The Central Board of Direct Taxes (CBDT) has commanded the income tax department to issue an order asking tax collectors to allow all applications for pending tax settlements until 30th September 2021.
In a decree published on 28th September, CBDT directed the commissioner income tax to enable pending applications to settle the cases. The taxpayers can now file their applications before the interim board.
What was directed in the amendment of ITSC
The Income Tax Act 1961 was amended through a modification in the Finance Act via the Union Budget of 2021-22.
This resulted in the ceasing of operations for the Income Tax Settlement Commission (ITSC) from the first February of this year.
Moreover, it was directed that all pending applications could not get filed on or after February 1, 2021.
Thus, to settle those pending applications, as of January 31, 2021 government decided to set up the Interim Board for Settlement (IBS).
Why did the government extend the date
Following this, the Finance Ministry received countless applications from taxpayers from across the country, especially those at advanced stages of filing their application for settlement but could not proceed because of the cessation of ITSC as of February 1, 2021.
Hence, to provide relief to the eligible taxpayers, as of January 31, 2021, the income tax department decided that applications for settlements can be filed by these remaining taxpayers by September 30, 2021, before the interim board.
The relief given to these people got based on two conditions. Firstly, they should be qualified to apply for settlement of their dues on January 1st, 2021.
Secondly, the entire necessary proceedings are pending as of the date of filing for the same.
A direct word from the Central Board of Direct Taxes
The order issued by the Central Board of Direct Taxes (CBDT) on 28th September 2021 said that the board was trying to avoid genuine hardships for the assessees.
Therefore, it authorized the Commissioner of Income Tax, who had been appointed Secretary to the Settlement Commission before February 1, 2021, to permit an application for settlement on behalf of the Interim Board filed after January 31, 2021.
It commands the income tax department to treat such applications as valid and process them as pending applications for settlement of cases.
