The 2021-2022 Budget, through the Finance Act, amended the provisions of the Income Tax Act 1961 to provide that the Income Tax Settlement Commission (ITSC) will cease to act. operate from February 1, 2021.
In addition, it has also been provided that no claim can be filed as of February 1, when the 2021 finance bill was filed with the Lok Sabha.
In order to dispose of the claims pending as of January 31, 2021, the government had set up a Provisional Settlement Commission.
As a result, the Ministry of Finance received reports that a number of taxpayers were at an advanced stage of filing their claims with the ITSC as of February 1.
In order to provide relief to taxpayers who were eligible to file as of January 31, 2021, but who could not file the same due to the shutdown of the ITSC Vacuum Finance Act, 2021, the IT department decided earlier this month that claims can be filed by taxpayers no later than September 30, 2021 to the Interim Board.
The Central Commission for Direct Taxes (CBDT) issued an order on September 28 authorizing the IT Commissioner to admit pending claims.
“The Commission (…) in order to avoid real difficulties for the assessors authorizes the Income Tax Commissioner, appointed secretary of the Settlement Commission before February 1, 2021, to admit a claim on behalf of the Interim Commission filed after Jan. 31, 2021 … and treat those claims as valid and treat them as “pending claims,” the CBDT said in the order.
This would, however, be subject to the condition that the assessor is eligible to file a claim on January 31, 2021 for the assessment years for which the claim is requested and that all relevant assessment procedures of the assessee are pending as on the date of the claim submission.