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Answers By Expert: Dr. K. Shivaram (Sr. Advocate)
Query

Assessee has gone for settlement under the Scheme in respect of an appeal which is pending in respect of penalty. Now Form 3 has been received.
Under what section should the payment be made whether as tax on regular assessment by challan 280 and whether the amount is to be entered in others or under tax column.

Answer

 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 .

 
Query

Assessee filed appeal before the CIT both on merits and penalty (Dept attavhed the penalty amount after passing the order)
The CIT (A) dissmissed te appeal on merits and deleted the penalty u/s271 (1)(c)

Assessee not filed appeal on merits and the dept filed appeal against penalty and the penalty appeal filed by the department was dismissed

The dept filed appeal against penalty and no notice was issued to the assessee sincfe the admission of the case is not posted .
Assessee filed viswas scheme and paid lower penalty amount

After that event suddenly the penalty appeal filed by the dept came up for hearing the counsel for the department argued and the Court on admission taken up the case and dismissed the case. The counsel for the assessee was asked asked whether the tis there any appeal on merits on which the cousnel argued tht the assessee had not filed appeal on merits.
Both cousnels were not in knowledge of that the assessee hae filed form 1 and form 2 under viswas scheme Now the assessee is not filing form 4 and form 5 and wants refund the penalty amount.

Your exper view is solicited
Answer

The querist can opt out, however if taxes are paid  under the Vsv Act the assessee will not get the  refund.    Please refer  circular No . 9 /2020 dt 22-4 -2020--Q, No . 42 and answer   given by the CBDT,    which state that any amount paid in pursuance of a declaration made under the Vivad Se Vishawas shall not be refundable under any circumstances .  It seems that the assessee has paid disputed the penalty before filing of declaration under VSv Act , then it cannot be presumed that the payment was under Vsv Act , accordingly the assessee is eligible for refund .    

 
Query

Company filed the ITR and paid tax on exempted Income also. During assessment the same is put under consideration for Assessing officer. But Order u/s 143 (3) order return income as assessed income with no addition but refund for tax paid on exempt income not given as exempt income is already included in return income.
Company filed an appeal before CIT(a) which was pending. Hence company opted for VSV scheme and filed form 1 and 2 as tax was already paid in excess on exempted income so company treat that as disputed income and ask for waiver of interest paid. BUT DCIT rejected as they said they only consider returned and assessed income in consideration and there is no disconnect so they cant treat this case for vsv and rejected the same for any relief we have to continue for appeal against CIT (A).

Is he is correct on doing so? Tax paid by us in excess and AO didn’t consider our point for relief. Is CIT (A) is the best route?
Answer

The asssessee has to argue the matter on merit before the CIT (A) . The Designated Authority is justified in law rejecting the  declaration under Vsv Act .

 
Query

In form 3 issued by DA shows a refund under VSV Scheme how to fill the form 4 and avail the refund.

Answer

 Assessee  may hav to   write  the refund amount  due to your assessee.   If there is an defect in the Form the Designated Authority  has to provide an opportunity to rectify the defects or an opportunity to  file  new form . Whole object being to settle the dispute the Tax department will not reject the application merely on technical grounds .  

It may also  advisable to contact your designated authority under VSVA for a clarification.

 
Query

I have already filed Form 1 and 2 under VSV for disputed tax, awaiting for Form 3.

Now, I have received a show cause notice for penalty proceedings as to why penalty u/s 271(1)(b) should not be imposed.

My question is whether penalty will be waived once Form 5 is issued to me?
Answer

As per section 2(1)(i) of the VSV Act , disputed penalty means , any penalty  determined I. any case under the provisions of the Income -tax Act , which is not levied or leviable on the disputed income or disputed tax  where an appeal is filed against such dispute penalty. Section 271(1) (b) is one such provision .    Please refer Circular No  . 21/ 2020 dt 4 -12 -2020 .    Q.No 80 and answer Given by the CBDT  wherein the CBDT clarified that where the appeal related to penalties that are not related to quantum assessment like  u/ s 273B 271BA, 271DA of the Acts  , etc are required to be settled separately .Penalty u/s 271(1)(b) is in respect of failure to comply with the notices , hence  it may not be waived automatically .     The assessee is  advised to file a detailed reply giving the reasons why the assessee could not attend the notices and also mention that the assessee has opted for Vsv Scheme hence the proposed initiation for levy of penalty may be dropped . The AO may drop the proceeding.

 
Query

1.There is no direct search in case of our client
2.However the reassessment has arisen from the Search Action in some other case as specified in the order u/s 143[3] RW 147 of our client case
3.The DTVSVS Application was filed in Mar 2020
4.The Form 3 dated 11.3.2021 issued by Principal CIT states amount payable is calculated at 125% as against 100% of disputed tax as computed by the assessee – as per FAQ 70, of circular F.No.IT(A)/1/2020-TPL , dated 04.12.2020 as the case of taxpayers w as based on search executed in some other tax payer’s case.
Answer

According to us  the interpretation of the CBDT is not in accordance with provision of the VSV  Act.  A Writ petition is filed before the Bombay High Court in Sushil  Bhatia HUF v .PCIT ( WPNO. (L) (No. 4666of 2021 dt 23 -2 -2021  .Delhi High Court order in Ashsih Saraf v .PCIT dt 15 -2 -2021 was relied . The matter  is adjourned to 4 . 4 -2021 .  We hope the Court may decide on 4 -4.  -2021 .   Similar petitions are filed before the Delhi High Court In Prime India Pvt Ltd v .PCIT and ors WP NO. 2579/   2021 the interim order was passed on 25 -2 -2021 , the matters are kept for hearing on 4 -5 -2021 .

The assessee may file writ before the High Court  it may be clubbed along with other group matters which are likely to be heard in the month of April 2021 .

 
Query

ONE OF MY CLIENT IS ASSESSED U/S 143(3) BY MAKING CERTAIN ADDITIONS. AGAINST THE SAID ADDITIONS, THE ASSESSEE HAS MOVED TO APPLICATION FOR VIVAD SE VISHWAS SCHEME AND PAID TAXES. NOW THE ASSESSEE HAS RECEIVED NOTICE U/S 153C FOR FILING RETURNS. KINDLY ADVISE ME ON WHAT INCOME WE HAVE TO FILE RETURN IN RESPONSE TO NOTICE U/S 153C WHETHER ON INCOME DECLARED UNDER ORIGINAL RETURN OR AT ASSESSED INCOME. IF I FILED RETURN ON ASSESSED INCOME, CPSE WILL RAISE THE DEMAND CONSIDERING ADDITIONS
Answer

The querist seems to have paid the tax on the disputed amount which is pending in appeal . The querist may write to the Assessing Officer who has issued the notice to drop the proceedings as the assessee has opted for under Vsv Act and also  file the return under protest . The additions made in the original assessment proceedings are of debatable in nature the  assesseee may show the  income returned as per the original return . If the additions are not debatable it may be desirable to show in the return pursuance of notice u/s 153C the assessed income . 
Query

Sir,

I have received Form 3 by the officer, i have the payment of tax as mentioned in Form 3.

Form 4 requires Letter of Withdrawal.

Under E-Proceeding i have filed a Letter requesting the officer to withdraw the appeal.

But no response from the officer is received yet.

My question is so while filing Form 4, since till now i have not received an order relating to letter of withdrwal. How should i file my Form 4.

Answer

Please  refer Circular No 9 of 2020 dated 22-4-2020 Q. No 43 . and answer  by the CBDT  wherein the CBDT clarified that  , where the assessee has made request for withdrawal   and such request is under process , proof of request made shall be enclosed . It is the designated  Authority has to issue the certificate . Mere acknowledgement showing an application for withdrawal is sufficient compliance .  

 
Query

Hi,
To the respected panel of Advocates & Chartered accountants.

Subject: Application to opt scheme of VSV, where the appeal was filed by not uploaded due to certain technical issue.

The matter of AY-2011-2012, where the applicant of the case was not aware of any consequences because no notice was served to the applicant since the notices via email were noticed in the year of 2019 august, as from the previous year, the health of the applicant was breakdown, and nobody was available to check with the prioritised email access. As soon as the applicant noticed the email and order passed against her in the email, immediately the applicant had approached to the CIT office which is held in Gurgaon, and specified application was made to the requested officer and appeal was made, where the challan was also generated for the appeal being applied, after that situation. The scheme was launched for VSV and lockdown was made by the pandemic of COVID – 19, thus as the time passed and the deadline of VSV was 31st December,2020. On the date, 30th of December, the applicant visited to fill the form of VSV as applicant is not much educated, later. After filing the form it was told by the officer, that there’s no appeal pending before the authority or official, to which it was showed and told and generated challan was also shown to the officer that the appeal was filed by the applicant in the year of 2019 itself and hence the applicant shall be applicable for VSV. Since the appeal was generated by remained saved in the preview version and was not uploaded, the applicant being under the assumption that the appeal was filed by her in 2019 but was not uploaded due to technical issue, which was an traumatic result to the situation. The intention of the applicant was clear to file the appeal in 2019, which remained under processed due to technical issue, but couldn’t be eligible for VSV. Since the appeal was again filed by the applicant in the month of Jan by the applicant and again applicant filed the form of VSV as the date was extended for VSV. Again remained under the unknown circumstances, the file was rejected that the appeal would remained pending before the authority to 31st December 2020. As no notification was issued to citizens so that they can also be eligible for the certain VSV scheme. Hence, the amount is 13,00000 in rupees and with all the penalties and interest with Rs, 1700000/-. The applicant is the single mother and having two daughters shall be considered where the matter can be resolved as she doesn’t have any other source to fulfil and pay such heft amount. The applicant shall be considerable to the VSV scheme how and under which circumstances it can be availed? Please advice

Answer

 Cut-off date for declaration under the VSV Act, 2020 extended by CBDT, vide Notification No. 09 of 2021 dated February 26, 2021  up to 31 -3 -2021 .

If the appeal is pending before the Competent Authority , the assessee should file  declaration under VVS Act . .Once the declaration is accepted and the taxes are  paid the Interests and penalties will be waived . In case the assessee is not able to file the declaration , the assesseee may have to contest under normal procedure prescribed by law .  The assessee can also consider moving an application under section 273A for waiver of penalties levied and also separate application for waiver of interests. In  case the assessee does not have any assistant of the tax Consultant or the Chartered Accountant , the assessee may approach the  Chamber of tax Consultants Mumbai or  All India Federation of Tax Consultants , they will  be able to guide  you to get the justice as per the law .  

 

 
Query

An appeal is pending before the CIT(A). However at the time of appeal the demand was at Rs. 60,00,000/-. After 10 days a rectification Order u/s 154 was passed wherein the TDS Credit of Rs. 15,00,000/- was allowed. So my question is whether in filing of Form 1 the disputed tax will be Rs. 60,00,000/- or Rs. 45,00,000/-. If 60,00,000/- then how we will show the payment of Rs. 15,00,000/- (TDS) in the column of taxes paid. If Rs. 45,00,000/- whether my application will be rejected. Thanking You.
Answer

Please refer  circular No.9  dt. 22-4 -2020   Q .No. 50 and answer given by the CBDT , in case the demand has been reduced partly or fully   ,the demand payable will be adjusted .  The Application will not be rejected . In the form TDS deducted will have to be reduced and balance amount will have to be shown as tax payable .   The assessee can also  contact the  Designated Authority  they will guide the assessee by verifying the record.