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 had anticipated that the taxpayers may require a number of clarifications. 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 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.

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)

We have paid 25% of penalty tax by availing Vivaad Se Vishwas Scheme.
We had filed petition in HC against income tax. How to withdraw case from HC now? Mere application is enough or have to appoint advocate for withdrawal of case or we can do the same. Previous advocate has shifted from mumbai so have to manage by us. Pls guide.

Answer The assessee has to move an application before the  Tax Bench of the  High Court for withdrawal of appeal giving the details of appeal No ,  tax paid and  certificate received from the competent authority . The said application also  be served on the Assessing Officer who has jurisdiction over the assessee. The matter will… (read more)

Assessed receive order under section 143 3 and filled his form 35 for appeal and assessing officer sent to form to CIT ANY REPLY WAS NOT YET RECEIVED ONE QUESTION IS MY QUARY IS IN WHICH SECTIONS ARE IMMUNITY OF THE SCHEME

Answer Section 6 of The Direct Tax Vivad Se Vishwas Act , 2020 deals with immunity from initiation of proceedings in respect of offence and imposition of penalty in certain cases .    Penalty which are related to quantum of assessment will get the immunity . Please refer Circular No      Q. no 80. And answer . which… (read more)

i am v.saroja holding pan aqxpv6174d. My husband had to recieve Rs.24,60,191 refund amount through vivad se viswas scheme. after he passed away i was chosen as legal heir. but my refund is not processed. i have already filed form 4 and recieved form 5. so i filed a grievance in cpgrams. even though i havent recieved my refund. i request the department to look into this issue.

Answer Please make an application  addressing to Chairman CBDT . If no response is received , please a writ before the High Court. High Court will direct the department to issue the refund order.       (read more)

Penalty notice received even after filling under vivad se viswaas , vsv form 5 also received,what to do now

Answer The assessee has to intimate to the ,, Designated Authority / Assessing Officer stating that the assesee has availed the benefit of Vivad se  Vishwas  Scheme ,  enclose the form no 5 , details of tax paid  and request for drop the penalty proceedings . The Assessing Officer will drop the penalty proceedings .  Section… (read more)

The assessee has not filed return of income. Assessment was completed by making an addition of Rs.9,61,000.The assessee availed Vivad se Vishwas paid taxes received Form. No.5. Penalty under section 271F of Rs. 5,000/- levied. In the scheme no penalty if scheme is availed. Please clarify whether penalty is leviable.

Answer Please refer Circular No . 21/2020 dt .4th  December , 2020. ( 2020) 421 ITR 1 ( St )   Q.No 80  . Whether appeal against penalties that are not related to quantum assessment like penalty u/s 271B  271BA , 271DA of the  Act etc. are also waived upon settlement of appeal relating to ‘ disputed… (read more)

my clients filed appeal u/s 264 of income tax act for the assessment year 2015-16 and 2016-17. and i have filed vivad se vishwas application within time but application is rejected with the reason that appeal filed with in no time limit. but my appeal is still pending in department and there is no rejection of appeal

Answer The assessee has only remedy of filing  a writ before the High Court . High Court may condone the delay in filing the revision application u/s 264 and direct the Designated Authority to accept the  declaration filed by the Assessee.  In  CIT v. Shatrusailya Digvijaysingh Jadeja (2005) 277 ITR 435/ 147 Taxman 566/ 197 CTR… (read more)

The order wherein final demand was settled was passed on 21.12.2020. The Assessee filed Form 1 & 2 for VSV on 29.12.2020. However, refund of another year was adjusted with the outstanding demand vide above mentioned order. The Assessee inadvertently ignoring the amount of refund adjusted made payment of tax disputes under VSV. Please guide on how to take refund from the Income Tax Department. Have visited the Assessing Officer, but no further action from their side.

Answer The assessee may write to the Designated Authority to rectify the tax determined and refund of excess amount paid . In case no response is received within a reasonable time, the only remedy is to file writ before High Court .        (read more)

With regard to the replacement of machinery claimed as revenue expenditure by the assessee but treated as capital expenditure in the assessment by the assessing officer. The issue is pending before appeal. If the dispute is settled Under VsVs scheme can the assessee claim consequential depreciation in respect of that asset in subsequent years taking into account sec 8 of the VsVs act 2020

Answer When the  Assessing Officer treated the revenue expenditure as capital expenditure , he ought to have allowed the consequential depreciation . In. CIBA India Ltd v. CIT  1993)202 ITR 1/114 CTR 105/ 70 Taxman 505 (Bom.) (HC)  the court held that when the expenditure is held to be capital expenditure   the Tribunal ought to have… (read more)


Answer Please write to the Designated   Authority. In case no reply is received within reasonable time , the assessee may file writ before the High  Court .          (read more)