Answers to queries on Vivad Se Vishwas Scheme

Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors
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

We would like to have your expert opinion on quarry regarding opting” Vivad Se Vishwas Scheme, 2020” in the matter of our one of the client. The facts are as under:
1. Assessment Year : 2007-08
2. Assessment Proceedings U/S 143(3) r.w.s 147 of the Act was completed by the Assessing Officer
3. An addition of Rs. 3,54,64,845/- was made
4. Aggrieved by the Assessment Order appeal before the CIT(Appeals) was made
5. CIT(Appeals) vide order dated 22.02.2019 granted relief of Rs. 3,36,91,602/-
6. Revised taxable Income Rs. 21,33,833/-
7. Net Demand of Rs. 8,24,150/- was raised by the Assessing Officer vide his order dated 28.11.2019 (Order giving the effect to CIT(Appeals) order – After adjusting prepaid tax
Gross Tax Liability Rs. 10,65,828/- Less: Prepaid Tax Rs. 2,45,575/-
8. Aggrieved by the CIT(Appeals) Order second appeal before ITAT was filed on 09.12.2019
9. Department also filed appeal against CIT Orders before ITAT
10. We have opted for Vivad Se Vishwas Scheme, 2020
11. Form No.1 & Form No.2 were accordingly filed on 20.03.2020
12. On the basis of Demand raised by the Assessing Officer as per order dated 28.11.2019 (order giving the effect of CIT(Appeals) Order) Rs. 4,20,473/- payable by the our client
13. On 06.05.2020 Appropriate Authority issued Form No.3 Rs. 60,90,768/- is payable under DTVSV, 2020
As the Assesses appeal is pending we have had opted Schedule-4 of the Form No.1 of DTVSV,2020. We would like to have your expert opinion what we will be correct amount payable under DTVSV,2020. For your ease and ready reference extract of Form No.1,2 & 3 of DTVSV,2020 are enclosed.
Answer As we understand, there are two appeals pending before the Hon’ble ITAT viz. Assessee appeal and Departmental Appeal. To settle the assessee appeal under VSVA, only the tax on disputed quantum needs to be paid. Interest will be waived off. If the assessee wishes to settle the Departmental appeal, 50 per cent of the tax… (read more)
Query

On case of Application filed under Vivad Se Vishwash Scheme before 24/03/2020. The DO i..e principal CIT has also uploaded Form No.3 on 04/05/2020 and in the said form it is mentioned that

“The declarant is hereby directed to make the payment of sum payable, if any, as per Balance amount payable / refundable after adjusting amount already paid above within Fifteen days from the date of receipt of this certificate.”

In case of non-payment of amount payable within the said period, the declaration under Form-1 shall be treated as void and shall be deemed never to have been made.”

However the payment date under VSVS 2020 has been extended to 31/12/2020. I have quaries in this regards as follows:

1) Whether the Form No.3 uploaded by Department during lockdown and compeling to make payment in 15 days which is also falle in lockdown situation is legaly vailid.

2) Whether in such case applicant has to make payment in 15 days or it will be automatically extended to 31/12/2020 even though there is no amendment in Sec.5 of VSVS 2020.

3) If payment is not made within 15 days, as mentioned in form no.3 is the declaration under Form-1 shall be treated as void and shall be deemed never to have been made. In that case can i re apply the same application online.

4) what is procedure for withdrawal of Application
Answer Vide Economic package the Hon’ble Finance Minister has extended the last date for beneficial payment under VSVA to December 31, 2020. The same is the outer date to availing the Scheme and making payment under it. However, once, an assessee has made a payment, he is bound by VSVA and Rules framed therein. Yes, the… (read more)
Query

Dear Experts,

In one of the cases, after filing the return for AY 2018-19, the assessee came to know that he has filed the return showing reduced income in business as compared to actual income (The turnover was also shown lesser than actual). The return was filed using ITR 4 Sugam declaring income U/s 44AD. The return was duly processed by CPC.

Now the assessee wants to declare his true income by filing a revise return but he is not able to do so as the time limit for filing revise return already expired.

So should he file a rectification online by increasing the Turnover and net profit ( Deemed Profit U/s 44AD) to Actual ?

As per my understanding if there is change in income rectification should not filed but revise return.

Please guide.
Answer As we understand, the last date to revise the ITR would be March 31, 2019. Therefore, there is no provision to revise the return filed. The assessee can file rectification application and pay the tax rightfully due to the State . As per article 265 of the Constitution of India  provides that  “ no tax be levied… (read more)
Query

company claimed expenses u/s 35D which were allowed in assessement. then AO reopened a case and disallowed the same and said it was wrongly allowed earlier which resulting in decreased in losses and levied penalty u/s 271(1)( c). now case is pending before ITAT for the allowance of an expenditure and Appeal is pending before CIT(A) for penalty u/s 271(1)(c). Company is a loss making company and the case is related to AY 2007-08
Answer (read more)
Query

That there was assessment of Asstt Year 2008-09. The original asstt order was passed on 14th Nov 2010. The CIT(A)vide order dt 2nd May 2011 allowed the appeal. The Deptt preferred appeal before the ITAT. The ITAT remand the matter to the AO. The AO made assessement on 21st Mar 2016.The assessee preferred the appeal before the CIT(A). The CIT(A) partly allowed the appeal. The assessee filed the appeal before the ITAT. Now the appeal is pending before the ITAT. Please guide me whether all the details of all the orders has to be filled in Form No.1.

Answer Not required .Only the relevant details  in respect of the appeal pending before the ITAT is required to be filed . Designated authority cannot reject on the ground that all details are not filed . If any information is required the designated authority will issue the show cause notice to file the required details . (read more)
Query

We are filing DTVSV under vivad se vishwas scheme regarding appeal filed against the penalth imposed by ITO. in Sch D what is to be mentioned under Disputed income?

Answer As we understand, the assessee wishes to settle penalty dispute Schedule D is In case the appellant opts not to pay tax on additions having effect of reducing loss/depreciation or MAT credit carried forward then the relevant column of the following schedule is to be filled up. By a plain reading of the title of Schedule… (read more)
Query

Hi,

What will be the treatment of refund earlier granted as per intimation u/s 143(1)(a) in VsV Act, 2020?

Also, whether the interest levied under section 234D will also be waived if the assessee opt for VsV Scheme.
Answer Please refer S. 234D (2) which says that where as a result of an order u/s 154  or 155 or 250 or 254 or 260 or  262  or 263 or 264 etc is passed the amount of refund granted under Sub section 143(1) is held to be correctly allowed , either in whole or in part as the… (read more)
Query

An appeal before CIT(A) was filled in January 2020 cotesting part of the addition. Now the appellant want to contest remaining additions by filing additional grounds. Wheather appellant will be eligible for waiver of interest and penalty on the addition which is being contested by filling additional ground under VSV scheme.

Answer (read more)
Query

Please Advice

In Form 4 of Vivad se Vishwas there is a requirement of mandatory attachment regarding proof of withdrawal of appeal. The appeal relates to Income Tax Appellate Tribunal and as per Vivad se Vishwas Act appeal pending before Income Tax Appellate Tribunal are deemed to be withdrawn from the date Certificate in Form 3 is received.

Form 3 Certificate received from CIT on 21.05.2020. Now the System is asking to submit Form 4 but there is no proof of withdrawal of appeal to attach.

Sub section 2 of Sec 4 of Vivad se Vishwas Act, 2020 —upon filing of declaration any appeal pending before the Income Tax Appellate Tribunal or Commissioner (Appeals), in respect of the disputed income or disputed interest or disputed penalty or disputed fee and tax arrear shall be deemed to have been withdrawn from the date on which certificate under sub-section (1) of section 5 is issued by the designated authority.
Answer Yes, your understanding is correct. For matters before the ITAT & CIT(A) there is no requirement to submit a proof of withdrawal. It is only after getting certificate from the designated authority , the assessee has to intimate to the CIT(A), if the appeal is pending before CIT (A) . If the appeal is pending… (read more)
Query

An issue in appeal was decided in favor of assessee in A. Y. 2010-11 by CIT(A) appeal. The same issue is pending before CIT(A) in appeal for A.Y.2012-13.Wheather assessee shall be eligible for tax rate of 50% of the applicable tax rate under VSV?

Answer No, As per second proviso to section 3 of VSVA, to avail the benefit of 50 per cent of disputed tax, the issue should be covered by an order of ITAT or higher forum.   (read more)