The Central Government has 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 1st February, 2021.
It has also been provided that no application for settlement can be filed on or after 1st February, 2021, which was the date on which the Finance Bill, 2021 was laid before the Lok Sabha. To dispose off the pending settlement applications as on 31st January, 2021, the Central Government has constituted Interim Board for Settlement on 10th August, 2021.
In order to provide relief to the taxpayers who were eligible to file application as on 31st January, 2021, but could not file the same due to cessation of ITSC, can file by 30th September, 2021 before the Interim Board in case:
- The assessee was eligible to file application for settlement on 31st January, 2021 for the assessment years for which the application is sought to be filed (relevant assessment years); and
- all the relevant assessment proceedings of the assessee are pending as on the date of filing the application for settlement.
Further, it is clarified that taxpayers who have filed such applications shall not have the option to withdraw such applications as per the provisions of section 245M of the Act. Further, the taxpayers who have already filed application for settlement on or after 1st February, 2021 as per the direction of the various High Courts and who are otherwise eligible to file such application, as above, on the date of filing of the said application shall not be required to file such application again.
Legislative amendments in this regard shall be proposed in due course.