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

This section is now closed. Please ask your questions at our new Q&A section
The answers given below are in response to queries asked by other people.
Query

Initially Appeal is disallowed by CIT(A).I preferred to ITAT later. I filed declaration under vivad se viswas scheme on 28.05.2020 as the appeal is pending at ITAT. The status showing in the portal is waiting for Form 3.However meanwhile I received letter of hearing from ITAT on 10/07/2020 because of the CIT(A) preferred an appeal against me.Whether CIT(A) can do so.
If it is yes what are the consequences.
Can I file declaration under vivad se viswas scheme again if in case any enhancement done by ITAT as a result of this appeal by CIT(A)?
Answer When the appeal is decided against the assessee . The department cannot file the appeal . The Department can file an appeal against a ground held in favour by the CIT(A). The Tribunal has no power of enhancement please refer Mcorp (P) Ltd v CIT ( 2009) 309 ITR 434 (SC). The declaration is valid… (read more)
Query

We have won the case against advance tax late payment and it been allowed even penalty has been waived off , interest on late payment of advance tax has been levy , we have already filled an appeal against same .
under VSV scheme can this Interest amount be waived off ??
Answer From what we understand from your query, the appeal is only pertaining to interest amount. As per section 3 of VSVA, where the tax arrear relates to disputed interest or disputed penalty or or disputed fee, the same can be settled at 25 per cent of the disputed amount (before December 31, 2020).    (read more)
Query

Appeal for Quantum and penalty u/s 271(1)(c)both are before CIT (A) on 31/01/2020.

While filling form-1 , when penalty amount is filled in schedule C it enhances tax payable by 25%. in fact it has to be NIL, automatically. Please suggest where it is to be filled.

Answer Yes, your understanding is correct and in consonance with Q&A No 8. Of CBDT Circular No. 9 of 2020 dated April 22, 2020. In case of any technical issues arising while filling the form, it is advisable to contact your designated authority. In case designated authority is not responding it is advisable to make  representation before… (read more)
Query

WE HAVE RECEIVED FROM 3 FROM THE DEPARTMENT STATING THAT WE NEED TO PAY THE AMOUNT WITHIN 15 DAYS FROM THE DATE OF FROM 3. HOWEVER, GOVERNMENT HAS EXTENDED THE LAST DATE FOR THE PAYMENT TILL 31.12.2020.
Q.1 WHETHER WE NEED TO PAY THE AMOUNT WITHIN 15 DAYS FROM THE RECEIPT OF FORM 3 OR WE CAN TAKE BENEFIT OF EXTENDED DATE FOR PAYMENT ?

Answer Yes, according to our understanding   assessee may have to make the payment within 15 days of receipt of Form 3. The extension, in our understanding is with respect to scheme and  with respect to the last date until which payments can be made under VSVA.   Once the declaration is filed and form no 3 is received ,… (read more)
Query

Are we eligible to claim refund under vivad se wishwas scheme?

Eg.
Demand order under dispute at appellate tribunal (tax Rs. 700 + interest Rs. 300) = Rs. 1000

Payment made towards demand Rs. 850

In above case, can we get refund of Rs. 150 ( payment 850 less tax demand Rs.700).

Please let me know your opinion on above.
Answer Yes, according to explanation to section 7 of VSVA, it is clarified that where the declarant had, before filing the declaration, paid any amount under the Income-tax Act in respect of his tax arrears which exceeds the amount payable under VSVA, he shall be entitled to a refund of such excess amount, but shall not… (read more)
Query

In our case appeal is pending before CIT(A) against order u/s 201.
We are unable to opt for VSV as under the dropdown, option of order passed u/s 201 is not there. Please provide possible recourse.
Answer In case of any problems on the portal, it is advisable to contact your designated authority at the earliest. In case if you are not able to get the reply from the designated authority with in reasonable time , please write to Chairman CBDT . If there is no response from the CBDT  you may request… (read more)
Query

In our case, the CIT(A) has passed order as on 20.11.2019. Further the AO has passed order giving effect to the order of CIT(A) as on 10.12.2019. However, with regards to penalty proceedings, the AO has passed penalty order as on 27 February 2020 which is after designated date i.e. 31.01.2020. The query is can we consider our case with regards to penalty order under Vivad se vishwas.
Answer Reference is drawn to Question No. 8 of CBDT Circular No. 9 of 2020 dated April 22, 2020, www.itatonline.org  wherein it is clarified that, 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… (read more)
Query

Dear sir/madam,
In a search, certain declarations were made. This was included in the return filed u/s 153A. In concluding the 153A assessments, certain other additions were made which are contested in pending first appeal. The penalty notice u/s 271AAB has been issued in respect of the declaration and no order is yet passed. In case, VSV Scheme is opted for, can we, in law, expect the penalty u/s 271AAB to be dropped? Our understanding is that, the penalty does not relate to “tax arrears” nor is the declared amount an issue under appeal. Will be grateful to your views.
Thanks in advance.
Answer If the quantum is  pending as on 31 -01 2020 ,the assessee can opt for the scheme  in respect of quantum appeal .  Once quantum  appeal is settled the dept  cannot levy the penalty . Please refer Q. No 45  CBDT Circular No. 9 of 2020 dated April 22, 2020, www.itatonline .org  wherein the CBDT clarified that As per S.6 subject to the provisions of… (read more)
Query

Can the taxpayer opt for the scheme even if the pending appeal as on 31 Jan 2020 is disposed against the taxpayer before 31 December 2020 or last date to be notified (with additional 10% payment of disputed tax)?
Answer Please refer Q. No1   CBDT Circular No. 9 of 2020 dated April 22, 2020, www.itatonline .org  Ans : Appeals pending before the appellate forum  as on the 31 St day of January 2020 (Specified date ) are covered .  From what we understand, the appeal has been disposed by a competent authority  after the specified date. Ie 31-01 2020 and appeal is pending in… (read more)
Query

As per FAQ no 39 (Circular no 9 of 2020) dated 22 April 2020, if the ITAT has decided the issue in favour of tax-payer for any prior year, then the tax-payer would be eligible to compute disputed tax @ 50% on similar issue pending before the ITAT in later years.

Can the said principle be applied in case the CIT(A)has decided the issue in favour of tax-payer in year 1 and similar issue is pending before CIT(A)in year 2?
Answer The same is included as 2nd proviso under section 3 of VSVA. As a proviso it is a carve out from the meaning of the section and the same cannot be given a wider interpretation to include more than what is expressly mentioned. Accordingly the disputed tax @ 50 % of tax cannot be made applicable… (read more)