| Query | Where an application for waiver of interest is pending before the Competent authority, or where the application for waiver of penalty is pending before the competent authority, can one settle the same under the scheme by paying 25%/30% of the amount? |
| Answer | No. Waiver applications are not appeal within VSV. |
| Query | Suppose if in the quantum appeal, only one of the issue is challenged and one more adjustment made by the AO is accepted. On settlement of the appeal on a particular issue, does the interest and penalty on the other accepted issue is also settled? |
| Answer | Interest and penalty will be waived only in respect of issue which is disputed in appeal and for which declaration is filed. For undisputed issue, tax, interest and penalty will be payable.
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| Query | Is the interest u/s 220(1) of the Act also waived on settlement of the disputes? |
| Answer | Yes interest u/s 220(1) will be waived.
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| Query | What if the penalty issue is already in favour of the assessee by an order of superior authority, will the assessee qualify for the 50% payment criteria? |
| Answer | No specific Clarification provided in this regard |
| Query | Where the time limit to file appeal has not expired against the penalty order, can one fall under the scheme? |
| Answer | Yes. Terms of availing VSV in case of penalty are similar to terms in case of disputed tax. Appellant should indicate in the declaration form that time limit to file appeal has not expired. |
| Query | Can one continue to dispute the quantum additions and settle the penalty appeal? |
| Answer | No. Cannot apply for settlement of penalty appeal when quantum appeal related to such penalty is pending.
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| Query | In case if there is difference in amount intimated by DA and amount declared by the taxpayer under declaration, what is likely to be remedy available to the taxpayer? Will there be any scope for email communication with DA to explain the difference? |
| Answer | As per FAQ 46 dt 4 March 2020, DA shall be able to amend his orders under clause 5 to rectify any apparent errors. However, the way and the manner of communication with the DA is not prescribed yet. |
| Query | If CIT(A) has passed on order giving partial relief and appeal effect is yet to be given as on 31 January 2020 (say given on 15 February ie before filing the VSV declaration). Assessee has filed appeal before the ITAT after 31 January 2020 but before filing of declaration. Whether such an appeal can be settled under the VSV scheme? |
| Answer | CIT(A) order was passed before 31 January 2020. The ITAT appeal has been filed after 31st Jan 2020 but was filed within the time limit of 60days. Accordingly, since time limit to file ITAT appeal was available as on 31 Jan 2020, the Appellant can avail benefit fo the VSV scheme in this case. The Disputed tax will be computed after giving effect to CIT(A) order passed before 31 Janaury 2020 as clarified by FAQ50 dtd 4 March 2020 (needs to be specifically clarified by the CBDT).
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| Query | Where one of the addition made is in respect of undisclosed foreign assets, does one settle the dispute for the remaining issues or one cannot settle such dispute? |
| Answer | No. As per section 9(iii) VSV would not apply to Tax Arrears in respect of undisclosed foreign assets. Further, Q11 clarifies that if tax arrears include issues that are excluded from VSV, such cases are not eligible under the scheme. |
| Query | Whether amount payable under VSV by settling the appeal will be considered as “tax paid” under the DTAA and the taxpayer in foreign country will be able to take tax credit of the same? |
| Answer | No clarification available.
In our view, since the tax is paid by the same challan as used under the income tax law. the VSV disputed tax paid should be viewed as tax paid under Income tax law and should be eligible for foreign tax credit in the jurisdiction of the residence of taxpayer as per the applicable DTAA in the same way as income tax is allowable.
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