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

Dear Sir,
AY 2014-15 Returned Income
Normal Tax NIL
MAT Tax 100
Returned MAT Credit 100
Assessed Income
Normal Tax 20
MAT Tax 100
Asssesed MAT Credit 80

Question 1: Can I pay 20 and carry forward Rs.100?

AY 2015-16 Returned Income
Normal Tax 60
MAT Tax 20
Utilized MAT Credit 40 out of 100 and paid 20 Remaining Credit of AY14-15 60 (100-40)
Assessed Income
Normal Tax 80
MAT Tax 20
Utilized MAT Credit 60 out of 100 and paid 20 Remaining Credit Rs. 20 (80-60)

Question 2. if question 1 is yes, Can I pay differential tax of 20 and carry forward is Rs. 60?
Answer (read more)
Query

Form 3 has not been issued by Designated Authority within 15 days from the day of submitting Form 1 & Form 2. What should I do?

Answer (read more)
Query

WE HAVE A CASE WHERE ASSESSMENT ORDER WAS PASSED AFTER MAKING 2 ADDITIONS.OUT OF THE TWO ADDITIONS WE HAVE FILED APPEAL WITH CIT AGAINST ONLY 1 ADDITION.HOWEVER WE HAVE PAID TAX AS PER NOTICE OF DEMAND OF THE ASSESSMENT ORDER WHICH COVERED TAX AND INTEREST U/S 234B AND C FOR BOTH THE ADDITIONS MADE.SO NOW WHILE FILING FORM 1 OF VSVS HOW DO I CALCULATE AMOUNT OF DISPUTED TAX ,INTEREST AND REFUND.
TOTAL INCOME AS PER RETURN FILED -RS.475598
ADDITION 1(UNDISPUTED AGAINST WHICH NO APPEAL FILED)-RS 172180
ADDITION 2(DISPUTED AGAINST WHICH APPEAL FILED)-RS 22662623
INTEREST 234B -5694824
TAX AS PER NOTICE OF DEMAND- 12720224
WE HAVE PAID ENTIRE RS 12720224/- .KINDLY GUIDE US WHAT WILL BE THE AMOUNT OF REFUND
Answer (read more)
Query

Taxpayer files declaration under VSV for a matter under appeal before ITAT with an amount payable say INR 15 lakhs. The designated authority while issuing certificate under section 5(1) of the Act, determines the amount payable as INR 20 lakhs. Taxpayer would not like to settle the dispute at INR 20 lakhs.

Query: Section 4(2) deems the ITAT appeal to be withdrawn from the date when certificate is issued under section 5(1). In this case what would be the recourse to the taxpayer wrt to such deemed withdrawal of appeal since he shall not settle the dispute under VSV?

Answer The querist can write to the designated authority   rectify the tax calculation and issue fresh certificate . Further, there is no bar on refiling a fresh application under VSVA. If the calculation of tax is by the designated authority is not accordance with the scheme and the designated does not send a revised certificate  the assessee can… (read more)
Query

Assessee files Return declaring total income of Rs. 35 Lacs. Addition made by AO by enhancing valuation of stock by 25 lacs.
Assessee gets 100% relief before CIT appeals.
Department files appeal before ITAT which is still pending.
If assessee pays the 50% of tax as stipulated in the scheme and ask the department to withdraw the appeal.
After withdrawal of appeal by the department whether addition will be deemed sustained or returned income will be restored.

Answer From what we understand, as per Section 5(3) of VSVA, 2020, Every order passed under sub-section (1), determining the amount payable under this Act, shall be conclusive as to the matters stated therein and no matter covered by such order shall be reopened in any other proceeding under the Income-tax Act or under any other… (read more)
Query

One search case which was not eligible for VSVS in January as the demand in dispute was more than 5 cr. Last month CIT appeal order has come and now dispute is less than 5 cr. So as on announcement date of scheme the case was not eligible. Now if the criteria remains the same the assessee is eligible.
If he files the VSVS application, will he get the certificate from PCIT?
Answer According to us No, only appeals pending or deemed appeals as on the specified  date are eligible for VSVA. (read more)
Query

My case is the non search case then also i am getting the query of

“Please enter the amount payable under DTVSV on or before 31.12.2020 in search case of Schedule AI”

“Please enter the amount payable under DTVSV after 31.12.2020 in search case of Schedule AI”

what to do, kindly help me out
Answer In case of any technical glitch on the portal it is advisable to contact the designated authority under VSVA at the earliest. (read more)
Query

We have uploaded Form 4 after we have received form 3 showing refund amount and we have withdrawn CIT Appeal and received order under section 250 from CIT now the query arise as we have received signed copy from CIT 3 showing refund in June but due to panemadic we uploaded form 4 in September withdrawing CIT Appeal but not yet received form 5 will their be any problem
Answer According to us there should not be any problem. The assessee will get the intimation in due course of time .  Assuming the designated authority finds any discrepancy in the form they have to give a reasonable opportunity of hearing before rejecting  the application under   VSVA . (read more)
Query

Sale Deed of property was executed suppose in Jan 2017. Payments were made by six cheques dated 07.01.2017, 07.02.2017, 07.03.2017, 07.04.2017, 07.05.2017, 07.06.2017. All the details of cheques were mentioned in Sale Deed. The property was purchased long time back. It is a case of long term capital gain. My query is whether the sale will be considered in F.Y. 2016-17 (AY 2017-18) or in F.Y. 2017-18 (AY 2018-19). As the last cheque was encashed in F.Y. 2017-18 so capital gain should be considered in A.Y. 2018-19.

Please Clarify
Answer One has to read the clauses in the agreement and  has to see is there any right of revocation if the full consideration is not paid .  One ha sto see when the sale deed in registered and possession was given .  If possession was given on receipt of full consideration ie om 7 -6 2017 , it… (read more)
Query

Under what section of the VSV act is tax payer not allowed to file VSV if his pending appeal at the specified date has now be ruled in merit against him.

What is the legal view in law. I think there is a loophole created by covid as VSV filings have been extended.
Answer The scheme is very clear the appeal must be pending as on specified date .ie 31 -1 2020 or time for filing an appeal has not expired .  The Govt has extended the scheme up to 31 -12 -2020 without paying any interest or penalty .  The specified date remains the same.   The designated authority may  reject the application… (read more)