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

While filling form no 1 , it asks for the section under which the order was passed. The order was passed by the AO under section 143(3) and the last appellate order was passed by the ITAT u/s 254. The department is in appeal in the high court. Which section to select : 143(3) or 254.
Thanks
Answer The Order to be settled under VSVA is the departmental appeal pending before the High Court, assuming the same was pending as on January 31, 2020. Particulars of the said High Court appeal is to be furnished. (read more)
Query

How to provide details of the payment made through set off the disputed penalty amount against refund of the subsequent assessment years in Part C
Answer You may write the date of adjustment made by the revenue as per the intimation received by the asessee . In case of difficulties the assessee may approach the designated Authority (read more)
Query

HI, CAN WE REVISE FORM 3 AS PER NEW RULES. WE HAVE FILED THE FORM CORRECTLY WHICH WAS OKAYED AND PROCESS REACHED FORM-3. NOW IT0 IS RAISING A NEW DEMAND WEF 31.03.2020 . THIS DEMAND WAS NIETHER COMMUNICATED TO US AND IS ALSO NOT AVAILABLE ONLINE. ITO IS CREATING PRESSURE TO REVISE IT. WHETHER WE ARE BOUND TOREVISE IT. WHAT IF WE DONT DO THE SAME. CAN HE HARASS US BY OTHER WAYS.
Answer You are at the liberty to file a fresh declaration under VSVA. There is no express bar from refiling. (read more)
Query

A Private Limited Company filed return within time for A.Y. 2012-13 declaring NIL income. The assessee is a civil contractor. The company did not deduct TDS on payment made to sub-contractor, rent on machinery, interest on loan and salary to director. The books could not be produced as there was fire. The AO disallowed the total payments made to sub-contractor, rent on machinery, interest on loan and salary to directors.
The AO also disallowed 10% of the amount of total receipt by the company less the above four payments i.e. payment to sub-contractor, rent on machinery, , interest on loan and salary to directors. The CIT (Appeal) dismissed the appeal of the assessee and confirmed the addition made by the AO. It is an auditable case u/s 44AB. W.E.F. 01.04.2015, u/s 40(a)(ia) only 30% of the amount is disallowable in the TDS has not been deducted or after deduction not deposited. Please let us know whether the benefit of 30% disallowable u/s 40(a)(ia) can be taken in A.Y. 2012-13 i.e. retrospectively. Whether the assessment can be made at the rate of 8% on total turnover or should the assessee go for VSVS. The amount disallowed is approximately Rs. 2.00 Crs. Rs. 1.45 Crs due to TDS and Rs. 55.00 Lacs 10% of total turnover minus amount on which TDS not deducted. Please advise whether the assessee should go for VSVS or should fight appeal in ITAT.

Answer In Kachwala Gems v. Jt. CIT (2006) 206 CTR 585 / (2007) 288 ITR 10 / 158 Taxman 71 / 196 Taxation 738 / AIR 2007 SC 487 (SC) the Apex Court held that  even though there is always a certain degree of guess work in a best judgment assessment, the authority should try to… (read more)
Query

We had returned a net loss of Rs. 12,00,000/- for the AY 2016-17. During the course of assessment u/s. 143(3), there was an addition to the tune of Rs. 30,00,000/-. So, the net income was assessed at Rs. 18,00,000/-. The appeal is pending as on 31.01.2020.

Out of the returned loss of Rs. 12,00,000/-, we have already set off a loss of Rs. 5,00,000/- in the AY 2017-18 and the balance loss of Rs. 7,00,000/- is still available as on date. We do not foresee any profits in the subsequent years to set off the balance loss of Rs. 7,00,000/- and it is bound to lapse.

In this scenario, what is the disputed income for which we have to file the application under DTVSV Act for the AY 2016-17?
Answer As per VSVA, in a case where the dispute in relation to an assessment year relates to reduction of Minimum Alternate Tax (MAT) credit or reduction of loss or depreciation, the appellant shall have an option either to (i) include the amount of tax related to such MAT credit or loss or depreciation in the… (read more)
Query

Assessee case was reopened u/s 148 on some grounds for AY 2010-11 AR attended the hearings but before AOcould conclude and pass an order reoopeing was challenged with writ in high court. Till date no orders has been passed by High court. Can Assesse settle the same in Vsvs scheme on the basis of reasons recorded and mentioned for reopening of the case u/S 147/148
Answer Please refer  Circular No 9 of 2020 dt 22. 4 .2020 ,Q.  No 12  If a writ has been filed against a notice issued under section 148 of the Act and no assessment order has been passed consequent to that section 148 notice, will such case be eligible to file declaration under Vivad se Vish… (read more)
Query

declaration form of vivad se vishwas is rejected by CIT without given any reason

what remedies is available with assessee

declaration in respect of disputed TDS interest and penalty

further while filing form again schedule B of the form 1 is not active

Answer There is no remedies under VSVA. The declarant can file a Writ Petition before the High Court. (read more)
Query

The demand on 31.jan.20 was deleted by cit (a) in the month of August 20. Can the appellant buy peace by paying 50% of the disputed demand,
Answer If the assessee wishes the Demand as on Jan 31, 2020 i.e. AO order can be settled under VSVA. Please refer Circular No 21 /2020 dt 4 -2 2020 Q. No 56: Appeal or arbitration is pending with appellate authority as on 31 St Jan 2020 (or time for filing has not expired as on 31St Jann… (read more)
Query

The following field appears in Form 1 in part F. (This is visible in print out taken in PDF version of Form No.1 already filed. But this field is not visible in online Form l

Part F
v) The following refunds have been determined but are
unpaid- these may be considered for adjustment against the
Net tax payable in Part F
S. No. Assessment Year Order Reference number / DIN if
any
Amount of Refund determined

Query 1. How to fill information under this F (v) field
2. Whether refunds due for different assessment years can be adjusted against tax payable under VSVS
Answer In case of any technical difficulty it is advisable to approach your designated authority under the Act. As per VSVA, in a case where the dispute in relation to an assessment year relates to reduction of Minimum Alternate Tax (MAT) credit or reduction of loss or depreciation, the appellant shall have an option either to… (read more)
Query

1. What are the documents need to be attached for vivad se vishwas scheme after filing form1 and 2

2. amount is payable after availing benefit of vivad se vishwas so can i make the payment through challan

3. The form 35 for the year 2008-09 have been filed manually so we do not have the acknowledgement no. in that case is it mandatory to fill in acknwldgmnt no.
Answer One need not attach the documents , but the form has to be filed properly .If there is no acknowledgement no , the assessee may refer the date of filing of appeal . In  case the assessee is not able to  host the form , the assessee may approach the Designated Authority . (read more)