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

A.O. had made addition of Rs. 1.68 correction on protective basis in A. Y. 2015-16 and on substantive basis in A. Y. 2014-15 in the case of a company. Can assessee offer protective addition to tax in A. Y. 2015-16 so that substantive addition in A. Y. 2014-15 shall be deleted? The clarification issued by CBDT is that if substantive addition is offered to tax in VSV then protective addition shall be deleted. Here the case is vise versa.

Answer Considering the intention of the legislature ,  if the assessee against whom  the order is passed protectively , and the appeal is pending as on 31-01 -2020,  the assessee can avail the benefit of  Vivad se Vishwas Scheme. The order against  whom the substantial addition is made have to be deleted . One may  have file rectification  application or may point out… (read more)
Query

Dear Sir

I filed the DTVSV application during first week of May 2020 and sent the acknowledgement to assessing Officer and copy of the acknowledgement also sent to CIT(A) by mail on 25/05/2020.
Today I received the enhancement notice from the CIT(A) asking to file the reply on or before 05/06/2020.

I request you clarify whether CIT(A) has any Jurisdiction over the enhancement after filing the DTSV application

Thanking you
S.Gurumurthi
Answer Please refer  Circular of CBDT Circular No 9 dt  22-04 2020   https://itatonline.org/info/wp-content/uploads/2020/04/CBDT-Circular-9-Vivad-Vishwas.pdf   which reads as under   dt Q.no 17  If CIT (Appeals) has given (an  enhancement notice, can  the   appellant avail the Vivad se Vishwas after  including proposed  enhanced income in the total assessed income ? Ans : The amendment proposed In the Vivad se Vishwas  allows the declaration even in cases where CIT (Appeals) has issued enhancement notice on or before 31" January, 2020. However, the disputed tax in such cases shall be increased by the amount of tax pertaining to issues for which notice of enhancement has been issued.  According to us  issue… (read more)
Query

I have received form 3 from DA determining correct tax payable. However, I cannot find any optiom to file form 4 online. Please guide
Answer Please approach your designated authority. The designated authority  cannot reject the application , without giving an opportunity of rectifying the mistake or defects if any in the form or procedural irregularities . If the application is rejected without giving an opportunity for rectifying the defects , one may approach the High Court by filing writ petition… (read more)
Query

An amount recieved by individual from its HUF is Taxable under section 56(2)(x) if IT Act, 1961
Answer A member of the 'HUF' has a pre-existing right in the family properties. A Coparcener has a pre-existing right and interest in the property and can demand partition also, however, the other members of the 'HUF' have right to be maintained out of the 'HUF' property. On division, the share in the estate/capital of the… (read more)
Query

Is an amount Recieved by the individual from its Huf taxable under sec 56(2)(x) of IT Act, 1961.
Answer A member of the 'HUF' has a pre-existing right in the family properties. A Coparcener has a pre-existing right and interest in the property and can demand partition also, however, the other members of the 'HUF' have right to be maintained out of the 'HUF' property. On division, the share in the estate/capital of the… (read more)
Query

Assessing officer had passed the order in the month of October-2019 and we have filed appeal before the CIT on 22.02.2020 through online. And due to not available of some documents for filing of condonation of delay we have not filed physically before the CIT. Now my query is whether I can file declaration application under section 3 of VSV Act, 2020 and can I avail the benefits of the VSV scheme?

Answer One may to find  out when the assessment order was received by the. As the appeal was  filed on 22-02 2020 , it is desirable to file an application for condonation of delay  by filing an affidavit and explanation for condonation of delay  Once delay is condoned , the appeal relates back the due date of filing of  an appeal… (read more)
Query

there seems to be no provision in the drop down for int levied under Section 201.

does that mean the int levied under this secion does not fall under the perview of VSV
Answer Please refer Circular No 9 of 2020 dt 22-04 -2020   question and answers , Nos , 15, 30 , 31 and 32  answers given therein  which clarifies that on satisfying certain conditions  the disputed interests can be settled . If there is any difficulty in finding the required provision in the drop down, it is advisable to contact your… (read more)
Query

The assesse has been issued a show cause notice u/s279(1) of the income tax act asking for an explanation as to why prosecution u/s278B should not be initiated on account of failure to deposit TDs on time .
Section 9 of the Scheme of the VSV act provides for certain exceptions wherein the provisions of the Scheme would not apply. – One of them being in
Cases in which prosecution under the Act has been instituted on or before the date of declaration.
Since the Prosecution has still not been instituted the assesse is trying to opt for relief under the VSV scheme but is unable to do so as the drop down in the form is not facilitating the exercise of this option. Please advice .
Answer Yes, your understanding is correct. The assessee is eligible to avail the benefit under VSVA, the same is also clarified by CBDT Circular 9 of 2020 dt 22-04 2020.  Q. no 22   Ans . Where only notice for initiation of prosecution has been issued without prosecution being instituted, the assessee is eligible to file declaration under Vivad se Vishwas. However, where the prosecution has been instituted with respect to an assessment year, the assessee is not eligible… (read more)
Query

Refund to be received as per Form -3 received from PCIT (Appeal pending with CIT(A),
now while filing form-4, should I simply file form-4 without mentioning anything.

1. NO tax is payable – challan details Not applicable.

2. No proof of withdrawal required to be filed when appeal pending with CIT(A)- Automatic withdrawal of appeal.

3. Refund determined in form-3 not received- should I file form-4 or wait till refund????

that mean I need to file blank form -4 and refund will be processed after all forms of VSV is completed…please confirm my understanding?????

Answer The information about refund due has to be mentioned . After getting certificate the intimation  is to be given to CIT (A) who will pass the consequential order . It may be desirable to wait till the receipt of refund order .  One may consider approaching designated authority for further clarification . (read more)
Query

I have received from 3 from PCIT for VSV form filed for Appeal Case pending before CIT(A).

While filing form 4, Proof of withdrawal of Appeal is required to be filed with form 4, when appeal is pending before CIT(A).
Answer No, as per Section 4(2) of VSVA, upon the filing the declaration, any appeal pending before the Commissioner (Appeals) shall be deemed to have been withdrawn from the date on which certificate is issued by the designated authority. After receipt of certificate one may have to intimate to the CIT (A)  who will pass consequential order… (read more)