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

Appeal with CIT(A) was pending as on 31st Jan 2020 but it was dismissed by CIT (A) in October 2020. I filed FORM 1 & 2 of VSVS and got FORM 3. Now Where & with whom to file application for withdrawal of appeal of appeal as envisaged in Form 4. PLease confirm asap and oblige.

Answer Since the appeal is pending before CIT(A), the same is deemed to be withdrawn. There is no requirement to file an application of withdrawal of appeal (read more)
Query

I want to settle my case under VSVS . I want to know if I settle my case under VSVS will that year income be counted as earned money of that year in my ITR?
My CA told me the income will not be generated if we settle the case under the VSVS.
Can I rectify my ITR after availing the benefit of VSVS or Should I settle the case appealing to the tribunal?
Answer VSVA is only with respect to settlement of disputed and not an amnesty scheme. It only provides an option to settle appeals on contentious issues that are neither accepted by the Department nor the assessee.  stating that the accounting entries will be independent and would not be saved by the scheme. The Assessee cannot rectify… (read more)
Query

As per ITR i am suppose to get refund. but it got adjusted in the demand tax as per computation in the order u/s 143(3).
Now while filing VSV form, my disputed tax will be tax before interest less the original self assessment tax.
how should i treat the refund adjustment done by the department in the order.
Should i reduce the disputed tax to an extend of refund adjusted or is there any other treatment?
because the form 1 asks details about tax on disputed income , which is the tax before interest and after cess, less the original self assessment tax paid.
please help me as soon as possible because assessing officer has asked me to file the form in a day
Answer Yes, under VSVA, interest amount is waived, any amount paid would be set off against disputed tax amount. Therefore, the refund amount which has been adjusted against the order under section 143(3) of the Act has to be given effect against the disputed tax amount. Yes, under VSVA, interest amount is waived, any amount paid would… (read more)
Query

The department has filed a miscellaneous applications after the case was declared in favour of assesse!
I have received the refund amount and no demand is pending !
Can we opt for the scheme for miscellaneous applications
Answer The MA can be settled under the Scheme only if the same is dismissed in limine i.e. at the beginning of the proceedings. This has been clarified at FAQ No. 61 of CBDT Circular No. 21 of 2020 dated December 4, 2020. The Miscellaneous application of the Revenue may be dismissed  as  per the ratio laid… (read more)
Query

I refer to Question 80 of FAQ wherein it is mentioned that appeal in respect to penalties which are not in relation to quantum assessment needs to be settled separately.

For one of my client, we have received penalty notice under section 271(1)(c), 271AA and 271G, here it is important to mention that penalty is only initiated and no penalty order is yet passed by the AO. Our clients are going in VsV for quantum appeal.

If our clients opt for VsV for quantum whether penalty under section 271(1)(c), 271AA and 271G which was initiated but not levied would be waived off?
Answer Please refer 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 tax?  Ans . No, appeal against such penalty order is required to be settled separately. In the said answer the… (read more)
Query

I have filed the details and am awaiting issuance of Form 3 by CIT. How many days does it take for the CIT to issue form 3. Is there something that needs to be done at the assessee’s end after he has submitted the forms. The system show this message: “Awaiting Form 3 from CIT”
Answer  The declarant has to await he receipt of Form 3. There is a delay in issuance of Form 3  in  few cases  of declarants under VSVA.   (read more)
Query

Dear Sir,
(NON SEARCH CASE)
Form 1 is filed with respect to Disputed Tax with CIT Appeals.
Total Demand as per Order assume Rs 100/-
out of which interest is Rs 20/-
Then , Disputed Tax is Rs 80.

We have Filled Schedule 1, where we have shown Disputed Tax of Rs 80 & Disputed Interest of Rs 20/-. Therefore, Tax payable for VSV will be Rs 80. (is this Treatment correct).

Error is showing:-
1. Fill Tax payable amount in search case payable before 31.03.2020 and after 31.03.2020. (Here , we have stated amount as 0.)
2. Other Error – Fill Schedule D. (where we have filled all as 0).
We could not detect the error.
Kindly resolve the issue as soon as possible.
Thank you in advance.
Answer This is a common technical error being faced by declarants and consultants. Kindly try keeping the search columns empty and not as “0”. If error still persists, it is advisable to contact your designated authority under VSVA. In case no response is received the Assessee may file writ before High Court .   (read more)
Query

As per Q No. 25 of FAQ of 4th Dec the effect of Pending rectification can be adjusted in the disputed Tax amount. What if the rectification is rejected in case of pending rectification where there will be a reduction in Tax liability on account of the pending rectification
Answer In the event of rectification, the declarant has no choice but to accept the Order of the Department without changes. If the error is apparent and on the face of the Order, the declarant could also consider filing a Writ Petition before the High Court. (read more)
Query

Dear Sir,
For filing of form 1, against the Demand raised by CPC vide Intimation U/s. 143(1)(a)(iv), which section is to be selected. Scroll down box does not includes Section 143(1).

Answer This is a common technical error being faced by declarants and consultants.  Department must have  made correction after the circular No 21 of 2020 dt  4-12 -2020 , Ans  to Q.No 71  Ans .   Appeal filed against intimation u/s 143(1) of the Act is eligible under Vivad se Vishwas if adjustment has been made under… (read more)
Query

ITAT set aside the order to AO for assessment before 31/01/2020.Can assessee avail of
VSVS.
Answer  Yes it can be considered as deemed appeal , hence  the the declarant is eligible for VSVA (read more)