The direct tax dispute resolution scheme, introduced from June 1 to December 31, seeks to address the issue of pending litigation.
An official said so far the response to the scheme had been lacklustre but the Central Board of Direct Taxes expects the scheme to pick up pace by December.
The scheme will help taxpayers resolve litigation, while the tax department could reduce its administrative costs in disposing appeals and collect taxes.
The official said the CIT(A) has already drawn up a list of cases which would be eligible for this Scheme and has intimated to Principal CIT.
This may include cases where appeal has been filed against mandatory interest, mandatory fees, and any other case found fit in the opinion of the CIT(A).
As per the Direct Tax Dispute Resolution Scheme, once an assessee decides to avail the scheme, the tax officer shall ascertain the amount of tax to be paid within 60 days of receiving the declaration.
The tax officer will then issue a certificate to the assessee, who will be required to make a pay the tax amount within 30 days.
The tax department has already asked its officers to proactively encourage assessees to take advantage of the one-time tax dispute resolution scheme, ending on December 31.
As per I-T department data, there were 73,402 appeals with tax effect above Rs 10 lakh and 1,85,858 appeals with tax effect below Rs 10 lakh pending before CIT (Appeal) as on February 29. Thus, 2,59,260 appellants are eligible for the benefit of this scheme.
As per the scheme, a taxpayer who has an appeal pending before the CIT (Appeal) can settle his/her case by paying the disputed tax and interest up to the date of assessment. No penalty in respect of cases with disputed tax up to Rs 10 lakh will be levied.
For cases exceeding Rs 10 lakh, 25 per cent of penalty would be levied and any pending appeal against a penalty order can also be settled by paying 25 per cent of the minimum of the imposable penalty.