In exercise of the powers conferred by sub-section (2) of section 12 read with sub-sections (1) and (5) of section 4 and sub-sections (1) and (2) of section 5 of the Direct Tax Vivad se Vishwas Act, 2020 (3 of 2020), the Central Government hereby makes the following rules, namely:―
1. Short title and commencement.-(1) These rules may be called the Direct Tax Vivad se Vishwas Rules, 2020.
(2) They shall come into force on the date of their notification in the Official Gazette.
2. Definitions.-In these rules, unless the context otherwise requires, -
(a) “Act” means the Direct Tax Vivad se Vishwas Act, 2020 (3 of 2020);
(b) “dispute” means appeal, writ or special leave petition filed or appeal or special leave petition to be filed by
the declarant or the income-tax authority before the Appellate Forum, or arbitration, conciliation or
mediation initiated or given notice thereof, or objections filed or to be filed before the Dispute Resolution
Panel under section 144C of the Income-tax Act, or application filed under section 264 of the Income-tax
Act;
(c) “eligible search cases” means cases in which an assessment has been made under sub-section (3) of
section 143 or section 144 or section 153A or section 153C of the Income-tax Act on the basis of search
initiated under section 132 or section 132A of the Income-tax Act and the amount of disputed tax does not
exceeds five crore rupees;
(d) “Form” means the Forms appended to these rules;
(e) “issues covered in favour of the declarant” means issues in respect of which –
(i) an appeal or writ or special leave petition is filed or appeal or special leave petition is to be filed by the
income-tax authority before the appellate forum or
(ii) an appeal is filed or to be filed before the Commissioner (Appeals) or objections is filed or to be filed
before the Dispute Resolution Panel by the declarant, on which he has already got a decision in his favour
from Income Tax Appellate Tribunal (where the decision on such issue is not reversed by the High Court or
the Supreme Court) or the High Court (where the decision on such issue is not reversed by the Supreme
Court), or
(iii) an appeal is filed or to be filed by the declarant before Income Tax Appellate Tribunal on which he has
already got a decision in his favour from the High Court (where the decision on such issue is not reversed
by the Supreme Court);
(f) “section” means section of the Direct Tax Vivad se Vishwas Act, 2020 (3 of 2020);
(g) the words and expressions used in these rules and not defined but defined in the Act or Income-tax
Act,1961 shall have the same meanings respectively as assigned to them in those Acts.
3. Form of declaration and undertaking.-(1) The declaration under sub-section (1) of section 4 shall be made in
Form-1 to the designated authority.
(2) The undertaking referred to in sub-section (5) of section 4 shall be furnished in Form-2 along with the
declaration.
(3) The declaration under sub-rule (1) and the undertaking under sub-rule (2), as the case may be, shall be signed
and verified by the declarant or any person competent to verify the return of income on his behalf in accordance
with section 140 of the Income-tax Act, 1961.
(4) The designated authority on receipt of declaration shall issue a receipt electronically in acknowledgement
thereof.
4. Form of certificate by designated authority.- The designated authority shall grant a certificate electronically
referred to in sub-section (1) of section 5 in Form-3.
5.Intimation of payment.- The detail of payments made pursuant to the certificate issued by the designated
authority shall be furnished along with proof of withdrawal of appeal, objection, application, writ petition, special
leave petition, arbitration, conciliation, mediation or claim filed by the declarant to the designated authority in
Form-4.
6. Manner of furnishing.- The Form-1 and Form-2 referred to in rule 3 and Form-4 referred to in rule 5 shall be
furnished electronically under digital signature, if the return of income is required to be furnished under digital
signature or, in other cases through electronic verification code.
Explanation. – For the purpose of this rule, “electronic verification code” shall have the same meaning as referred
to in rule 12 of the Income-tax Rules, 1962.
7. Order by designated authority.-The order by the designated authority under sub-section (2) of section 5, in
respect of payment of amount payable by the declarant as per certificate granted under sub-section (1) of section 5,
shall be in Form-5.
8. Laying down of procedure, formats and standards.-The Principal Director General of Income-tax (Systems) or
the Director General of Income-tax (Systems), as the case may be, shall lay down procedures, formats and standards
for furnishing and verifying the declaration in Form-1 under sub-rule (1) of rule 3, furnishing and verifying the
undertaking in Form-2 under sub-rule (2) of rule 3, granting of certificate in Form-3 under rule 4, intimation of
payment and proof of withdrawal in Form-4 under rule 5 and issuance of order in Form-5under rule 7 and the
Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) shall also be
responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to the said
declaration, undertaking, certificate, intimation and order.
9. Manner of computing disputed tax in cases where loss or unabsorbed depreciation is reduced.-(1) Where
the dispute in relation to an assessment year relates to reduction in loss or unabsorbed depreciation to be carried
forward under the Income-tax Act, the declarant shall have an option to –
(i) include the tax, including surcharge and cess, payable on the amount by which loss or unabsorbed depreciation is
reduced in the disputed tax and carry forward the loss or unabsorbed depreciation by ignoring such amount of
reduction in loss or unabsorbed depreciation; or
(ii) carry forward the reduced amount of loss or unabsorbed depreciation.
(2) Where the declarant exercises the option as per clause (ii) of sub-rule (1), he shall be liable to pay tax, including
surcharge and cess, along with interest, if any, as a consequence of carrying forward the reduced amount of loss or
unabsorbed depreciation in subsequent years:
Provided that the written down value of the block of asset on the last day of the year, in respect of which
unabsorbed depreciation has been reduced, shall not be increased by the amount of reduction in unabsorbed
depreciation:
Provided further that in cases other than the eligible search cases, in computing the reduced amount of
loss or unabsorbed depreciation to be carried forward in clause (ii) of sub-rule (1), one-half of the amount by which
loss or unabsorbed depreciation is reduced shall be considered for reduction, if such reduction is related to issues
covered in favour of declarant:
Provided also that in case of eligible search cases, in computing the reduced amount of loss or unabsorbed
depreciation to be carried forward in clause (ii) of sub-rule (1), one and one-fourth times of the amount by which
loss or unabsorbed depreciation is reduced shall be considered for reduction and where the one and one-fourth times
of the amount by which loss or unabsorbed depreciation is reduced exceeds the amount of loss to be carried forward
before it’s reduction, such excess shall be ignored:
Provided also that in case of eligible search cases in computing the reduced amount of loss or unabsorbed
depreciation to be carried forward in clause (ii) of sub-rule (1), five-eighth of the amount by which loss or
unabsorbed depreciation is reduced shall be considered for reduction, if such reduction is related to issues covered in
favour of declarant.
10. Manner of computing disputed tax in cases where Minimum Alternate Tax (MAT) credit is reduced.-(1) Where
the dispute in relation to an assessment year relates to reduction in Minimum Alternate Tax (MAT) credit to be
carried forward, the declarant shall have an option to
(i) include the amount by which MAT credit to be carried forward is reduced in disputed tax and carry forward the
MAT credit by ignoring such amount of reduction, or
(ii) carry forward the reduced MAT credit.
(2) Where the declarant exercises the option as per clause (ii) of sub-rule (1), he shall be liable to pay tax, including
surcharge and cess, along with interest, if any, as a consequence of carrying forward reduced MAT credit in
subsequent years:
Provided that in cases other than the eligible search cases, in computing the reduced amount of MAT
credit to be carried forward in clause (ii) of sub-rule (1), one-half of the amount by which MAT credit is reduced
shall be considered for reduction, if such reduction is related to issues covered in favour of declarant:
Provided further that in case of eligible search cases, in computing the reduced amount of MAT credit to
be carried forward in clause (ii) of sub-rule (1), one and one-fourth times of the amount by which MAT credit is
reduced shall be considered for reduction and where the one and one-fourth times the amount by which MAT credit
is reduced exceeds the amount of MAT credit to be carried forward before it’s reduction, such excess shall be
ignored:
Provided also that in case of eligible search cases in computing the reduced amount of MAT credit to be
carried forward in clause (ii) of sub-rule (1), five-eighth of the amount by which MAT credit is reduced shall be
considered for reduction, if such reduction is related to issues covered in favour of declarant.
Explanation – For the purpose of this rule MAT credit means tax credit as per the provisions of section 115JAA or
115JD of the Income-tax Act.
11. Manner of computing disputed tax in certain cases – (1) Where the dispute includes issues covered in favour
of declarant, the disputed tax in respect of such issues shall be the amount, which bears to tax, including surcharge
and cess, payable on all the issues in dispute, the same proportion as the disputed income in relation to issues
covered in favour of declarant bear to the disputed income in relation to all the issues in dispute
