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

This section is now closed. Please ask your questions at our new Q&A section
The answers given below are in response to queries asked by other people.
Query

I have an appeal pending for more than a year with CIT but have sent email to CIT Appeal indicating that I will be opting for VSV Scheme.

I have got my VSV application approved and have paid the amount online.

Now, while trying to submit Form 4 of VSV, I need to put the details / proof of withdrawal with number and forum of the appeal. Please suggest what tom do.

Thanks.

Answer Assessee  may write the forum as CIT (A)  and date of filing of appeal before CIT (A) . If  the assessee has received the notice of hearing it contains the appeal  No  .   . The assessee may also write to the Office of the CIT (A)  to permission to with draw the appeal and may… (read more)
Query

we have received form 3 with balance amount refundable of Rs. 239631( refund amount)

now our query is how to file form 4 as in form 4 we are asking to fill details for tax paid but in our case there is refund in form 3 received

please guide us how to fill form 4 tax details in case of refund in form 3
Answer The Assessee may have to show tax payable at nil . The asseessee may also contact the designated Authority and they will guide the assessee id there is any technical difficulties in uploading the form .   (read more)
Query

How to file for the scheme, for the A.Y 2005-06 for a firm which was converted into proprietorship. Can’t see the appeal pending under proprietors PAN and since it is for 2005-06, the firm did not have an online account as well.

Answer The  date of conversion is relevant .  Whether the firm is dissolved or business is taken over by the proprietor    has to be  verified . If the appeal is of the  dissolved firm even the one of the ex partner can make an application . On line account is not a must . The ex… (read more)
Query

I have to receive refund from INCOME Tax Department under Vivad se Viswas Scheme.

I had paid all tax amount in advance and on appeal in CIT the hearing was in my favour.

I had opted under Vivad se Viswas Scheme in which I have received a final calculation from Income Tax Department and ITO ward specifying the refund amount.

I have filled Form 4 a month ago.From past 1 month Income Tax website is showing awaiting Form 5 under Vivad se Viswas tab on logging.

Fir how long do I have to wait for my refund.Is there any thing else which I need to do to get my refund.Are there any other steps which needs to be followed.Kindly let me know and help me out.
Answer Please  write to the designated  Authority to grant the refund .  In case no reply is received with in reasonable time , the assessee may have to file writ before the High Court .      (read more)
Query

I have a appeal pending with CIT(A), in case if I apply under DTVSV scheme and files a declaration. But due to financial reasons couldn’t make the payment by 31st march 2021. In this case what will happen to my appeal with CIT(A)? Would it be considered deemed withdrawn as per section 4 sub section 2 of DTVSV act 2020 or will my appeal continue to be in force with CIT appeal?
Answer Appeal will continue in force .  In Chokalingam Sudhakar v .Dy CIT ( 2020) 122 Taxmann.com 298 ( Mad ) (HC) , dealing with Section 4 of the  Direct  Tax Vivad  Se Vishwas Act 2000   has held that  , if the declaration is not in favour the assessee was given liberty to restore the appeal… (read more)
Query

The assessment pertains to long term capital gains for the AY 2014-15. The assessee is a NRI who filed his return of income belatedly on 25/09/2018 disclosing LTCGs of Rs.8,62,470/- . The assessee paid self assessment tax to the tune of Rs.3,65,390/- ( Rs.1,77,669/- towards tax and Rs.1,87,721/- towards interest portion).

The assessment was completed U/s.143(3) r.w.s 147 wherein the returned income was not considered and total income of Rs.60,15,656/- was determined as long term capital gain (assessee has no other source of income). The tax on long term capital gains was arrived along with interest and demand was raised for a sum of Rs.26,95,663/- ( Tax portion being Rs.12,39,225/- and interest portion being Rs.14,56,438/-) . As per the assessment order, the assessee was asked to pay Rs.23,30,270/- arrived at by deducting Rs.3,65,390/- paid by the assessee as self assessment tax against the total tax liability (Note : Returned income was not considered but credit was given for tax paid U/s.140A)

The assessee has gone on appeal and the same is pending for adjudication before the CIT (A)-1. The assessee has now decided to buy peace by opting for settlement under VIVAD SE VISWAS SCHEME.

My query is whether assessee can claim credit for the entire amount paid under 140A (tax portion and interest portion together) towards disputed tax?
Since the returned income was not accepted by the AO, whether there is a need to bifurcate the tax paid U/s.140A into tax portion and interest portion while adjusting against earlier tax payments made towards disputed tax demand??
Answer One has to see what is the tax in dispute is pending in appeal .  The assessee has to settle the tax in dispute . The tax paid under section 140A will be  given credit to the assessee.  The assessee may have to pay only Tax  the interests  levied  will be waived , once the… (read more)
Query

The order under section 143(3) was made and wherein entire LTCG of penny stocks was added to the income as income from other sources, and in computation sheet of tax, the same was treated as short term capital gains and tax was levied at @15%. The assessee is before appeal before CIT (A) and the same is pending as on 31-01-2020. The assessee filed declaration under DTVSV and thereafter the assessing officer issued show cause notice under section 154 of the Act to rectify the mistake and order was passed enhancing the demand of tax. Can ITO make rectification when the declaration under DTVSV is pending.
Answer There is no bar on the Assessing Officer to pass an order when the Declaration is pending before the Designated  Authority . The Assessee may have challenged the order before the CIT (A) .   (read more)
Query

I had two appeals for two different Assessment Years, AY 2010-11 & 2012-13. The issue in both the appeals was the same. For AY 2012-13 the decision was given in my favour. No second appeal is preferred by the department against the said order. So for AY 2010-11 can I apply for Vivad se Viswas Scheme on the basis that, subject matter of appeal has already been decided in my favour & without payment of tax.
Answer Please refer  Circular No 9 /2002 dt 22 -4 -2020  Q. No  28  and Answer .  If an appeal is pending before the CIT (A)   if the assessee has got favourable order from the ITAT  in earlier years  then the amount of payable shall  be half or 50% of the amount payable .   As per… (read more)
Query

I received a notice regarding an outstanding demand. In appeal, decision was favourable to me. But outstanding demand is still lying as such in IT Website. Can I do anything about this through Vivad se Viswas Scheme?
Answer As per section 2 (1)( a)  of the of the  Direct Tax Vivad Se Vishwas Act , 2020   defines the appellant . Merely  showing the outstanding demand in  IT Website the appellant is not qualified to make an settle the dispute  under the scheme .. Please also refer Circular No 9 /2020 dt 22-4 -2020… (read more)
Query

I have filed form 1& 2 where the original tax demand was Rs. 1998827/-, however the Form 3 i received from the department, the income tax authority has raised the amount to RS. 2112576/- under DTVSV scheme, thereby claiming an additional amt of 113749 without any explanation

What shall I do??
Answer Asssessee should make an application before the Designated Authority  to rectify the mistake in calculating  the tax in dispute  by the concerned authority . It is the duty of the authority to rectify the mistake . If the concerned authority does not rectify the mistake , the Assessee may have to file Writ before the… (read more)