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

Sir, I have received form 3 in September with net tax liability adjusted with refund adjusted till AY 2019-20.
Now on tax portal my tax refund of AY 2020-21 appears adjusted from disputed tax liability which I have opted to settle under vivad se Vishwas which is lower than the amount appearing in Form 3.
Pls advice which amount to be paid. Can I net off the tax liability for refund of AY 2020-21
Answer 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 , DA shall  be able to amend his order under section 5 to rectify any apparent errors . Please also  refer  CBDT  circular Q. No.… (read more)
Query

I have applied in vivad se vishwas scheme. My disputed tax is approx 4 lakh the payment has to be done before 30/4/2021 if not then interest will be charged. My problem is if i give half payment of 2lakh before 30/4/21 and half afterwards what will be interest percentage charge and on what amount it will be charge (the remaining amount or on the full disputed tax amount). Can i payment half amount before 30/4/21 and half after the above mentioned date
Answer Please  refer Circular No 18 /2020 dt 28 -10 -20220 , circular in respect of payment of tax . As per the Circular the declarant can make the payment without additional amount on or before 31 St March , 2021 ( Now extended up to 30-4-2021 )     Please also refer Circular No 21 /2020 dt… (read more)
Query

Assessee filed Form 1 and Form 2, in respect of an appeal before Commissioner of Income-tax (Appeals) claiming refund of Rs.20 (say). The Designated Authority has issued Form 3 determining refund due of Rs.10(say).Before filing the Form 1 and Form 2, the assessee had moved rectification application under section 154 requesting the Assessing Officer to rectify the order passed under section 143(3). The Assessing Officer rejected the rectification application before furnishing his report to the Designated Authority. Designated Authority, while passing Form 3, stated that the Assessing Officer has rejected the rectification application, thus justifying the lower refund of Rs.10.
Answer The Designated Authority is right in determining the refund at Rs 10 . The assessee may have to file an appeal before the CIT(A) against the rectification order  rejecting the application passed by the Assessing officer .  (read more)
Query

Pected sir
My father select se VSV scheme he has two case he also mentally ready to pay outstanding amount on or before 31st March and he also planned to arrange the Funds.

But suddenly he died on dt 16-02-2021 the text amount found in our current account and also saving account but by father’s WILL not registered as well as the witness signature is pending in WILL.

After death of my father, my father’s all accounts freezed by bank and they demanded us probeta or succession certificate from court
We consult some lawyer regarding to this matter and as per their statement certificate may be received after 6 month or 8 month.

The text amount is huge and our family can not arrange this amount.

We also request to branch level regional office level and head office level but they said that do not permit to pay the vsv scheme payment they also said that if income tax Department send any demand or attachment on this account then can release this fun
Now our family want to to fulfill my father’s liabilities as soon as possible so please give us guidance for our dues how to pay.
rksarvaiya99@gmail.com
Answer We presume that the father has filed the  Declaration under  Vsv Act and all other  conditions of the Vsv Act is satisfied .  In case the father has given nomination in favour of any person the Bank has to transfer the amount to the nominee refer Ram Chander Talwar v. Devendra Kunar Talwar ( 2020)… (read more)
Query

By mistake We have paid in excess of tax payable as per Form-3 of Vivad se Vishwas scheme. Can we get refund of excess amount of tax paid after filing of form-4 /
Answer As per explanation to section 7 of VSVA, it is clarified that where the declarant had, before filing the declaration, paid any amount under the Income-tax Act in respect of his tax arrears which exceeds the amount payable under VSVA, he shall be entitled to a refund of such excess amount,  but shall not be… (read more)
Query

Dear team,

is it possible to opt vivad se viswas scheme for a case rejected with CIT (A) appeals

Answer One of the condition is that the  pendency of Appeal before the appellate forum as on 31 -1 -2020 or pendency of deemed appeal .  Refer Circular No 9 dt 22 -4 -2020 Q .N0 1 and Answer.  Please  also refer Circular No 21 dt 4 -12-2020  Q. No. 56 and Answer. As per the… (read more)
Query

Filed F-1 and 2, received Form-3 but it was not mine but some unknown person.

Complained, 1st time, they simply resolved by saying “please look your attached Form-3”. I looked to the form-3 but it was not mine.
I again wrote in detail on 18/03/2021 to send the corrected Form-3. Till date it is not resolved. How Tax should be paid or should I wait even after 31.03.2021 to receive proper Form – 3 and then pay.
Thanks.
Answer Please refer CBDT  Circular No. Circular No 9/2020 dt 22-4 -2020   . Q. No 46 and answer , wherein the CBDT has stated that Designated Authority shall able to amend his order under section 5 to rectify any apparent errors. The assessee may write to the Designated Authority  .   Please refer Circular No 21 /2020… (read more)
Query

Returned business loss has been converted to income and set off against brought forward business loss. Similarly addition under the head capital gains set off against brought forward unabsorbed depreciation. If we opt for VSVS , whether tax has to be paid for disputed additions

Answer The assessee has to pay the tax on disputed additions. Please refer Circular No 9/2020 dt 22-4 -2020  Q. No. 53 and Answer given by CBDT  wherein it is stated that  to carry forward the reduced tax credit or loss or depreciation . CBDT will prescribe the manner of calculation in such cases .   (read more)
Query

I HAVE RECEIVED FORM 3 IN RESPECT OF FORM 1 AND 2 FILED for APPEALS PENDING RELATING TO PENALTY.
WHILE MAKING PAYMENT FOR THE SAME, SHOULD I ENTER THE AMOUNT IN “PENALTY” BOX IN 280 CHALLAN UNDER CODE 400 (TAX ON REGULAR ASSESSMENT) OR IN “TAXES” BOX/ OR IN “OTHERS” BOX OF THE 280 CHALLAN.
Answer It will be regular assessment tax challan , with minor head 400 . Write properly the PAN  NO and Assessment year . There is no separate Challan  has been prescribed .   (read more)
Query

Sir,
I had a demand from government and have settled it under vivaad se vishwas. I have paid government the demand of 3 lakhs.so,will my capital account now be increased by around 10 lakhs,as I have paid government tax for the unaccounted capital. If yes,how will it be done?
Answer Please refer Circular No -21 /2020 dt 4 th December , 2020  Q. No          81 and Answer given by  CBDT , it is clarified that the Vivad Se Vishwas is not an amnesty scheme  .It provides an option to settle appeals on contentious issues that are neither accepted by the Department nor the Assessee. … (read more)