In relief for taxpayers, CBDT extends deadline to apply for settlement
In what comes as a major relief for taxpayers, the Central Board of Direct Taxes (CBDT) has extended the deadline for filing applications for tax settlement till September 30. This is applicable for the tax settlement applications that were to be filed for the period up to January 31 this year. The taxpayers will also have the option to withdraw their applications within the specified time and intimate the assessing officer regarding any such withdrawal. To dispose of these pending settlement applications, the CBDT has constituted the Interim Board for Settlement, an official statement explained.
Here's what the latest decision by the CBDT means, in five points:
- The CBDT took the decision in order to provide relief to the taxpayers who were eligible to file the settlement application as of January 31, 2021, but were unable to do so due to the cessation of the ITSC vide Finance Act, 2021. Therefore, these applicants shall have the option to file their settlements before the newly constituted Interim Board by September 30.
- However, the taxpayers who have already filed their respective tax settlement applications on or after February 1, 2021, in line with the directions of the high courts in several states shall not be required to do so again.
- Moreover, these applicants are also not eligible to avail the option of withdrawing their settlement applications as per provisions of Section 245M of the ITSC vide Finance Act.
- Thus, the taxpayers who can avail the benefits of the extended deadline need to fulfill these conditions – that they were eligible to file the tax settlement application before January 31, 2021, and that their relevant assessment proceedings were still pending as of the date of filing the application for settlement.
- Notably, the Finance Act, 2021, amended the provisions of the Income Tax Act, 1961, to provide that the Income Tax Settlement Commission (ITSC) shall cease to operate with effect from February 1, 2021.