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

I have a refund of 1 crore as per VSV in AY 2010-11 and demand of 2 crores under IT Act in AY 2011-12. If I go under VSV only for AY 2010-11, will I get cash refund of 1 crore or it will be completely adjusted against demand of AY 2011-12?
Provide basis for your answer if you have any. As per my understanding, they cannot adjust because both are separate Acts.
Answer The Direct Tax Vivad Se Vishwas Act, 2020 is code by itself . Section 245 , of the Income -tax Act , 1961  which deals with Set off of refunds against tax remaining payable under certain circumstances is not applicable to VVS Act .Accordingly the revenue cannot adjust the demand of AY. 2011-12 .In case… (read more)
Query

Can we avail the benefit of VSV scheme for the Order passed u/s 154 but the same has not bee appealed before any authority
Answer Unfortunately, no, the order under section 154 is appealable before CIT(A). An appeal ought to have been pending on the specified date i.e. January 31, 2020 to avail VSVA (read more)
Query

Dear Sir/Madam,

In Vivas se Vishwas scheme we have recieved Form 3 , now we need to pay the amount.
Whether it is to be paid under Self Assessment or Regular Assessment ?
Answer Regular assessment tax Code 400 (read more)
Query

in the case of NON PAN Assesses or the case through legal heir. there Legal Heir have the PAN but the the actual assesses has not have any PAN Allotted so this person can filed the VSV

Answer We do not see any reason why the legal heir should not be allowed to file under VSVA. In the form the assessee may  refer as legal heir and quote the PAN No of legal heir .  The  assessee may also write to the designed  Authority . In case the application is rejected the assessee… (read more)
Query

If the Assessing officer has made 3 additions to the Total Income of assessee, but the Assessee wants to avail the benefit of Vivad se vishwas scheme only for a single addition & continue the appeal for the remaining additions, then in form 1&2 of VSV, where can we specify that the total additions are Rs.42,30,056 and the only Rs.17,50,000 is for filing under VSV? kindly suggest

Answer Cherry picking of issues is not allowed in VSVA, this has been clarified in FAQ no. 14 of CBDT Circular No. 9 of 2020 dated April 22 of 2020. With respect to one order, the appellant must chose to settle all issues and then only he would be eligible to file declaration. (read more)
Query

AO raise demand of 10 lakhs without giving credit of 1lakh paid as SA tax so what is the amount of disputed tax in this case??
10lakhs or 9 lakhs
Answer From what we understand, AO has computed and raised a demand of Rs. 10 lakhs as per Form 3 of VSVA. The declarant will have to rectify the issue with the Designated Authority or else pursue a Writ Petition before a High Court against the demand. (read more)
Query

The Assessee is opting for not to pay tax and go for reduction of losses. Schedule D to be filled up. As there is NIL tax liability on account of loss return as well as assessed loss. whether to fill Schedule A ? Can we say disputed tax is NIL and disputed income is the amount of disallowance.

Answer Schedule  D form No 1  to be filed. (read more)
Query

The Assessee won the matter in ITAT but lost the matter in High Court and filed a Review which too was dismissed. Then he filed a second Review on Ground that tax amount being below 50 lacs, dept should have withdrawn the Reference from the High Court, and the Order passed by the HC ought to be Recalled.
Answer In S. C. Naregal v. CIT(2019)418 ITR 455/267Taxman563/311CTR 849 / 184 DTR 247 (SC) The High Court held that where a substantial question of law is involved, the mere fact that a monetary limit had been prescribed for filing appeals by the Department would not be a bar to deciding the appeal, and that even… (read more)
Query

In case of my client, Transfer Pricing adjustment has been made because of which my returned loss is converted into a taxable income. However, the client is having brought forward business losses which if adjusted will lead to a NIL income. The AO has also initiated penalty under section 271(1)(c), 271AA and 271G.
The AO has passed the assessment order without offsetting the previous year losses. Rectification application is filed however the order is awaited. The following are our queries.
1. Can we offset the losses at the time of filing VSV.
2. If we opt for VSV whether penalty under section 271(1)(c), 271AA and 271G would be waived off?
Answer Addressing query No. 1, As per FAQ No. 53 of Circular No. 9 of dated April 22, 2020; in a case where the dispute in relation to an assessment year relates to reduction of reduction of loss, the appellant shall have an option either to:  (i) include the of tax related to loss in the amount… (read more)
Query

Assessee is in appeal for disputed tax, meanwhile AO has also initiated penalty u/s 271(1(c). Will the penalty waived off once VSV is opted against disputed tax on Assessment order
Answer As per FAQ No. 8 of CBDT Circular 9 of 2020 dated April 22, 2020, If both quantum appeal covering disputed tax and appeal against penalty levied on such disputed tax for an assessment year are pending, the declarant is required to file a declaration form covering both disputed tax appeal and penalty appeal. However, he… (read more)