Various clarifications issued by the CBDT regarding practical operation of the scheme in the question-answer form are as follows:

Where only a part of taxes is outstanding, whether the waiver of interest or penalty is in full?

Yes

If the order of assessment was made on March 31, 1998 but the notice of demand was served after March 31, 1998, can the declaration be made under Samdhan scheme?

Yes. The demand is determined on the date the order of assessment is made.

Where refund for an earlier year is adjusted against the demand of any year, will such an adjustment be regarded as the payment of tax?

Yes. The adjournment ofrefund payable is one of the modes of payment of taxes.

Where the tax arrears comprises tax and interest, how will the part- payment be first appropriated towards tax then interest?

The part-payments are appropriated first towards tax and then towards interest.

In a case where taxes are outstanding on March 31, 1998 and also on the date of declaration but the orders of penalty is passed after March 31, 1998, will the declarant be entitled to the waiver of penalty?

Section 91 empowers the designated authority to grant immunity from the imposition of penalty in respect of income which is the subject matter of declaration. As the taxes outstanding on March 31, 1998 will be covered under the declaration, the designated authority can grant waiver of such penalty.

The Scheme offers full waiver of interest and penalty, where the taxes arrears include such arrear includes such interest of penalty along with the tax. What kind of interest and penalty would be open for such waiver?

Allinterest and penalties that are directly related to assessed income or arrears of taxes will be open for full waiver, if the taxes are outstanding on the specified dates, for example, interest u/s 234 A, 234 B, 234C, 139 (8), 215, 216, 217, 158 BFA, 220 (2) or penalties u/s 271 (1)(c), 221, 158 BFA, 273 etc. But where the interest or penalty is not directly related to assessed income arrears of tax,waiver of only 50 per cent thereof is available, for example, interest u/s 201 (1A) penalties u/s 27191)(b), 271A, 271B, 271BB, 271C, 271D, 271E, 271F, 272A, 272AA, 272Bb etc.

Where only certain items of addition are in dispute, can the assessee take advantage of the scheme for the entire demand of the year?

Yes. The scheme is applicable to the entire demand of the assessment year.

Whether the scheme covers cases where taxes are outstanding as on March 31, 1998 but the appeal is field after March 31, 1998?

Yes, the pendency of appeal etc. should be on the date of declaration.

In respectof assessments related to assessment years prior to assessment year 1993-94, the appeal is filed against the order of assessment in the case of the firm and the consequential effect of orders is given in the hands of the partners. Will the appeal filed by the firm be treated as appeal filed by the partners as far as tax arrears in their hands are concerned?

Yes.

Where the declarant fails to pay full amount determined as payable under Samadhan scheme, would he get credit for the partly paid taxes in the subsequent year?

If the declarant fails to pay full amount payable by him under the scheme, he would not be entitled to the benefits of the scheme. The amount paid cannot be refunded to him either, He may, however, seek credit for payment so made against the outstanding arrears.

What is the time limit for the designated authority to grant immunity from prosecution and penalty?

The designated authority will grant immunity on fulfillment of all the conditions provided for in section 90including the withdrawal of appeal/writ/reference/etc. It shall be granted as quickly as possible.

Where the assessee has received order u/s 264 but has moved a petition u/s 154 of the Act before the CIT, can be avail the scheme?

No. There would be pendency of revision proceedings before the CIT in such cases.

Is the scheme open to cases where orders of assessment have been set aside before 31.3.1998 but reassessments are still pending?

No. There is no tax arrear on March 31, 1998 or on the date of declaration.

Whether the scheme covers of estate duty?

No.Whether settlement of outstanding interest along is possible when the declarant does not want to give up his right of appeal the quantum of income or tax?

No. samadhan Scheme is a package for settlement of tax arrears of a particular assessment year in entirety. Settlement of any part of arrears is not possible. If, however, arrears relating to only interest and penalty are outstanding, whether relating to anyparticular assessment year or otherwise, these can be settled at 50 per cent of the arrear.