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

The Assessee challenged the Order of the High Court u/s 260A for A.Y 1992-93 by filing an SLP in the Supreme Court in October 2012 on grounds of allowability of expense of non compete fee paid.
The A.O Assessed the Tax of the Assessee as per Order u/s 260A in 2014 at Rs. 36,71,004
The Order of the A.O was challenged by the Assessee in a second round of appeals on grounds of quantum of non-compete Fee in the CIT(A) and subsequently the ITAT. Post the Order of the ITAT allowed a relief of 4,14,571 in 2019, The A.O reassessed the Income of the Assessee by considering a lower quantum of non compete fee. Basis the Reassessment, partial amount was refunded to the Assessee. However, the SLP filed in the SC is still pending regarding allowability of Non Compete Fee. The Assessee intends to file an application in the DTVSV Scheme regarding the pending SLP.

Q1. In Part B of Form-1 of VSV Scheme what should be the Date of Order by which Tax Arrear is determined. Should it be the Assessment made after Order for computation of Income by A.O made u/s 260A in 2014 of Order of Reassessment for computation of Income by A.O made u/s 254 in 2019.

Q2. In Part C of Form 1 of VSV Scheme, where should the Assessee mention details regarding partial amount of refund made by the Income Tax Department post reassessment in 2019.
Answer  Please refer  Please refer Ans to Q.No 50   Clarification issued by Board F.NO IT (A) /2020 -TPL  Circular No 7 /2020 dt 4 -03 -2020   .As per the clarification the Assessing Officer will verify and pass the order . The assessee must specify the regarding the partial consequential relief allowed by the Assessing Officer  (read more)
Query

Sir

We have filed return of income for AY 2013-14 showing Loss as per Normal income and also Book loss per 115JB of the Act.

In the order passed u/s 143(3 ) certain expenses claimed as revenue expenditure was disallowed and resulting Loss claimed was reduced.

we have filed appeal to CIT (A) which was not disposed off till 31.01.2020.

We taken full set off of all carried forward loss and also loss claimed in AY 2013-14 in AY 2016-2017. However, we have incurred further loss in AY.2017-18….till 2019-20.

Now we want to avail VSVS .

QUERY

1) are we eligible to avail VSVS.

2) We are opting for reduction in carried forward Loss instead of paying Tax….so whether we have to pay tax in AY 2016 -17 where we have set off all carried loss or we have to simply reduced amount from carried forward loss as on date.

3) In form whether we have to fill Schedule D only or any other schedule ?

pls share your valuable view for the same.
Answer Yes, since there is an appeal pending as on the specified date, you are eligible for the Scheme for AY 2013-14. 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… (read more)
Query

An assessee has incurrent substatial loss in the business operations while framing the assessment loss has been reduced inrespect of amount of server storage charges remitted to USA entity alleging failure to deduct withholding tax for the remittance US firm. The appel has been filed before CIT and te same is pending since 01.10.2019. There was no order for penalty for non deduction of withholding tax as on date hence no appeal has been preferred. The issue is whether in case the assessee opts for settlement under Viwad se viswas scheme whether withholding tax for server storage has to be remitted to the departmnet. Will the same be insisted for giving effect to the scheme
Answer  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 of disputed tax and… (read more)
Query

A ltd issued FCCB and they were redeemed at premium, which is treated as interest payable as per section 115AC and on same TDS is to be deducted. Company utilised premium in India and outside India. TDS was deducted on premium utilised in India and on other it was not deducted. For the purpose of VSV what shall be disputed tax? and how computation is to be done?
Answer One of the condition for availing the  benefit of the scheme is  a  valid  appeal must be pending as on 31 -1 -2020 before the competent authority  .   If yes, the disputed tax amount against which appeal is made can be settled under VSVS. Once the appeal is settled  interest will be waived  and the assessee will get the immunity from penalty &… (read more)
Query

An appeal was filed belatedly on 27.02.2019 with an application for condonation of delay to ITAT (A). The ITAT fixed hearing on 04.03.2020 notice whereof was not received by the appellant but the ITAT decided not to condon delay and ordered that the appeal is not maintainable. The assessee wishes to apply for Vivad se Vshwas. Is he eligible for the same? Kindly enlighten. Thanks
Answer The assessee must file miscellaneous application before the Appellate Tribunal to recall the order as the notice of hearing was not received by the assessee. Please take inspection of the record to verify whether notice is served or not . If notice is not served , file an affidavit stating that the notice is not… (read more)
Query

An assessment order for AY 2013-14 was passed u/s 148 read with section 144 on 25.12.2018 and served on the assesee on 31.12.2018. The appeal was filed belatedly on 27.02.2019 with an application for condonation of delay to CIT (A). The CIT(A) has not yet heard the appeal nor disposed off the application for condonation of delay.The assessee wishes to apply for Vivad se Vshwas. Is he eligible for the same? Kindly enlighten. Thanks
Answer Q.  An assessment order for AY 2013-14  was passed u/s 148 read with section 144 on 25.12.2018 and served on the assesee on 31.12.2018. The appeal was filed belatedly on 27.02.2019 with an application for condonation of delay to CIT (A). The CIT(A) has not yet heard the appeal nor disposed off the application for condonation of… (read more)
Query

Dear Sir,

ITAT passed the order on 25.03.2019 confirming the addition which was received on 03.05.2019. Against order of the ITAT, MA u/s 254(2) was submitted on 02.12.2019 fixing the case on 14.02.2020. On 03.02.2020, the counsel of the assessee submitted an application that he will be out of station, hence cannot attend on 14.02.2020. As the MA was pending as on 31.01.2020, whether the case is covered under Vivad Se Vishwas Scheme. Please note that 30.11.2019 was saturday and 01.12.20119 was sunday.

Answer As  per section 254(2) . the rectification application has to be filed within six months  from the end of the month in which the order was passed.  Six months ends on November 2019 being Saturday and 1.12.2019 being Sunday  , the rectification application filed by the assessee is with in period of limitation .    we understand, a miscellaneous application was… (read more)
Query

Dear Sir,

ITAT passed the order on 25.03.2019 confirming the addition which was received on 03.05.2019. Against order of the ITAT, MA u/s 254(2) was submitted on 02.12.2019 fixing the case on 14.02.2020. On 03.02.2020, the counsel of the assessee submitted an application that he will be out of station, hence cannot attend on 14.02.2020. As the MA was pending as on 31.01.2020, whether the case is covered under Vivad Se Vishwas Scheme.

Answer As  per section 254(2) . the rectification application has to be filed within six months  from the end of the month in which the order was passed.  Six months ends on November 2019 being Saturday and 1.12.2019 being Sunday  , the rectification application filed by the assessee is with in period of limitation .    we understand, a miscellaneous application was… (read more)
Query

Appeal before CIT is dismissed in the month of Aug 2020. Can we file VSVS thereafter and is it vaild..?
Answer As we understand, you had an appeal pending on the specified date under VSVA. Pursuant thereto, the CIT dismissed the Appeal in the month of August 2020. As the appeal is dismissed . The appeal is not pending when you file an application under VSVS hence may not be eligible .  One has to find out… (read more)
Query

Sir, We got a demand notice for payment under VIVAD SE BISWAS SCHEME.In form 3 there is a declaration that the Tax is to be paid within 15 days from the receipt of the FORM otherwise the form/certificate would be void. . Meanwhile we come to know that the date is extended to 31.12.2020.CAN WE PAY THE THE TAX AFTER THE DAYS MENTIONED IN THE FORM OR IT WOULD BE VOID?

THANK U SIR

Answer (read more)