Page 92 - DHC Budget Book 2021-22 Final
P. 92
7.23
Discontinuance of existing Income-tax Settlement Commission (ITSC) with immediate effect and constitution of one or more Interim Boards for settlement of pending applications
[Sec. 245A, 245B, 245BC, 245BD, 245C, 245D, 245DD, 245F, 245G, 245H, 245AA, 245M] [w.e.f. 01-02-2021]
Sec. 245A, 245B, 245BC & 245BD have been proposed to be amended to discontinue ITSC w.e.f. 01-02-2021 and no applications u/s 245C for settlement of cases shall be made on or after 01-02-2021.
For settlement of pending applications, a new Sec. 245AA has been proposed to be inserted w.e.f. 01-02-2021 to provide that CG shall constitute one or more Interim Boards for Settlement, which shall consist of 3 members, each being the rank of CCIT.
‘Pending application’ means an application filed u/s 245C which has not been declared invalid u/s 245D(2C) and in respect of which no order u/s 245D(4) was issued on or before 31-01- 2021. Further, where an order was required to be passed u/s 245D(2C) on or before 31-01-2021 to declare the application invalid but order has not been passed on or before 31-01-2021, such application shall be deemed to be valid and treated as pending application.
Sec. 245DD, 245F, 245G & 245H has been proposed to be amended to provide that the provisions relating to exercise of powers or performance of functions by the ITSC viz. provisional attachment, exclusive jurisdiction over the case, inspection of reports, power to grant immunity, rectification of orders passed u/s 245D(4) shall apply mutatis mutandis to the Interim Board on or after 01-02-2021.
CG may by a notification make a scheme for
settlement of pending applications by the Interim Board to eliminate the interface between the Board and assessee to the extent technologically feasible.
New Sec. 245M is proposed to be inserted
w.e.f. 01-02-2021 to provide an option to the assessee for withdrawal of pending applications within a period of 3 months from the date of commencement of the Finance Act, 2021 and AO shall be intimated about such withdrawal in the prescribed manner.
If application is withdrawn by the assessee, proceedings with respect to the application shall abate and AO or income-tax authority before whom the proceeding at the time of making
the application was pending, shall dispose of the case as if no application u/s 245C has been made. Further, the income tax authority shall not be entitled to use the material/ information produced before the ITSC or results of enquiry or evidence recorded by ITSC except material/ information collected in the course of any other proceedings.
Comment
ITSC was a very effective body for settlement of disputes between the assessee and department. There is no reason given for discontinuation of such body. While on one hand, CG has come out with dispute resolution scheme [The Direct Tax Vivad se Vishwas Act 2020], discontinuation of ITSC on the other hand does not seem justified.
INDIA BUDGET 2021-22
7.24 Rationalisation of provisions on transfer of assets to partner on dissolution or reconstitution of firm, AOP or BOI [Sec. 45(4), Sec. 45(4A) & Sec. 48] [w.r.e.f. AY 2021-22]
Hitherto, Sec. 45(4) provided that the profits or gains arising from the transfer of a capital asset by way of distribution of capital assets on the dissolution of a firm or AOP or BOI (not being a company or a co-operative society) or otherwise, shall be chargeable to tax as the income of the firm, AOP or BOI, of the previous year in which the said transfer takes place. Further, the fair market value of the asset on the date of such transfer shall be deemed to be the full value of consideration for the purposes of Sec. 48.
It is now proposed to substitute the erstwhile Sec. 45(4) to provide that the profit or gains arising from transfer of a capital asset by way of distribution of capital assets on dissolution or reconstruction of any specified entity (a firm or AOP or BOI), which represents the balance in the capital account of the specified person (partner of a firm or AOP or BOI), shall be deemed to be the income of the specified entity and shall be chargeable to tax under the head ‘Capital Gains’ in the previous year in which such capital asset
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