Settlement Commission of Income Tax Scrappage is Not Feasible: IT Experts

The practitioners of the income tax have urged that the budget proposal to scrap the income tax Settlement Commission (ITSC) is providing the one-time life opportunity to the worried assessee.

Despite the council expecting the move will ease the tax administration, ease in compliance, and cut the litigation, tax experts availed any noncompliance consisting of the imposition of penalty. Supporting their issues the Finance Bill 2021’s proposal to not continue the ITSC Feb 1, 2021, the Kolkata chapter of Income Tax Bar Association (ITBA) has directed to FM Nirmala Sitharaman, in written said applicants with due cases for disposal at multiple levels of the settlement proceedings have been ‘left in the lurch’.

The proposal the letter provided on the date 9th Feb 2021 states injustice to the petitioner where the cases are due prior to the ITSC as of 31/1/2021. In article 14 the discrimination is not permissible towards the petitioner. The taxpayer who furnishes the application to the commission to resolve the issue through filing the taxes and interest and in return obtaining the relief from the penalty and now has to fight the cases to the appellate and judicial body.

“This will result in a spurt of litigation and delayed collection of revenue. It will also ruin the business of many entrepreneurs as they will be wasting their energy and resources in protracted litigation,” S K Tulsiyan, president, Income Tax Bar Association (ITBA), Calcutta, commented.

“It is for assessees who have been compelled to hide their income because of business or personal compulsions. Additionally, the Commission was not set up to deal with only search and seizure matters, but also for compliant assessees keen to pay up their tax liabilities at one go without any provocation from the department.”

More on explaining ITSCs image took a beating he stated, because of the wrong perception that it is a window for compulsive tax evaders “Power of the Settlement Commission was challenged. The commission was also facing other administrative issues. Moreover, the government had invoked several other provisions and proposals to settle cases by reducing litigation through the ‘Vivad Se Vishwas’ scheme Know about the tax dispute settlement scheme (Vivad se Vishwas Bill) under the IT act. Under this scheme, taxpayers can settle all disputes before the end of 31st March 2020.”

“That apart, ITSC is a quasi-judicial body independent of CBDT and all applications filed till January 31, 2021, must be settled by the same body. How can the cases be brought under the purview of an interim board which reports to CBDT,”

Remembering the pandemic phase has hurt the fiscal health of the country as well as its economy ITBA Calcutta has urged the finance dept to reconsider their decision of scrapping ITSC from 1st Feb “Alternatively, the government can contemplate allowing ITSC to receive fresh applications till March 31, 2021, and settle the pending cases within a stipulated time frame.”