CBDT Removal-of-Difficulty Order No. 8/2025 Deems Certain Appeals Pending for Vivad Se Vishwas Eligibility

The Direct Tax Vivad Se Vishwas Scheme 2024 came into force on 1 October 2024, offering taxpayers a route to close pending income-tax disputes by paying the disputed tax and walking away from the interest and penalty attached to it. But the Scheme set a hard eligibility gate: your dispute had to be "pending" as on the specified date, 22 July 2024, the day the Finance (No.2) Bill 2024 was introduced in Parliament. A narrow but common fact pattern fell straight through that gate, and on 20 January 2025 the Central Board of Direct Taxes (CBDT) closed it with Removal-of-Difficulty Order No. 8/2025. This Morning Tax Tip explains exactly who the order rescues, how disputed tax is computed once you are let in, and the mistakes that still disqualify an otherwise eligible appellant.

What the Section Says

Order No. 8/2025 was published as S.O. 348(E) in the Gazette of India (Extraordinary) No. 346 dated 20 January 2025, under reference [No. 8/2025/F.No. 370153/01/2025-TPL]. It is issued under sub-section (1) of section 98 of the Finance (No.2) Act, 2024 (15 of 2024), which empowers the Central Government to remove, by an order not inconsistent with the Scheme, any difficulty that arises in giving effect to the Direct Tax Vivad Se Vishwas Scheme 2024.

The difficulty the order identifies is precise. It applies only where all four of the following conditions are satisfied together, reproducing the statutory language of the 20 January 2025 order:

Why did these taxpayers need rescuing? The Scheme defines an "appellant" by reference to appeals pending as on 22 July 2024. Consider a person served with an assessment order dated 15 July 2024 who still had the usual 30-day window under section 249(2) to file a first appeal before the Commissioner (Appeals). If that person lawfully filed on, say, 10 August 2024, no appeal was technically "pending" on 22 July 2024. On a literal reading they were not an "appellant" at all, and the door to a scheme launched on 1 October 2024 stayed shut despite a live, in-time dispute.

The operative part of the 20 January 2025 order fixes this with four directions. For the purposes of the Scheme: (i) the appeal "shall be considered as pending as on the 22nd day of July, 2024"; (ii) the person "shall be considered as an appellant"; (iii) "disputed tax shall be calculated on the basis of such appeal"; and (iv) the provisions of the Scheme and the rules framed thereunder apply accordingly. In plain English, your in-limitation appeal is back-dated to 22 July 2024, you become an appellant, and your settlement price is worked out on the figures in that appeal. The full text is on the department's portal in CBDT Order No. 8/2025, and the enabling power sits in the Finance (No.2) Act, 2024.

Worked Example

Take Mr Arvind, a salaried assessee whose return for assessment year 2023-24 was reopened. The Assessing Officer passed an order under section 143(3) dated 15 July 2024, adding Rs 18,00,000 to his income and raising a demand whose disputed tax component was Rs 6,00,000, plus interest under sections 234A/234B and a concealment penalty exposure under section 270A. Mr Arvind filed his appeal before the Commissioner (Appeals) on 10 August 2024, comfortably within the 30-day limitation and with no condonation application.

Before Order No. 8/2025, Mr Arvind was stuck: his appeal was not "pending" on 22 July 2024, so he could not file a declaration. After the 20 January 2025 order, all four conditions are met, so he is deemed an appellant and his disputed tax is fixed at Rs 6,00,000. Because his appeal was filed after 31 January 2020, he is a "new appellant", which sets his settlement at 100 per cent of disputed tax if his Form-1 declaration was filed on or before 31 January 2025, the cut-off that CBDT Circular No. 20/2024 extended from the original 31 December 2024.

Filing in time therefore saved Mr Arvind Rs 60,000 on the tax alone, over and above the waiver of all interest and penalty on the settled demand. One more lever matters: had this been the Income Tax Department's appeal rather than the taxpayer's, the amount payable would halve to 50 per cent of these figures under the Scheme's departmental-appeal concession. You can reconstruct the underlying tax on the addition using the income tax calculator, and if the dispute turns on regime choice, the old vs new regime comparison shows how the Rs 18,00,000 addition would have been taxed.

The paperwork then runs in a fixed sequence of four forms notified under the Scheme: Form-1 is the declaration and undertaking filed by the taxpayer; Form-2 is the certificate issued by the Designated Authority determining the amount payable; Form-3 is the taxpayer's intimation of payment; and Form-4 is the Designated Authority's order of full and final settlement. The self-assessment tax machinery is not used here; payment is made against the Form-2 certificate.

Common Mistakes

ITR scrutiny and departmental rejections under the 2024 Scheme clustered around a handful of avoidable errors, each tied to the precise wording of the 20 January 2025 order.

The first error is the most frequent. Order No. 8/2025 does not open the Scheme to every late appeal; it rescues only the taxpayer who was still within limitation on 22 July 2024 and simply had not yet filed. If your assessment order was dated 25 July 2024, you were never within the (a)-to-(d) fact pattern, because condition (a) requires the order to pre-date 22 July 2024.

The second error is fatal because it is binary. If you attached even a routine condonation application, condition (d) ("without any application for condonation of delay") is not met and the deeming provision never engages, regardless of how short the delay was. Taxpayers who realised this sometimes tried to withdraw the condonation prayer; the safer course was always to confirm the appeal was genuinely in time before relying on the order.

A subtler trap is the interaction with TDS and prepaid taxes. Disputed tax under the Scheme is the tax on the disputed addition, computed net of credits already given; taxpayers who grossed up the demand without netting advance tax and TDS over-declared and over-paid. Always reconcile the Form-2 certificate against your Form 26AS credits before paying.

FAQ

My assessment order is dated 22 July 2024 and I appealed on 1 August 2024. Am I covered?

Yes. Condition (a) of Order No. 8/2025 covers an order passed "on or before" 22 July 2024, so an order dated exactly 22 July 2024 qualifies, provided the appeal window was open on that date, you filed within limitation, and you filed no condonation application.

I filed my appeal with a condonation-of-delay application. Can I still use the order?

No. Condition (d) of the 20 January 2025 order requires the appeal to have been filed "without any application for condonation of delay." A condonation application signals the appeal was late, so the deeming of pendency as on 22 July 2024 does not apply to you.

How is my disputed tax calculated once the appeal is deemed pending?

Direction (iii) of the order states that disputed tax "shall be calculated on the basis of such appeal." It is the income-tax (including surcharge and cess) attributable to the additions you are contesting in that appeal, net of credits already allowed, not the entire demand on the notice of demand.

Am I a new appellant or an old appellant?

An appeal filed after 31 January 2020 makes you a new appellant, who pays 100 per cent of disputed tax if the declaration was filed on or before 31 January 2025. An appeal pending on or before 31 January 2020 makes you an old appellant, at 110 per cent before that cut-off and 120 per cent on or after 1 February 2025.

Is the 2024 Scheme still open for fresh declarations in October 2026?

No. The Direct Tax Vivad Se Vishwas Scheme 2024 was a time-bound amnesty; the window to file fresh Form-1 declarations has since closed. Order No. 8/2025 now matters mainly for settlements already in process and as the authoritative statement of how "pendency" as on 22 July 2024 is tested, which is instructive for any future amnesty.

What happens to the interest and penalty on my demand?

On the disputed tax you settle, the Scheme waives the associated interest and penalty in full once Form-4 is issued. Settling the tax under section 143(3) demand for one year does not automatically settle any other assessment year; each dispute must be declared separately.

Does settling under the Scheme stop me continuing my appeal?

Yes. Once the Designated Authority issues the Form-4 order of full and final settlement, the related appeal is deemed withdrawn and the matter cannot be reopened or re-litigated on the same issues for that year.

Order No. 8/2025 is a short, surgical instrument, but for the taxpayer who filed an in-time appeal in the window between 22 July 2024 and the Scheme's launch on 1 October 2024, it was the difference between a full-blown litigation and a clean settlement at 100 per cent of disputed tax. For a wider view of how the department tracks open disputes, see our explainer on the Compliance Portal e-Campaign process and the companion note on Circular No. 20/2024's deadline extension.