The Central Board of Direct Taxes (CBDT) issued the clarifications vide Circular No. 04/2021 on provisions of the Direct Tax Vivad se Vishwas Act, 2020.
The CBDT has received Several representations seeking further clarity with regard to the classification of a case as a ‘search case’ for the purposes of Vivad se Vishwas. The CBDT has examined the matter.
In order to remove any uncertainty in this regard, and in the exercise of powers under section 10 and II of Vivad se Vishwas, it is hereby clarified that a ‘search case’ means an assessment or reassessment made under sections 143(3)/ 144/ 147/ 153A/ 153C/ 158BC of the Income-tax Act in the case of a person referred to in section 153A or section 153C or section 158BC or section 158BD of the Income-tax Act on the basis of search initiated under section 132 or requisition made under section 132A of the Income-tax Act. The FAQ no. 70 of circular 2112020 stands modified to this extent.
Sections 10 and 11 of Vivad se Vishwas empower the Central Government/Central Board of Direct Taxes to issue directions or orders in the public interest or to remove difficulties. In order to facilitate the taxpayers, clarifications under the said sections in form of answers to frequently asked questions (FAQs) were issued vide circular no. 9/2020 dated 22nd April 2020 and circular no. 21/2020 dated 4th December 2020.
FAQ no.70 of circular 21/2020 clarified eligibility for search case under Vivad se Vishwas. It was clarified that if the assessment order has been framed in the case of a taxpayer under section 143(3) / 144 of the Income-(ax Act based on the search executed in some other taxpayer’s case, it is to be considered as a ‘search case’ under Vivad se Vishwas.