Answers to queries on Vivad Se Vishwas Scheme

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The Union Honourable Finance Minister, Mrs Nirmala Sitharaman during her budget speech on February 1, 2020 (2020) 420 ITR 115 (St) (146) proposed to introduce a scheme at para 126 of the speech for settlement of disputes. Subsequently, the Direct Tax Vivad Se Vishwas Act, 2020 (VSV Act) was introduced. The Scheme was extended from time to time and the last date for payment under the VSV Act, 2020 extended until October 31, 2021 by CBDT, vide Notification No. 75 of 2021 dated June 25, 2021 (2021) 435 ITR (St) 25. The said scheme has benefited the taxpayers to reduce the tax litigation. When the scheme was introduced the research team of the itatonline.org had anticipated that the taxpayers may require a number of clarifications. Itatonline.org had requested the panel of experts consisting of Dr. K. Shivaram Senior Advocate, CA Rajan Vora and CA Pradeep Kapasi to answer queries arising on Vivad Se Viswas Schme to assist the tax consultants and tax payers. The expert panel started answering the queries raised by the tax consultants on February 28, 2020 and till date the expert panel have answered more than 750 questions only on the Direct Tax Vivad Se Viswas Act, 2020. From May 15, 2021 on words the itatonline.org has introduced the new section on “Ask your questions” which answers questions regularly. It is proposed that this new panel will answer the questions pertaining to Direct Tax Vivad Se Viswas Act, 2020.
See also Vivad Se Vishwas Scheme: The Law, Procedure And Dilemma where a link to all necessary resources is given

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The answers given below are in response to queries asked by other people.
Query

THE ASSESSEE HAD RECEIVED FORM 4 FOR DEPOSIT OF PAYMENT DUE. HOWEVER DUE TO FINANCIAL PROBLEMS PAYMENT COULD NOT BE DONE. WHTHER THE EXISTING APPEAL WILL BE REVIVED AUTOMATICALY OR ANY APPLICATION HAVE TO BE MOVED FOR REVIVAL OF APPEAL.

Answer The assessee has to verify whether  the appeal is pending or already order has been passed . If the order is passed the assessee has to make an application for restoration of appeal . If the appeal is pending for  hearing, the  notice has not yet received,  the assessee has to contest  the appeal on… (read more)
Query

Sir,

We had filed appeal for which we opted for VSVS Scheme, Form 5 has been received and the Payments have been made in full. Appeal withdrawal has also been received. In the Order Penalty u/s 271 F was initiated for not filing the income. The same still remains valid or Section 6 r.w.r Section 5 of VSVS Rules/Act will be applicable? In the scheme no penalty if scheme is availed. Please clarify whether penalty is leviable.

Answer The  assessee has to furnish reply on merit ,  what was the  reasonable cause for not filing of the return as per section 139 (1) of the Act . As per section 273B  penalty is not leviable  if the assessee proves that there was reasonable cause . Please refer Circular No . 21/2020 dt .4th … (read more)
Query

Respected Sir/Ma’am,

as the assesse consultant done wrong calculation w.r.t deposition of taxes with additional 10% interest(paid after due date i.e. September 30, 2021) and the assesse has deposited wrong taxes and submitted form 4. The form 4 is now rejected. Is there any way out so that the assesse gets relief because there is not fault of assesse?

Answer Declaration can be revised any number of times before the DA issues a Certificate under section 5(1) of Vivad Se Vishwas .   Please  refer question No  Circular No. 9 /2020 dt 22 -4 2020  Q.No. 46 . Whether DA can amend his order to rectify any patent errors .? Ans . Yes , the DA … (read more)
Query

I went for VIVAD SE BISWAS SCHEME where will my Certificate no.5 will be sent, as i have not received as yet. where can i view it. Is their option to see this on IT portal.

Answer The assessee is requested to write to the Designated Authority. If no reply is received within  a reasonable time the assessee may approach High Court by filing writ petition .       (read more)
Query

There was a mistake in order u/s 143(3) passed by AO. Assessee filed an appeal on other grounds( before the CIT(A) and ITAT and subsequently OGE was passed by AO giving effect to the orders of CIT(A) & ITAT. Timelimit for filing rectification application passed. Can Assessee or AO file rectification petition against ITAT order for the purpose of rectifying mistake in order 143(3){for the matter not covered in appeals} if timelimit for filing rectification u/s 154 against ITAT order is not yet completed.

Answer The rectification application u/ s 254 (2) of the Act  can be filed  only in respect of mistake in the order of the Appellate Tribunal . It has to arise from the order of the Appellate Tribunal .   (read more)
Query

Partner had debit balance in partners capital account. He left the firm without paying overdrawn amount to the firm. Can partnership firm claim this as business loss or unrecoverable loan and write off the said amount in profit & loss account.

Answer : At the time of retirement, a deed of retirement would have been executed, according to which the partner’s capital account would have been fully and finally settled. Therefore, loss on settlement, if any, would be a capital loss.      (read more)
Query

If a NRI sends remittance more than Rs.7 Lacs from his bank account maintained in India. Wether TCS of 5% will be applicable on him. Pleas Guide

Answer The provisions of Tax Collected at Source on Foreign remittance should not be applicable to a Non-Resident remitting funds to and from India through their NRE bank account or through NRO bank account under the remittance of assets scheme.   However, as there is no clarity on the issue or any judicial pronouncement. The Hon’ble… (read more)
Query

Whether the assessment can be opened for the years in which assessee has opted under DTVSV Scheme in case of retrospective amendment of disallowance of education cess while computing Business income, wherein Education cess was not the covered matter under VSV.Whether due to amendment, assessment can be opened to disallow the claim of education cess.

Answer In Sudhir S.Mehta ( 2003 ) 265 ITR 548 (Bom) (HC)  the Court held that where amending law received assent of President subsequent to date of Tribunal’s order ,  on the basis of retrospective amendment , the Tribunal’s order cannot be said  to suffer from mistake apparent from record .    As per section 5 (3)… (read more)
Query

challans have been fully paid still however Form 5 has not bee received what should we now do.

Notice of penalty is issued due to non submission of Form 5

Answer The assessee may write to the Designated  Authority to issue the Form no 5. In case no response is received  with in 15 days the assessee may write to the Chairman CBDT . Even after writing to CBDT no response is  received  with in 15 days  the assessee may file writ before the High Court. … (read more)
Query

Sir, in my case form 5 has been issued by CIT, thereafter i received a notice from department for rectification u/s 154 for enhancement of tax and interest on the mistake apparent from record. Mistake pointed out by department is correct. Can the department enhance the demand after issuance of form no. 5 ? Kindly assist. A quick response is highly appreciable.

Answer Any Authority which has passed the order  has  inherent  power to rectify the mistake apparent from the record . When  the Act does not prescribe any time limit to pass the rectification order ,  it has to be within  a reasonable time   The error has to apparent from record.   Debatable issues cannot be rectified as… (read more)