Tax is the main source of revenue of a country. India has various tax laws enumerating different types of tax and its mode of collection depending on various circumstances, terms and conditions. One of the greatest disadvantage in collection of tax is the pendency or arrears of tax due to the revenue of the country. In order to find resolution for removing the accumulating arrears of tax Central Government had enacted The Direct Tax Vivad se Vishwas Act 2020 on 17th march 2020 with 12 sections briefly stating the objective of the Act of resolving disputed tax and any matter connected there to subject to the provisions of the Act. Disputed tax is any tax determined under the Income Tax Act or wealth tax Act in relation to the assessment year of the net wealth disputable as tax by the Assesse or the declarant.
Section2 of the act has the definition clauses stating various definitions for every term that can be implemented in accordance with the act or any existing law in force. Section3 of the act clearly put forth nature of the taxable arrears or amount payable by the Declarant subject to section 4 of the Act and the Income Tax Act 1961 or any other act or law existing in force. Section four of the act with seven sub clauses precisely defines declaration and filing of particulars as per the prescribed norms in accordance with the act. Time and manner of payable arrears are stated in section 5 of the act by the designated authority. An order shall be passed as per section5 (1) within 15 days from the date of receipt of the declaration. As per section 5(3) the determination of the amount payable is conclusive related to any matters stated and such matters should not be reopened in any other proceeding under Income Tax Act 1961 or in law existing in force or by any agreement.
Section 6 of the act gives the exception clause of not imposing levy or any penalty or charge or any interest under the Income tax Act by the designated authority on any matter resolved under section 5 of the act. Section 7 further clarifies that amount paid as per the declaration made under section 4 is not refundable at any circumstances. By virtue of section 8 the declarant is not entitled to any benefit, concession or immunity in any proceedings other than that are related to the declaration made by the declarant. Section 9 of the act states the exemption of tax arrears made under section 143,144, 153 (A), 153 (C), 132, 132 (A) of Income tax Act 1961 of amount exceeding five Crores where the provisions of this act is not applicable. Section 10, section 11 and section 12 of the Act states the power of the Board to issue directions, power to remove difficulties and power to make rules respectively.
The Act of 2020 is indeed a bold step from Government for the speedy recovery of the pending taxable arrears as a remedy avoiding never ending cumbersome process of recovery of Arrears.