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 had anticipated that the taxpayers may require a number of clarifications. 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 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.

Whether the settlement is qua issue or qua appeal? Whether there should be tax payable by taxpayer in order to avail the scheme? How to compute disputed tax in loss cases?

Answer The settlement can be done only qua appeal and not issue wise.    As clarified by FAQ no 9 of CBDT Circular dated 4 March 2020, taxpayer can opt for VSV scheme, irrespective of whether tax  arrear has been paid either partly or fully or are outstanding.   In cases where taxpayer has incurred losses, he… (read more)

Department appeal is disposed of on account of low tax effect. The Cross objection is pending for disposal as on 31-1-2020, can an assessee take benefit of issues pending in cross objection?

Answer In ACIT v. Ajay Kalia (2016) 157 ITD 187 (Delhi) (Trib) held that though the cross objection of the revenue is dismissed because of low tax effect, the cross objection could not be dismissed. Cross objection survives and considered as an appeal. In   Badru (Since Deceased) through L.R. and Ors. v. NTPC Ltd  and Ors. AIR 2019 SC  3385  the Apex… (read more)

Appeal is pending before ITAT as on 31-1-2020, one of the issue raised in the appeal is the issue which was not raised before the CIT (A), Can the assessee avail the benefit of the scheme in respect of entire appeal which is pending before the ITAT ?

Answer Yes . In Jehangir H.C . Jehangir v ITO ( 2015) 229 Taxman 392 ( Bom) (HC)  held that  issue specifically taken before the AO could not be refused  to be considered by Tribunal merely because the CIT (A)  did not have any view on it . Order of Tribunal was set aside.  Accordingly, the Querist can avail the benefit of VSVA.… (read more)

While computing the tax arrear as per S.2 (o) of the Vivad Se Vishwas Act , 2020, whether TDS paid relating to the assessment has to be considered?

Answer Yes , TDS paid has to be considered, dealing with IDS scheme the Delhi High Court held that there is no bar for an assessee or declarant to claim credit of advance tax and TDS paid previously relating to assessment years for which it seeks benefit under. Kumudam Publications P. Ltd. v. CBDT (2017) 393 ITR 599… (read more)

The Tribunal has passed the order against, which the rectification is pending, can an assesee avail the benefit of the scheme? Rectification application was pending for hearing as on 30 -01 -2020

Answer Rectification u/s 254 (2) is continuation of appeal proceedings before the ITAT,   hence one may take the view that even when rectification application is pending it can be construed as pending. let us take an example if rectification is allowed the appeal is restored ,  it relate back the date of filing of an appeal. Hence the… (read more)

Appeal before the Income tax Appellate Tribunal (‘ITAT’) was heard on 27th December 2019 and the order is pronounced on 2nd February, can the assessee approach under the scheme

Answer As per Rule 34 (4) of the ITAT Rules, 1963, after hearing the appeal the order has to be pronounced and signed in the Court.  Till the order is pronounced and signed the appeal is considered as pending before the Tribunal. Accordingly, the assessee can avail the benefit. The Hon’ble Supreme Court, in the case of Chattisgarh… (read more)

The assessee has filed a petition before the Settlement commission, which is pending for admission as on 31st January, 2020, can the assessee avail the benefit of the Scheme?

Answer As per Section 2 (1) b) of the VSVA “appellate forum” means the Supreme Court or the High Court or the Income Tax Appellate Tribunal or the Commissioner (Appeals), Settlement Commission is not covered.  As per Section 2(1) v) of the VSVA, a person who has filed an application for revision under section 264 of the… (read more)

Department has filed Writ against the order passed by the Settlement Commission, can an assessee file declaration under the Scheme.? If yes how to compute the tax is dispute?

Answer As per definition of S.2(1)(a) ,  “appellant” means—  (i) a person in whose case an appeal or a writ petition or special leave petition has been filed either by him or by the income-tax authority or by both, before an appellate forum and such appeal or petition is pending as on the specified date;     Further,As per… (read more)

All appeals are covered? What about Writs?

Answer Yes. All appeals are covered by the scheme. Even Writs are covered.  (read more)