Income Tax Ordinance

Chapter XVIIIB

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152F. Alternative Dispute Resolution

1[CHAPTER XVIIIB

ALTERNATIVE DISPUTE RESOLUTION

152F. Alternative Dispute Resolution.-

(1) Notwithstanding anything contained in  Chapter  XIX  any  dispute  of  an  assessee  lying  with  any  income  tax authority,  Taxes  Appellate  Tribunal  or  Court  may  be  resolved  through Alternative Dispute Resolution (hereinafter referred to as ADR) in the manner described in the following sections of this Chapter and rules made thereunder.


(2)  Board  may,  by  notification  in  the  official  Gazette,  specify  the  class  or classes  of  assessees  eligible  for  ADR  or  extend  the  area  or  areas  in  which these provisions may be applied.

 

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1Ins. new chapter XVIIIB by F.A. 2011

 

 

152G. Commencement of ADR

152G. Commencement of ADR.- 

The ADR as mentioned in this Chapter shall come into force on such date and in such class or classes of assessees as the Board may determine by notification in the official Gazette.

 

 

152H. Definition

152H. Definition.- 

For the purposes of this Chapter, unless the context otherwise requires-

(a) "authorised representative" means an authorised representative mentioned in sub-section (2) of section 174;
(b) "bench" means bench of Taxes Appellate Tribunal;
(c) "Commissioner's Representative" means an officer or officers nominated by the Commissioner of Taxes from among the income tax authorities under section 3 to represent in the Alternative Dispute Resolution process under this Chapter;
(d) "court" means the Supreme Court;
(e) "dispute" means an objection of an assessee regarding-
(i)  assessment  of  income  above  the  income  declared  by  him  in  his return of income for the relevant year, or
(ii) order of an appellate authority under chapter XIX which results in assessment  of  income  which  is  above  the  declared  amount  in  his return of income;

 

152I. Application for alternative resolution of disputes.-

152I.Application  for  alternative  resolution  of  disputes.-

(1)  Notwithstanding anything contained in Chapter XIX an assessee, if aggrieved by an order of an income  tax  authority,  may  apply  for  resolution  of  the  dispute  through  the ADR process.


(2) An assessee may apply for ADR of a dispute which is pending before any income-tax authority, tribunal or court.
(3) All  cases dealt with under sub-section (2) are subject to permission of the concerned incometax authority 1[, tribunal]or the court, as the case may be:

Provided that after obtaining such permission from the income tax authority, Tribunal or the court and upon granting of  such permission, the matter shall remain stayed during the ADR negotiation process.
(4)  The  application  shall  be  submitted  in  such  form,  within  such  time, accompanied  with  such  fees  and  verified  in  such  manner  as  may  be prescribed.
(5)  The  application  is  to  be  submitted  to  the  respective  Appellate  Joint Commissioner  of Taxes  or  Appellate  Additional  Commissioner  of Taxes  or Commissioner  of  Taxes (Appeals)  or Taxes  Appellate Tribunal,  as the  case may be.

2[(5A) The application may also be filed in such electronic, computer readable or machine readable form and in such manner as may be specified by the Board by order in writing.]

(6)  In  the  case  of  a  dispute  pending  before  either  Division  of  the  Supreme Court, the assessee shall obtain the permission of the court prior to filing an application  under  sub-section  (2),  by  filing  an  application  before  the  court which,  upon  such  an  application  being  made  before  it,  may  pass  an  order allowing the matter to proceed to ADR, or otherwise as it deems fit.

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1 Ins. by F. A. 2015

2 Ins. by F. A. 2017

152II. Stay of proceeding in case of pending appeal or reference at Appellate Tribunal or High Court Division

1[152II.  Stay  of  proceeding  in  case  of  pending  appeal  or  reference  at Appellate Tribunal or High Court Division.-

 

Where an assessee has filed an application for ADR for any income year and for the same income year, the Deputy Commissioner of Taxes has filed an appeal before the Appellate Tribunal  or  the  Commissioner  has  made  a  reference  before  the  High  Court Division  and  no  decision  has  been  made  in  that  respect  by  the  Appellate Tribunal or High Court Division as the case may be, the proceeding of such appeal  or  reference  shall  remain  stayed  till  disposal  of  the  application  for ADR.]

 

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1Ins. new section 152II by F. A. 2012

152J. Eligibility for application for ADR.-

152J. Eligibility for application for ADR.- 

1 [An assessee shall not be eligible for application to ADR if he fails to pay tax payable under section 74 where the return of income for the relevant year or years has been submitted.]

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1 Added by F.A. 2016

152K. Appointment of Facilitator and his duties and responsibilities.-

152K. Appointment of Facilitator and his duties and responsibilities.- 

For the purposes of resolving a dispute in an alternative way, the Board may select or appoint  Facilitator  and  determine  his   1[fees,]  duties  and  responsibilities  by rules.

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1Subs. by F. A. 2012

 

152L. Rights and duties of the assessee for ADR.-

152L.  Rights  and  duties of  the  assessee for  ADR.-

(1)  Subject  to  sub-section (2),  the  assessee  applying  for  ADR  shall  be  allowed  to  negotiate  himself personally  or  alongwith  an  authorized  representative,  with  the Commissioner's  Representative  for  the  concerned  dispute  under  the facilitation and supervision of the Facilitator.

(2)  The  Facilitator  may  exempt  the  applicant-assessee  from  personally attending the negotiation process and may be allowed to represent himself by an authorised representative, if he has sufficient reasons for his absence.


(3)  While  submitting  an  application  for  ADR,  the  applicant-assessee  shall submit all related papers and documents, disclose all issues of law and facts.
(4) The applicant-assessee shall be cooperative, interactive, fair and bonafide while negotiating for resolution.
(5) If the applicant-assessee makes any untrue declaration, submits any false document  and  obtains  an  order  or  assessment  on  that  basis,  the  order  or assessment shall be set aside, if so detected, and appropriate legal action be initiated against him.


(6) The applicant-assessee shall be liable to pay any taxes, if due as a result of negotiation with the time frame as decided in the ADR.

 

 

152M. Nomination and responsibility of the Commissioner's Representative in ADR.-

152M. Nomination and responsibility of the Commissioner's Representative in  ADR.- 

(1)  The  respective  Commissioner  of  Taxes  may  nominate  any income  tax  authority  subordinate  to  him,  not  below  the  rank  of  Deputy Commissioner  of  Taxes  to  represent  him  in  the  negotiation  process  of  the ADR.


(2) The representative so nominated under sub-section (1) shall attend the meeting(s) of ADR negotiation process and sign the agreement of such negotiation process, where an agreement is reached.

 

152N. Procedures of disposal by the Alternative Dispute Resolution.-

152N.  Procedures  of  disposal  by  the  Alternative  Dispute  Resolution.-

(1) Upon receiving the application of ADR, the Facilitator shall forward a copy of the application to the respective Deputy Commissioner of Taxes and also call for  his  opinion  on  the  grounds  of  the  application  and  also  whether  the conditions referred to in sections 152I and 152J have been complied with.


(2) If the Deputy Commissioner of Taxes fails to give his opinion regarding fulfillment  of the  conditions  within 1[five  working  days]  from  receiving  the copy mentioned in clause (c) of sub-section (3), the Facilitator may deem that the conditions thereto have been fulfilled.


(3) The Facilitator may-


(a) notify in writing the applicant and the Commissioner of Taxes or the  Commissioner's  Representative  to  attend  the  meetings  for settlement of disputes on a date mentioned in the notice;
(b)  if  he  considers  it  necessary  to  do  so,  adjourn  the  meeting  from time to time;
(c)  call  for  records  or  evidences  from  the  Deputy  Commissioner  of Taxes or from the applicant before or at the meeting, with a view to settle the dispute; and
(d) before disposing of the application, cause to make such enquiry by any income-tax authority as he thinks fit.

(4) The Facilitator will assist the applicant-assessee and the Commissioner's Representative  to  agree  on  resolving  the  dispute  or  disputes  through consultations and meetings.

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1Subs for the words "fifteen days" by F. A. 2012

152O. Decision of the ADR.-

152O. Decision of the ADR.- 

(1) A dispute, which is subject to this Ordinance, may  be  resolved  by  an  Agreement  either  wholly  or  in  part  where  both  the parties of the dispute accept the points for determination of the facts or laws applicable in the dispute.


(2)  Where  an  agreement  is  reached,  either  wholly  or  in  part,  between  the assessee and the Commissioner's Representative, the Facilitator shall record, in writing, the details of the agreement in the manner as may be prescribed.


(3)  The  recording  of  every  such  agreement  shall  describe  the  terms  of  the agreement  including  any tax  payable or  refundable  and  any  other  necessary and  appropriate  matter,  and  the  manner  in  which  any  sums  due  under  the agreement shall be paid and such other matters as the Facilitator may think fit to make the agreement effective.


(4) The agreement shall be void if it is subsequently found that it has been concluded by fraud or misrepresentation of facts.


(5)  The  agreement  shall  be  signed  by  the  assessee  and  the  Commissioner's Representative and the facilitator.


(6) Where no agreement, whether wholly or in part, is reached or the dispute resolution  is  ended  in  disagreement  between  the  applicant-assessee  and  the concerned Commissioner's Representative for non-cooperation of either of the parties,  the  Facilitator  shall  communicate  it,  in  writing  recording  reasons thereof,  within  fifteen  days  from  the  date  of  disagreement,  to  the  applicant and the Board, the concerned court, Tribunal, appellate authority and income tax authority, as the case may be, about such unsuccessful dispute resolution.


(7)  Where  the  agreement  is  reached,  recorded  and  signed  accordingly containing time and mode of payment of payable dues or refund, as the case may  be,  the  Facilitator  shall  communicate  the  same  to  the  assessee  and the concerned Deputy Commissioner of Taxes for compliance with the agreement as per provisions of this Ordinance.

(8) No agreement shall be deemed to have been reached if the Facilitator fails to  make  an  agreement  within 1[two  months]  from  the  end  of  the  month  in which the application is filed.


(9) Where there is a successful agreement, the Facilitator shall communicate the  copy  of  the  agreement  to  all  the  parties  mentioned  in  sub-section  (6) within fifteen days from the date on which the Facilitator and the parties have signed the agreement.

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1Subs for the words "one month" by F. A. 2012

152P. Effect of agreement.-

152P.  Effect  of  agreement.- 

(1)  Notwithstanding  anything  contained  in  any provision of this Ordinance, where an agreement is reached, under sub-section (9) of section 152O, it shall be binding on both the parties and it cannot be challenged in  any  authority,  Tribunal  or  court either  by  the  assessee  or  any other income tax authority.

(2) Every agreement, concluded under section 152O shall be conclusive as to the matters stated therein and no matter covered by such agreement shall, save as otherwise provided in this Ordinance, be reopened in any proceeding under this Ordinance.

 

152Q. Limitation for appeal where agreement is not concluded.-

152Q.  Limitation  for  appeal  where  agreement  is  not  concluded.-

(1) Notwithstanding  anything  contained  in  any  provision  of  this  Ordinance, where an agreement is not reached under this Chapter, wholly or in part, the assessee may prefer an appeal-

(a)  to  the  Appellate  Joint  Commissioner  of  Taxes  or  Appellate Additional  Commissioner  of  Taxes  or  Commissioner  of  Taxes (Appeals), as the case may be, where the dispute arises out of an order of a Deputy Commissioner of Taxes;
(b) to the Taxes Appellate Tribunal where the dispute arises out of an order  of  the  Appellate  Joint  Commissioner  of  Taxes  or  Appellate Additional  Commissioner  of  Taxes  or  Commissioner  of  Taxes (Appeals), as the case may be; and
(c)  to  the  respective  appellate  authority  or  court  from  where  the assessee-applicant has got permission to apply for ADR.

(2) In computing the period of limitations for filing appeal, the time elapsed between  the  filing  of  the  application  and  the  decision  or  order  of  the  ADR
shall be excluded.

 

1[Explanation.- For the purpose of this section, “prefer an appeal” means the revival of the appeal with an intimation in writing to the
respective appellate authority.]

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1Ins by 2017

 

152R. Post verification of the agreement.-

152R.  Post  verification  of  the  agreement.- 

(1)  The  Board  may  monitor  the progress  of  disposal  of  the  application  for  ADR  in  the  manner  as  may  be

prescribed and ensure necessary support and coordination services.


(2)  Copies  of  all  agreement  or  matter  of  disagreement  shall  be  sent  by  the Facilitator  to  the  respective  Commissioner  and  Board  for  verification  and ascertainment of whether the agreement is legally and factually correct.


(3)  After  receiving  the  copy  of  agreement  or  matter  of  disagreement,  if  it appears  to  the  Board  that  the  alleged  agreement  is  obtained  by  fraud, misrepresentation or concealment of fact causing loss of revenue, then such agreement shall be treated as  void and the matter shall be communicated to the concerned authorities, Tribunal or court for taking necessary action.

 

152S. Bar on suit or prosecution.-

152S. Bar on suit or prosecution.-

No civil or criminal action shall lie against any  person  involved  in  the  ADR  process  before  any  court,  tribunal  or authority for any action taken or agreement reached in good faith.]