and all the consequences under the Income-tax Act against the declarant shall be deemed

to have been revived.

(7) No appellate forum or arbitrator, conciliator or mediator shall proceed to decide

any issue relating to the tax arrear mentioned in the declaration in respect of which an

order has been made under sub-section (1) of section 5 by the designated authority or the

payment of sum determined under that section.

5. (1) The designated authority shall, within a period of fifteen days from the date of

receipt of the declaration, by order, determine the amount payable by the declarant in

accordance with the provisions of this Act and grant a certificate to the declarant containing

particulars of the tax arrear and the amount payable after such determination, in such form

as may be prescribed.

(2) The declarant shall pay the amount determined under sub-section (1) within fifteen

days of the date of receipt of the certificate and intimate the details of such payment to the

designated authority in the prescribed form and thereupon the designated authority shall

pass an order stating that the declarant has paid the amount.

Filing of

declaration and

particulars to be

furnished.

Time and

manner of

payment.

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

(3) Every order passed under sub-section (1), determining the amount payable under

this Act, shall be conclusive as to the matters stated therein and no matter covered by such

order shall be reopened in any other proceeding under the Income-tax Act or under any other

law for the time being in force or under any agreement, whether for protection of investment

or otherwise, entered into by India with any other country or territory outside India.

6. Subject to the provisions of section 5, the designated authority shall not institute

any proceeding in respect of an offence; or impose or levy any penalty; or charge any

interest under the Income-tax Act in respect of tax arrear.

7. Any amount paid in pursuance of a declaration made under section 4 shall not be

refundable under any circumstances.

8. Save as otherwise expressly provided in sub-section (3) of section 5 or section 6,

nothing contained in this Act shall be construed as conferring any benefit, concession or

immunity on the declarant in any proceedings other than those in relation to which the

declaration has been made.

9. The provisions of this Act shall not apply—

(a) in respect of tax arrear,—

(i) relating to an assessment year in respect of which an assessment has

been made under section 153A or section 153C of the Income-tax Act, if it relates

to any tax arrear;

(ii) relating to an assessment year in respect of which prosecution has

been instituted on or before the date of filing of declaration;

(iii) relating to any undisclosed income from a source located outside

India or undisclosed asset located outside India;

(iv) relating to an assessment or reassessment made on the basis of

information received under an agreement referred to in section 90 or section 90A

of the Income-tax Act, if it relates to any tax arrear;

(v) relating to an appeal before the Commissioner (Appeals) in respect of

which notice of enhancement under section 251 of the Income-tax Act has been

issued on or before the specified date;

(b) to any person in respect of whom an order of detention has been made under

the provisions of the Conservation of Foreign Exchange and Prevention of Smuggling

Activities Act, 1974 on or before the filing of declaration:

Provided that—

(i) such order of detention, being an order to which the provisions of

section 9 or section 12A of the said Act do not apply, has not been revoked on

the report of the Advisory Board under section 8 of the said Act or before the

receipt of the report of the Advisory Board; or

(ii) such order of detention, being an order to which the provisions of

section 9 of the said Act apply, has not been revoked before the expiry of the

time for, or on the basis of, the review under sub-section (3) of section 9, or on

the report of the Advisory Board under section 8, read with sub-section (2) of

section 9, of the said Act; or

(iii) such order of detention, being an order to which the provisions of

section 12A of the said Act apply, has not been revoked before the expiry of the

Immunity

from

initiation of

proceedings in

respect of

offence and

imposition of

penalty in

certain cases.

No benefit,

concession or

immunity to

declarant.

Act not to

apply in

certain cases.

No refund of

amount paid.

52 of 1974.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

time for, or on the basis of, the first review under sub-section (3) of that section,

or on the basis of the report of the Advisory Board under section 8, read with

sub-section (6) of section 12A, of the said Act; or

(iv) such order of detention has not been set aside by a court of competent

jurisdiction;

under the provisions of the Indian Penal Code, the Unlawful Activities (Prevention)

Act, 1967, the Narcotic Drugs and Psychotropic Substances Act, 1985, the Prevention

of Corruption Act, 1988, the Prevention of Money Laundering Act, 2002, the Prohibition

of Benami Property Transactions Act, 1988 or for the purpose of enforcement of any

civil liability has been instituted on or before the filing of the declaration or such

person has been convicted of any such offence punishable under any of those Acts;

(d) to any person notified under section 3 of the Special Court (Trial of Offences

Relating to Transactions in Securities) Act, 1992 on or before the filing of declaration.

10. (1) The Central Board of Direct Taxes may, from time to time, issue such directions

or orders to the income-tax authorities, as it may deem fit:

Provided that no direction or order shall be issued so as to require any designated

authority to dispose of a particular case in a particular manner.

(2) Without prejudice to the generality of the foregoing power, the said Board may, if it

considers necessary or expedient so to do, for the purpose of this Act, including collection

of revenue, issue from time to time, general or special orders in respect of any class of cases,

setting forth directions or instructions as to the guidelines, principles or procedures to be

followed by the authorities in any work relating to this Act, including collection of revenue

and issue such order, if the Board is of the opinion that it is necessary in the public interest

so to do.

11. (1) If any difficulty arises in giving effect to the provisions of this Act, the Central

Government may, by order, not inconsistent with the provisions of this Act, remove the

difficulty:

Provided that no such order shall be made after the expiry of a period of two years from

the date on which the provisions of this Act come into force.

(2) Every order made under sub-section (1) shall, as soon as may be after it is made, be

laid before each House of Parliament.

12. (1) The Central Government may, by notification in the Official Gazette, make rules

for carrying out the provisions of this Act.

(2) Without prejudice to the generality of the foregoing power, such rules may provide

for all or any of the following matters, namely:—

(a) the form in which a declaration may be made, and the manner of its verification

under section 4;

(b) the form and manner in which declarant shall furnish undertaking under

sub-section (5) of section 4;

(d) the form in which payment shall be intimated under sub-section (2) of section 5;

(e) any other matter which is to be, or may be, prescribed, or in respect of which

provision is to be made, by rules.

(3) Every rule made by the Central Government under this Act shall be laid, as soon as

may be after it is made, before each House of Parliament, while it is in session, for a total

period of thirty days, which may be comprised in one session or in two or more successive

45 of 1860.

37 of 1967.

61 of 1985.

49 of 1988.

15 of 2003.

45 of 1988.

27 of 1992.

Power of

Board to issue

directions, etc.

Power to

remove

difficulties.

Power to

make rules.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

STATEMENT OF OBJECTS AND REASONS

Over the years, the pendency of appeals filed by taxpayers as well as Government has

increased due to the fact that the number of appeals that are filed is much higher than the

number of appeals that are disposed. As a result, a huge amount of disputed tax arrears is

locked-up in these appeals. As on the 30th November, 2019, the amount of disputed direct tax

arrears is Rs. 9.32 lakh crores. Considering that the actual direct tax collection in the financial

year 2018-19 was Rs.11.37 lakh crores, the disputed tax arrears constitute nearly one year

direct tax collection.

2. Tax disputes consume copious amount of time, energy and resources both on the

part of the Government as well as taxpayers. Moreover, they also deprive the Government of

the timely collection of revenue. Therefore, there is an urgent need to provide for resolution

of pending tax disputes. This will not only benefit the Government by generating timely

revenue but also the taxpayers who will be able to deploy the time, energy and resources

saved by opting for such dispute resolution towards their business activities.

3. It is, therefore, proposed to introduce the Direct Tax Vivad se Vishwas Bill, 2020

for dispute resolution related to direct taxes, which, inter alia, provides for the following,

namely:—

(a) the provisions of the Bill shall be applicable to appeals filed by taxpayers

or the Government, which are pending with the Commissioner (Appeals), Income tax

Appellate Tribunal, High Court or Supreme Court as on the 31st day of January, 2020

irrespective of whether demand in such cases is pending or has been paid;

(b) the pending appeal may be against disputed tax, interest or penalty in relation

to an assessment or reassessment order or against disputed interest, disputed fees

where there is no disputed tax. Further, the appeal may also be against the tax determined

on defaults in respect of tax deducted at source or tax collected at source;

the disputed tax if the payment is made before the 31st day of March, 2020 and for the

payments made after the 31st day of March, 2020 but on or before the date notified by

Central Government, the amount payable shall be increased by 10 per cent. of disputed

tax;

(d) in appeals related to disputed penalty, disputed interest or disputed fee, the

amount payable by the declarant shall be 25 per cent. of the disputed penalty, disputed

interest or disputed fee, as the case may be, if the payment is made on or before the

31st day of March, 2020. If payment is made after the 31st day of March, 2020 but on or

before the date notified by Central Government, the amount payable shall be increased

to 30 per cent. of the disputed penalty, disputed interest or disputed fee, as the case

may be.

4. The proposed Bill shall come into force on the date it receives the assent of the

President and declaration may be made thereafter up to the date to be notified by the

Government.

NEW DELHI;

NIRMALA SITHARAMAN.

The 1st February, 2020.

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

PRESIDENT’S RECOMMENDATION UNDER ARTICLE 117 OF THE

CONSTITUTION OF INDIA

————

[Letter No. IT(A)/1/2020-TPL, dated 1.2.2020 from Smt. Nirmala Sitharaman,

Minister of Finance and Corporate Affairs to the Secretary General, Lok Sabha]

The President, having been informed of the subject matter of the Direct Tax Vivad se

Vishwas Bill, 2020, recommends under clause (1) and (3) of article 117, read with clause (1) of

article 274 of the Constitution of India, the introduction of the Direct Tax Vivad se Vishwas

Bill, 2020, in Lok Sabha and also recommends to Lok Sabha the consideration of the Bill.

——————

MEMORANDUM REGARDING DELEGATED LEGISLATION THE DIRECT TAX

VIVAD SE VISHWAS BILL, 2020

Clause 12 of the Bill empowers the Central Government to make rules for carrying out

the provisions of the Bill. The matters in respect of which rules may be made are—(a) the

form in which a declaration may be made, and the manner of its verification under section 4;

(b) the form and manner in which declarant shall furnish undertaking under sub-section (5) of

section 4; (c) the form in which certificate shall be granted under sub-section (1) of section 5;

(d) the form in which payment shall be intimated under sub-section (2) of section 5; (e) any

other matter which is to be, or may be, prescribed, or in respect of which provision is to be

made, by rules.

It also provides that every rule made by the Central Government under the Act shall be

laid, as soon as may be after it is made, before each House of Parliament.

The matters in respect of which rules may be made under the aforesaid provisions are

matters of procedure and administrative details and it is not practical to provide for them in

the Bill itself. The delegation of legislative power is, therefore, of a normal character.

UPLOADED BY THE MANAGER, GOVERNMENT OF INDIA PRESS, MINTO ROAD, NEW DELHI–110002

AND PUBLISHED BY THE CONTROLLER OF PUBLICATIONS, DELHI–110054.

MGIPMRND—5177GI—24-02-2020.

—————

SNEHLATA SHRIVASTAVA

Secretary General

BANSHI

DHAR

DUBEY

Digitally signed by

BANSHI DHAR

DUBEY

Date: 2020.02.24

21:10:55 +05'30'