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

I have filed Form 1 of VSVS.
There is a option to revise the form 1 already filed. I want to cases when I may revised the Form 1.
Till the date DA has not filed Form 3.
Thanks.
Answer Yes you nay revise the form before issue of certificate by Designated authority . Representation is sent to CBDT to clarify at what circumstances the assessee can  revise the form We are expecting clarification from CBDT on this particular issue . (read more)
Query

I have purchased a plot of worth rs.5500000 with sources from.husband and sons ,but due to some personal problems i could not represent/produce the proofs from my side on time ,but IT dept. taken bank statement s in which they found 15 lacs cash deposits erroneously with wrong notations and remaining are online transfers from my sons..but by having all statements… they computed tax 22,00,000 out Of Which Future Interst 5 Lacs and tax with special rate of interest. So i appealed cit,but not yet called. recently they sent a notice to pay min 20 percent so i paid..mean while vivad se viswas was notified. Can I Get Relief Of Special Rate Of Taxation And Futre Interst Amounts.do they review complete case and find correct tax in this scheme? Kindly suggest
Answer From what we understand from your query, if your case holds merits its better to contest the matter on merits. Further, under the VSVA, if the payment is made before December 31, 2020, you will have to pay only the disputed tax amount; the interest would be waved. However, if the addition is for the… (read more)
Query

We have purchased a plot of worth rs.5500000 with souces from.husband and sons ,but due to some personal problems i could not produce the proofs from my side ,but it dept taken bank statement s in which they found 15 lacs cash deposits with erong notations and remaining are online transfers from sons..but by knowing all the computed tax 2200000 out Of Which Future Interst 5 Lacs and tax with special interest. So i appealed cit,but not yet called. recently they sent a notice to pay min 20 percent so i paid..mean while vivad se viswas was notified. Can I Get Relief Of Special Rate Of Taxation And Futre Interst Amounts.do they review complete case and find correct tax in this scheme? Kindly suggest
Answer (read more)
Query

Many of my clients have been getting ITR Rectification notices u/s 154 for almost all the past 8-10 assessment years for which assessment orders u/s 143(1) had already been issued and refunds received. The standard wordings in such notices are:

Dear Madam/Sir,

Subject: Status of your ITR filed with CPC for PAN xxxxxxxxx, Assessment Year xxxxxx

Ref: – E-Filing Acknowledgement Number xxxxxxx Dated xxxxxx.

Your return for the above mentioned assessment year will henceforth be rectified by your Assessing Officer xxxxxxxxx. You are requested to contact your Jurisdictional assessing officer for any rectification related issues.You may also log on to https://incometaxindiaefiling.gov.in and click on “Know your Jurisdictional AO” under”SERVICES” menu for further details.

Upon analysis, I find that these notices are being issued only for those assessees who have certain ongoing taxation disputes in various forums.

I don’t know if this is the case only with my clients, or is happening to other assesses as well across India. Be that as it may, what is the objective of these notices? Is it not pressure tactics / harassment of assessees and furthermore, goes against the stated objectives of the government of promoting faceless assessments and no physical face to face interactions with the Income Tax Officers, presumably to reduce harassment and corruption?
Answer The matters are selected on the basis of computer system . Eg . in most of the charitable trusts  deductions for application of income is not granted.  As per law, a rectification can be made within 4 years from the end of the assessment year in which order was passed. However, the error has to apparent from… (read more)
Query

IN A CASE WHERE TRIBUNAL HAS PASSED AN ORDER AFTER 31/01/2020 CONFIRMING LEVY OF PENALTY UNDER SECTION 271B OF THE ACT, AND TIME FOR FILING APPEAL BEFORE THE HIGH COURT HAS NOT YET EXPIRED, CAN THE ASSESSEE AVAIL THE BENEFIT OF VsV SCHEME.
THANKS
Answer  As  per the scheme , there has to be pendency of appeal as on 31 –1 2020 , then only one can avail the benefit of the scheme . On the facts it is difficult to avail the benefit of the scheme.  One may consider , filing an Miscellaneous  application . In case the Tribunal allows the miscellaneous… (read more)
Query

In case assessee opts not to pay tax opted as income tax order relates to reduction of losses due to disallowance . Assessment order passed by ld AO u/s 143(3), wherein brought and carry forward lossess as per Income Tax Authority are not mentioned ,as required how these figures would be filled in S.no. D and E of Schedule D Annexure D of Form 1 of VSV .can VsV Form be uploaded by keeping these column blank ? Or is it mandatory?
Answer Circular No 9 /2020 dt  22-04 -2020 .In response  to Q  . No  53   the CBDT  clarified that  they will prescribe the manner of calculation of loss and computation, however till date  no clarification is issued. We have to wait for clarification to be issued by the CBDT .    (read more)
Query

As per Question 22 of latest circular, in case, only notice for initiation of prosecution has been issued, Assessee can opt for VsV Scheme. Issue is regarding the amount of tax to be paid in this scenario?
Answer Yes. 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. (read more)
Query

Sir,
Thank you for reply to my query dt. 27.04.2020, but my query was not about amount of Tax arrears to be filled but name of authority passing the order, dt. of order and section of passing the order.
I am giving facts of the case –
The AO passed order U/s 143(3) read with sec. 147 on 2.11.2017, CIT(A) dismissed appeal by order dt. 17.08.2018, appeal effect order U/s 250 passed by AO on 26.09.2018. Now I want to clarify whether in column 2 of part B of declaration form 1 – section 143(3) is to be mentioned or Sec. 250, and in next column 143(3) read with section 147 is to be mentioned or 143(3) read with sec.250. Then in column (3) name of authority is to be mentioned as AO or CIT(A). Then in column 4 date of assessment order 02.11.2017 is to be mentioned or date of appeal order by CIT(A) 17.08.2018 or date of order U/s 250 giving appeal effect dt.26.09.2018 by AO. is to be mentioned.
Answer We are of the opinion that the designated authority may be in a position to clarify the issue. There are number of practical difficulties are faced by the assesses while filing the declaration. In due course of time , the issues will be sorted by the CBDT as number of representations are made by the… (read more)
Query

Respected sir
The addition has been made under section 68 as alleged fake loans
The said loan has been fully repaid and interest has also been paid on the said loan and TDS is also deducted
If the assessee buys peace under vivad se vishwas scheme
Can he capitalize the alleged fake loan which is already repaid by crediting this in p&l or by any other way because the income can be taxed only once
Will there be any implications w.r.t benami law and gst
And what are the other issues which should be brought into consideration before entering into the scheme
There is also a favourable ruling of the in other case jurisdictional itat where the the creditor co. Is treated as genuine and loan from it as genuine loan
Aren’t subordinate authorities bound by decision of itat
Answer Each case has to be decided on facts . If  the facts are identical the CIT (A) is bound to follow the order of the ITAT .  As  per the scheme there is no provision of capitalisation. The issue is taken up before the CBDT , we hope some clarification may be expected . If the amount is… (read more)
Query

Assessee filed an CIT appeal against the order u/s 143 of the Act. The case has not yet heard. Subsequently notice u/s 263 of the Act is issued by the CIT and as on 31.1.2020, order u/s 263 has not yet been issued. In Feb 2020, order u/s 263 is issued to revert the case back to A.O on certain issues without quantifying any demand. In such case, whether assessee can go under VSV. If yes, what would be the demand payable.
Answer As we understand, there is an appeal pending before the CIT(A) . The same can be settled under VSVA as the order under section 263 of the Income tax Act, 1961 is for certain specific issues not being the ones under appeal. It may be desirable for the assessee  to file an appeal before the Tribunal… (read more)