{"id":6633,"date":"2020-02-22T10:28:47","date_gmt":"2020-02-22T04:58:47","guid":{"rendered":"http:\/\/itatonline.org\/articles_new\/?p=6633"},"modified":"2020-02-22T10:28:47","modified_gmt":"2020-02-22T04:58:47","slug":"tax-counsel-explains-intricacies-of-vivad-se-vishwas-scheme","status":"publish","type":"post","link":"https:\/\/itatonline.org\/articles_new\/tax-counsel-explains-intricacies-of-vivad-se-vishwas-scheme\/","title":{"rendered":"Tax Counsel Explains Intricacies Of &#8216;Vivad Se Vishwas Scheme&#8217;"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/itatonline.org\/articles_new\/wp-content\/uploads\/firoze-andhyarujina.jpg\" alt=\"firoze andhyarujina\" width=\"78\" height=\"100\" class=\"alignleft size-full wp-image-4280\" \/><strong>Senior Advocate Firoze Andhyarujina delivered a lecture in which he has explained all the nuances and intricacies of the &#8216;Vivad Se Vishwas Scheme in a detailed manner. The learned counsel has pinpointed the pitfalls in the scheme and also offered valuable suggestions on how they can be resolved so as to attain the laudable objective of the Government of eliminating the backlog of disputed cases<\/strong><\/p>\n<p>Mr. Firoze Andhyarujina, Senior Advocate,  Bombay High Court was invited by the Chamber of Tax Consultants, Mumbai on  February 14, 2020 to speak on the intricacies involved in Direct Tax &#8211;<em>Vivad  Se Vishwas<\/em> Bill, 2020 (&lsquo;<strong>Scheme&rsquo;<\/strong>). <\/p>\n<p><!--more--><\/p>\n<p><iframe loading=\"lazy\" width=\"560\" height=\"315\" src=\"https:\/\/www.youtube.com\/embed\/NyigzRxJxyc\" frameborder=\"0\" allow=\"accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen><\/iframe><\/p>\n<p>The subject being very important the Learned  speaker has analysed various provisions of the Scheme. A gist of his speech  along with the video is hosted for the benefit of the readers.<\/p>\n<p>The speaker begins with emphasis on the  government&rsquo;s efforts to widen the tax base with a view to ensure more people  pay their fair share of taxes. He has also coined the term &lsquo;directional budget&rsquo;  as there is a lot of emphasis on agriculture, animal husbandry, climate change,  biosphere, infrastructure and education etc. Further he believes, with respect  to the amendments provided in the Finance Bill with respect to direct taxes are  not inspirational. He welcomes the Scheme as a step in the right direction for  reduction in litigation, payment of taxes, improvement in compliance and most  importantly to have faith in the government.<\/p>\n<p>In para 126 of the Budget speech proposes a  &lsquo;scheme&rsquo; a taxpayer would be required to pay only the amount of the disputed  taxes and will get complete waiver of interest and penalty provided he pays by  31st March, 2020. Those who avail this scheme after 31st March, 2020 will have to pay some additional  amount. The scheme will remain open till 30th June, 2020.The highlights\/ issues  discussed by the speaker are an under:<\/p>\n<p><strong>1. Scheme vs Bill<\/strong><\/p>\n<p>For the first time in the history of India  an amnesty scheme has been introduced as a Bill which will become an act after  passing through the legislature and after receiving the assent of the  President. The <em>Vivad Se Vishwas Scheme <\/em>is being introduced not as a  delegated legislation but rather directly by the legislature which shows the  intention of the government with respect to the enforceability of the Scheme<\/p>\n<p><strong>2. Pending Appeal<\/strong><\/p>\n<p>As the scheme applies to cases which are  pending with the Commissioner of Income tax (Appeals) (&lsquo;<strong>CIT(A)<\/strong>&rsquo;), Income  tax Appellate Tribunal (&lsquo;<strong>ITAT&rsquo;<\/strong>), High Court or Supreme Court as on the  31st day of January, 2020 (&lsquo;<strong>cut-off date<\/strong>&rsquo;).<\/p>\n<p>A question arises with respect to the matters  for which order has been received prior to the cut off date, however the  assessee is yet to file the appeal and the statutory period for filing of  appeal is not yet exhausted.<\/p>\n<p>In the speaker&rsquo;s opinion, such cases must be  covered within the ambit of the Scheme.<\/p>\n<p><strong>3. Delay in filing of Appeal<\/strong><\/p>\n<p>Reiterating, As the scheme applies to cases  which are pending with the CIT(A), ITAT, High Court or Supreme Court as on the  31st day of January, 2020.<\/p>\n<p>A question arises for appeals which were  filed before January 31, 2020;  however, a delay exists in filing of the appeal as per the respective statutory  provisions and the application for condonation of delay has not been disposed  of. Can such cases avail the benefit of the Scheme.<\/p>\n<p>According to the speaker, such cases must be  covered within the ambit of the Scheme.<\/p>\n<p><strong>4. Set aside proceedings<\/strong><\/p>\n<p>An issue arises where the matter is remanded  back to the Ld.&nbsp; Assessing Officer (&lsquo;<strong>AO&rsquo;<\/strong>)  by the Tribunal (mostly) for de novo proceedings, whether the same will be  covered within the ambit of the Scheme.<\/p>\n<p>The speaker  visualises 3 possibilities:<\/p>\n<p>(a) Where all the issues are remanded back to the Ld. AO: As  there is no appeal pending as per section 2 (1) (a) of the proposed Scheme; The  same will not be covered within the ambit of the Scheme.<\/p>\n<p>(b) Where all the issues are remanded back to the Ld. CIT(A):  As there is an appeal pending against an order of the Ld. AO as per section 2  (1) (a) of the proposed Scheme; The same will be covered within the ambit of  the Scheme.<\/p>\n<p>(c) Where part issues are remanded back to the Ld. AO and  part to the Ld. CIT: The speaker believes the assessee must be allowed to take  up the matters pending with the Ld. AO to the Ld. CIT(A) so as to facilitate  him to avail the benefit of the Scheme.<\/p>\n<p><strong>5. Orders pronounced post February  4, 2020.<\/strong><\/p>\n<p>Reiterating, As the scheme applies to cases  which are pending with the CIT(A), ITAT, High Court or Supreme Court as on the  31st day of January, 2020.<\/p>\n<p>A question arises with respect to the matters  which were heard before January 31,   2020 and the order has been passed after February 4, 2020. Will such cases be able to take  advantage of this Scheme?<\/p>\n<p>According to the speaker, such cases must be  covered within the ambit of the Scheme.<\/p>\n<p>However, precaution must be taken to ensure  that the CIT(A) does not pass a high pitched assessment after the budget  speech.<\/p>\n<p>Further, in the event a Miscellaneous  application is filed against an order of the Tribunal, in a case which was  heard before the cut off date but order has been passed after the budget  speech. It must be understood that a Miscellaneous application revives the  appeal which pending before the Tribunal and therefore such cases must be  covered within the ambit of the Scheme.<\/p>\n<p><strong>6. Term &ndash; &lsquo;appellant&rsquo;<\/strong><\/p>\n<p>This point is made to clarify that although  the term used is &lsquo;appellant&rsquo; and the same has been defined under section 2  (1)(a) of the Scheme. There is a clarification provided under section 4 (3) of  the Scheme to include Writ petitions and SLPs<\/p>\n<p><strong>7. Term &ndash; &lsquo;appellate forum&rsquo;<\/strong><\/p>\n<p>This point is to clarify that appellate  forums have been well defined. The proceedings before Settlement Commission and  the Authority for Advance Ruling will not form a part of this Scheme.<\/p>\n<p>However, proceedings before the Dispute  Resolution Panel should be brought within the ambit of the Scheme as the  objections are raised against a draft order of the Ld. AO.<\/p>\n<p><strong>8. Departmental appeal<\/strong><\/p>\n<p>This point is to clarify that, in cases where  there is a departmental appeal, the assesee should evaluate the tax effect of  the appeal and that even in the event of a departmental appeal, it is the  assessee who would apply for the scheme.<\/p>\n<p><strong>9. Year on year issue<\/strong><\/p>\n<p>This point is to clarify in the event the tax  payer has a year on year issue which is debatable and on that basis the case is  selected for scrutiny. Merely because the assessee has chosen to avail the  scheme to buy peace of mind, does not amount to admission on the part of the  assessee. This is also clarified vide Circulars.<\/p>\n<p><strong>10. Cross Appeals<\/strong><\/p>\n<p>This point is to  clarify in the event the assessee and the department are in appeal. The cross  appeals do come within the ambit of the scheme and both the appeal should be  treated together as a whole<strong><\/strong><\/p>\n<p><strong>11. In event assessee is still in  loss post assessment<\/strong><\/p>\n<p>This point is to  clarify in the event theassessee is in a loss even post assessment. The  assessee will be subject to double jeopardy under the scheme as he will have to  make a payment under the scheme and on the other hand will not be allowed to  carry forward the losses.<\/p>\n<p><strong>12. Re-opening proceedings<\/strong><\/p>\n<p>This point is to advise that in reopening  proceedings, where the interest component is high and matter does not seem to  be strong on merits. It is advisable to take shelter of the Scheme.<\/p>\n<p><strong>13. Simultaneous TDS and Quantum  proceedings<\/strong><\/p>\n<p>An issue would arise where the deduction of  TDS is a debatable issue and the proceedings are on going before the CIT (TDS),  on account of which the expenses have been disallowed and the same are pending  before the CIT(A) or higher authorities. Availing the Scheme would amount to  double taxation, in such cases.<\/p>\n<p><strong>14. Doctrine of relation back<\/strong><\/p>\n<p>Doctrine of Relation Back&nbsp;is a principle  that something done today will be treated as if it were done earlier. According  to the speaker, this principle needs to be applied while computing interest and  penalty as interest accrued during pendency of appeal or penal leviable cannot  be taken into account for the purpose of the Scheme<\/p>\n<p><strong>15. Discrimination<\/strong><\/p>\n<p>The speaker illustrates a small example of a  Partnership firm with two equal partners both being assessed at Rs. 150 each.  The first partner to buy peace of mind pays the amount of Rs. 150. However, the  second one chooses to appeal against it. The second partner will be able to  avail the benefit of the Scheme as he has an appeal pending for the purpose of  the Scheme. According to the speaker, this amount to discrimination, and  unequal treatment.<\/p>\n<p><strong>16. Inconsistency in the provisions  of the Scheme<\/strong><\/p>\n<p>Section 4 (3) of the Scheme uses the term  &lsquo;appellate forum which is defined under section 2(1) (b) of the Scheme which  includes the Ld. CIT(A) and Hon&rsquo;ble ITAT and requires the assessee to seek  leave of the Court to withdraw the appeal along with a declaration. However,  Section 4(2) confers a deeming provision with respect to the withdrawal of the  appeal before the CIT(A) and Hon&rsquo;ble ITAT. Thus there is inconsistency between  Section 4(2) and 4(3) of the Scheme.<\/p>\n<p><strong>17. Waiver of rights<\/strong><\/p>\n<p>With a view to clarify, although the Scheme  envisages a provision for waiver of all rights once the assessee chooses the  scheme for a particular appeal, nothing precludes the assessee from filing a  second application under the scheme in the event the first application is  rejected. <\/p>\n<p><strong>18. Prosecution<\/strong><\/p>\n<p>With a view to clarify, availment of the  Scheme for a particular appeal ensures that there is no prosecution launched  for the particular year under consideration. <\/p>\n<p><strong>19. Section 9 of the Scheme i.e.  non-application in certain cases<\/strong><\/p>\n<p>The speaker believes that debarring search  and seizure cases from the ambit of the Scheme is discriminatory. Further,  where there is a break in the block assessment, the appellant is at liberty to  avail the scheme for that period which is under assessment.<\/p>\n<p>Further, prosecution matters to also be  included within the enhancement of the scheme. The speaker provides  clarification with respect to section 9 (c) of the Scheme to explain that the  application of the allied laws will apply only to the extent of its  implications on the Income tax Act, 1961 and not in absolute sense.<\/p>\n<p>The Speaker welcomes the Scheme and considers  it as an opportunity to come clean even in demonetization cases, penny stock  cases, reopening cases where interest component would be high. This Scheme will  fulfil the aspirations of the government and improve tax collection.<\/p>\n<table width=\"103%\" border=\"1\" cellpadding=\"5\" cellspacing=\"0\" bgcolor=\"#FFFFCC\">\n<tr>\n<td><strong>Disclaimer: <\/strong>The  contents of this document are solely for informational purpose. It does not  constitute professional advice or a formal recommendation. While due care has  been taken in preparing this document, the existence of mistakes and omissions  herein is not ruled out. Neither the author nor itatonline.org and its  affiliates accepts any liabilities for any loss or damage of any kind arising  out of any inaccurate or incomplete information in this document nor for any  actions taken in reliance thereon. No part of this document should be  distributed or copied (except for personal, non-commercial use) without  express written permission of itatonline.org<\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"<p>Senior Advocate Firoze Andhyarujina delivered a lecture in which he has explained all the nuances and intricacies of the &#8216;Vivad Se Vishwas Scheme in a detailed manner. The learned counsel has pinpointed the pitfalls in the scheme and also offered valuable suggestions on how they can be resolved so as to attain the laudable objective of the Government of eliminating the backlog of disputed cases<\/p>\n<div class=\"read-more\"><a href=\"https:\/\/itatonline.org\/articles_new\/tax-counsel-explains-intricacies-of-vivad-se-vishwas-scheme\/\">Read more &#8250;<\/a><\/div>\n<p><!-- end of .read-more --><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[],"class_list":["post-6633","post","type-post","status-publish","format-standard","hentry","category-articles"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/posts\/6633","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/comments?post=6633"}],"version-history":[{"count":0,"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/posts\/6633\/revisions"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/media?parent=6633"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/categories?post=6633"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/articles_new\/wp-json\/wp\/v2\/tags?post=6633"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}