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

WHILE GOING TO SUBMIT FORM-4 UNDER VSVS ITS SHOWING -INVALID FORMAT OF ARN. HENCE UNABLE TO SUBMIT FORM-4 .
Answer There seems to be technical issues in the portal of the Income tax Department . The  assessee may contact the Designated Authority  or may write to the Chairman  CBDT . The assessee may also write to Shri S.R Wadhwa  Advocate , Chairman Representation  committee of the AIFTP ,who is interacting  with the CBDT  on day to… (read more)
Query

I have received form 4 but confirmation for form 5 is still awaiting, I am not sure whether i will receive form 5 or not. I have case fixed in tribunal. Shall i fight the case or simply ignore it coz i have applied under vsv scheme and received form 4.

Does form 4 guarantee that you will receive form 5 or there is a chance that form 5 won’t be issued and request under vsv scheme gets rejected?
Answer The Assessee   may  get the form No 5 in due course of time . The Appellant may also write to the Designated Authority, informing the non -receipt of Form 5 . The choice is with the assessee  whether to contest the matter or wait for the receipt of Form no 5.   (read more)
Query

I have to make the payment and I have the challan but I am not sure on who’s name the cheque has to be issued my bank is ICICI or S.B.I so want to know the name or in favour of whom the cheque has to be issued.
Answer Assessee can write the name of ICICI bank which is also authorized to collect the tax payment . Write correct PANO . There is no separate Challan  has been prescribed . It will be regular assessment tax challan , with minor head 400 . The bank will guide you  (read more)
Query

AS PER VSV SCHEME TAX IS PAYABLE BY 30/09/2021 ,IF NOT PAID THEN 110%
What happened if not paid on or befor 31/10/2021.

Please reply
Answer The Central Board for Direct Taxes (CBDT) vide Circular No. 75 of 2021 dated June 25, 2021, inter alia, has stated that the last date for payment under the Direct-tax Vivad Se Vishwas Act, 2020 (VSVA) with additional amount would be October 31, 2021.   It is pertinent to note that, as per Form 3 i.e.,… (read more)
Query

In form 3 filed by the department, we had observed a very high levy of 234 (B) and 220(2) interest. Upon questioning as to why such heavy interest was charged despite interest supposed to be waived on tax demand under VSV scheme, the AO highlighted the answer to FAQ 79 in the CBDT circular of December 2020. As per his interpretation, our returned income would also be treated as “undisputed tax liability” arising out of undisputed additions, within the meaning of that FAQ.
Therefore he has apportioned our advance and self assessment tax paid years ago against returned income, between the undisputed and disputed tax liability. By so doing, heavy interest is being charged on a portion of our returned income, even though we had paid taxes on that even before filing our return for the relevant AY.
Is this interpretation valid? How can returned income be assumed as an addition accepted in an order (under the meaning of the FAQ #79)? Doesn’t this go against the very purpose of waiving interest on the tax demand under VSV scheme? Our request for rectification to the PCIT (Designated Authority) has also been replied turning down request and reiterating the same interpretation.
Answer The querist may have to file writ before the High Court . In Co Operative Rabo Bank v CIT  (WPNo. 1025 of 2021 dt .25 -8-2021  ( Bom) (HC)   has allowed the writ petition where the revenue sought to withdraw the interest paid earlier under section 244A of the Act. The Court also discussed the… (read more)
Query

I have filed declaration under vsv scheme and form no.3 has also been issued.While uploading form no.4, there is some problem. The challan details are not being saved by the portal. What can be the remedy for it and what is time limitation to file form 4.
Answer The assessee may contact the Designated Authority or may write to the Board . If no clarification is received within a  reasonable time,  the assessee may file writ before High Court. The assessee may also write to Shri S.R Wadwa Chairman Representation  committee of the AIFTP ,who is interacting  with the BOAD on day to… (read more)
Query

can i pay Payment in multiple challan for one Assessment year
Answer There is no bar for payment in multiple challan .  It will be regular assessment tax challan , with minor head 400 . Write properly the PAN  NO and Assessment year . There is no separate Challan  has been prescribed .     (read more)
Query

The assessee had filed Form-1 on 03/06/2020 and received Form-3 on 11/06/2021. Form-4 is available to file now. So while adding challan details under new portal, the portal is not acceptng the challans paid before filing Form-1. For example one challan is paid on 26/09/2019. Please help.
Answer The assessee may contact the Designated Authority or may write to the Board . If no clarification is received within a  reasonable time,  the assessee may file writ before High Court. The assessee may also write to Shri S.R Wadwa Chairman Representation  committee of the AIFTP ,who is interacting  with the BOAD on day to… (read more)
Query

Sir
The assessee file form 1 & 2 under VsV against the assessment dues. The same was rejected by the department on 28.12.2020 due to none condonation of delay in filing the appeal rejected by the CIT appeal on 28.12.2020. On the same day, the assessee file again forms no. 1 & 2 against the penalty dues and the department issued form no. 3 against the penalty dues application on 10.1.2021. The assessee approached for condonation against the rejection to H’ble ITAT & the condonation is allowed. assessee intimated the same to the department on 22.03.2021. the assessee also file the writ before H’ble High Court. Now the department taken the veiw before court that the form No. 3 i already issued hence the writ is not maintainable.

Kindly reply to me

whether the department is misguiding the court or not because there is no provision of revision of form No. 1 & 2 under VsV.

As per provision of VsV form No. 1 & 2 application is a fresh application/origional for settlement of penalty due.

the assessee challenge the rejection of form no. 1 & 2 for settlement of assessment dues. the action of assessee is correct or not.

Answer (read more)
Query

The appeal of the assessee was pending as on 31/01/2020. Assessee had filed application under VsV scheme against which form 3 was also issued. Now subsequent to the issue of form 3 and before filing of form 4 or payment of taxes, CIT(A) heard and disposed off the appeal on merits in favour of assessee.

Now suddenly after 45 days CIT(A) has passed an order u/s 154 treating the order passed u/s 250 on merits to be non-est since assessee had applied for VsV scheme and form 3 had been issued.

Does CIT(A) have power to pass such 154 order and is it maintainable???
Can the order passed by CIT(A) be treated as non-est just because assessee had applied for VsV scheme and form 3 had been issued???
What alternate options does assessee have against the said 154 order.

Answer The Commissioner (Appeals) does not have the power to review his order but can pass orders for rectification under section 154 of the Act.  Recalling the order which was decided on merit will lead to review of the order , which is not permissible under the law . The assessee may file an appeal before… (read more)