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

The department has already adjusted the demand against the next years refunds. Now as per VSV form 3, it ask to fill the details of taxes paid like bsr code and sr. no. of challan. How to fill the same.Please advise.
Answer

The assessee may be having the intimation received from the Department  adjusting the date of demand and also reference number , the same can be mentioned . In  case the assessee is not able to mention properly the Designated Authority will be in a position to help the assessee.
Query

Sir my client file appeal against order of A.O.and order from commissioner appeal dated 21.01.20 was recd.by post dated 15/2/20 and I have not file appeal before ITAT and opt VSVS Scheme on 17.06.20 by filing form I & II. Thereafter I assessee received form III from dapartment and Submitted form IV with tax challan on 08.12.20.But now department want to revised the order on the ground that as on 31.01.20 no appeal is pending.
Please give your valuable guidance whether action taken by department is correct or not?
Answer

As per the scheme the  Appeal has to be pending as on the specified date , i.e 31-1 -2020 . On the facts of the assessee though the order dt 21-1 -2020  it was communicated to the assessee as on 15 -2- 2020, hence it can be contended that the appeal was pending as on the specified date , i.e . 31 -1 -2020.  In Nareshbhai Bhagubhai & Ors v .UOI  ( 20190 15 SCC 1 ( Para 27 ) the Honourable Court held that unless the order is communicated it can be regarded anything more than being a provision in character , the Honourable Court referred Bacchhittar v .State of Punjab AIR 1963 SC 395  . Applying the  ratio laid down the Apex Court  it can be contended that the appeal was pending   as on the specified date  hence entitle for  availing the benefit of the scheme .

  

 

Please refer Circular No 7/ 2020  dt 4-03 2020  https://www.incometaxindia.gov.in/communications/circular/circular_no_7_2020.pdf    Q. no 36 . Which reads as under ; Q. 36 : In a case ITAT has passed order giving relief on two issaes and confirming three issues. Time to file appeal has not expired as on specified date. The taxpayer wishes to file declaration for the three issues which have gone against him. What about the other two issues as the taxpayer is not sure if the department will file appeal or not?

Ans : The Vivad se Vishwas allow declaration to be filed even when time to file appeal has not expired considering them to be a deemed appeal. Vivad se Vishwas also envisages option to assessee to file declaration for only his appeal or declaration for department appeal or declaration for both. Thus, in a given situation the appellant has a choice, he can only settle his deemed appeal on three issues, or he can settle department deemed appeal on two issues or he can settle both. If he decides to settle only his deemed appeal, then department would be free to file appeal on the two issues (where the assessee has got relief) as per  the extant procedure laid down and directions issued by the CBDT.

Accordingly the  assessee  can avail the benefit of the scheme .

If the Designated Authority  rejects the application the assessee may have to file writ before the High Court .

In case the assessee is not approaching the High Court  It may also desirable to file an appeal before the Tribunal  as soon as the application is rejected , with the application for condonation of delay and contest the appeal on merit

 

    

Query

As per rule 9 of the DTVSV scheme, the assessee having carried forward loss has two options –
1. Pay tax now on the amount by which loss is reduced and carry forward the whole amount by ignoring the amount of reduction
OR
2. carry forward the reduced amount of loss and not pay any tax now.

In our case, the assessee has a brought forward business loss, which is further carried forward due to no set-off available. While the current year business loss gets set off with CY LTCG. Thereby, having no current year business loss outstanding.

The AO contends that the assessee having brought forward loss is not eligible for the second option (because that option is available only in case of current year loss that is unabsorbed), and there remains a +ve income after PGBP addition made by order.

Kindly help and suggest if the AO’s contention is valid? and if so, where is the same mentioned in rules of DTVSV scheme.
Thankyou.
Answer

Please refer Q  No 53  and Ans . regarding the carried forward of  loss.

It seems the interpretation given the AO is correct .   The only remedy with the assessee is file Writ before the High Court , after receipt of the intimation from the Designated Authority .

 
Query

In search assessment only one issue is addition of Rs. 100 was made as bogus purchase, which was confirmed by CIT-A and ITAT after considering the arguments, held that the GP rate is around 10-11% in the earlier asst years, hence this year it confirmed GP rate at 20% and in the process gave relief of Rs. 80 out of Rs. 100 addition made. The department and the assessee have challenged the order before HC. The assessee files form1&2 under VsVs for Rs. 20 only and form 3 is issued and no demand is outstanding as the taxes paid in installments post assessment have been adjusted. After Form -3 was issued HC has disposed the departmental appeal by quashing the order of ITAT and directing it to decide the issue afresh.

What are the options available to the assessee. Does the income declared under VsVs becomes final or it has to be treated as non est in the light of order of HC.

In fresh order to be passed by the ITAT whether the income offered under VsVs will be telescoped ? or

(If ITAT confirms addition of Rs. 100 and whether the final income taxed will become Rs. 120/- or it will be Rs.80.(after considering Rs.20 declared under VsVs?)
Answer

When the matter came before the High Court , whether the availing of  the benefit of VSVS was brought to the notice of the Honourable Court .  If  it  was  not brought to the notice of the High Court it may lead to misrepresentation before the High Court . It may be desirable to file Review petition before the High Court  and get  a clarification . As the matter is set aside to the Tribunal , the Tribunal has to decide on merit .  The assessee cannot get the benefit of telescope of the amount offered under VS V.s .  The assessee may not get the credit for the  amount paid under Vsvs   if the addition is confirmed by the Tribunal .   

 
Query

Dear Sir,

I have filed 2 VSV scheme forms for A.y. 2010-11 and 2012-13.

In A.Y. 2010-11 Refund is 2 lakhs
In A.Y. 2012-13 Demand is 2.5 Lakhs

I Dont want refund of a.y. 2010-11 and want to get the same set-off against A.Y. 2012-13 and pay only difference. i.e. 0.5 lakhs.

Is the above treatment allowed in scheme. and how to avail that.

Thanks a lot sir in advance.
Answer

The Asssessee make declaration on the basis of refund due to the assessee. One has to be clear whether  the refund is determined by the Assessing Officer or it is only on the basis of calculation  made by the assessee. If the amount is quantified by the Department the assessee cam claim for the adjustment of the refund .    In case the refund is not adjusted the assesssee may have to move before the High Court by filing the writ petition .

 
Query

The assessment was done u/s 143(3) and addition was made. Tax and up to date interest was mentioned in the order issued by ITO. No search was done on the assessee. An appeal is pending. We filed for VSV and have received Form-3 mentioning the total amount of Tax as well as interest amount up to the date of order issued by ITO. A footnote on the Form-3 says that this has been treated as search case based on the information during search of some other assessee and Q no. 70 in FAQs applies. I feel that the basic idea of VSV was that only the disputed tax has to be paid. Kindly guide.
Answer

This is the view of the Department after the interpretation given by the CBDT in respect of search related matters . The view of the Department is not based on any legal precedent , however  the assesseee may have to file Writ before the High Court urging that the interpretation given by the CBDT is not correct.    

 
Query

THE ASSESSEE COMPANY HAS PAID TAX UNER MAT ON BOOK PROFIT OF 6090471 BECAUSE THE COMPANY WAS HAVING BROUGHT FORWARD LOSSES.THE ASSESSEE HAS PAID TAX UNDER MAT OF RS 1368347 AS PER RETURN OF INCOME.
ADDITTIONS OF RS 5616738 WAS MADE UNDER 143(3) DETAILS ARE AS UNDER:
BOOK PROFIT AS PER TAX RETURN 6090471
ADDITIONS U/S 143(3) 5616738
TOTAL INCOME AS PER ASSESSMENT ORDER 11707209
TAX @ 18% 2107298
SC 158047
EC 67960
TOTAL TAX PAYABLE 2333305
LESS PREPAID TAXES 1368347
ASSESSEE HAS MADE APPLICATION UNDER VISVAD SE VISHWAS SCHEME AND CIT HAS ISSUED FORM 3.AS PER FORM 3 TOTAL TAX PAYABLE IS 2333305( SAME AS PER ASSESSMENT ORDER). HOWEVER, BENEFIT OF PREPAID TAX OF RS. 1368347/- WAS GIVEN IN ASSESSMENT ORDER BUT AS PER FORM 3 ISSUED BY CIT BENEFIT OF PREPAID TAX OF RS. 1368347/-HAS NOT BEEN GIVEN. KINDLY ADVISE:
WHETHER CIT IS CORRECT IN NOT GIVING CREDIT OF RS. 1368347/- OF PREPAID TAX.
IF CIT IS NOT CORRECT THEN HOW TO PROCEED AND IN WHAT MANNER.

Answer

The assesse can make an application before the Designated Authority to rectify the mistake .  Designated  Authority shall be able to amend his order under section 5 to rectify any apparent errors  . In case no response is received the assessee may have to file Writ before the High Court .

 
Query

we had filed form 1 and form 2. form 3 also arrived it was given by them form 4 was also submitted after that when we file form 5 clarification does not come what to do about it?
Answer

It may be technical  error, try once again. In case the assessee has still some difficulties , they are advicesed  to contact the Designated Authority .

 
Query

I want to know can the amount of tax under vsvs scheme deposit online vide challan no.280 or any other challan
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

An assessment was made u/s 144 read with s.147 as the assessee did not file any return nor complied to any notices. While determining tax payable the AO did not allow credit for TDS and TCS. The rectification application filed u/s 154 to allow credit is not considered verbally saying that the TCS / TDS is not being allowed to be given credit to in case where no return is filed. The assessee filed VsV declaration for full tax demand and accordingly Form 3 has been issued asking full payment of taxes. When filing Form 4 here also the assessee is not allowed to make claim of credit for TDS / TCS as it allows furnishing details of paid challans only. What is the remedy available to the assessee is such a case ? Kindly guide. Thanks
Answer

The assessee  can move the rectification application before the  Designated Authority. The Designated has the power to rectify and issue  fresh demand . Alternatively pay the tax demanded by the designated Authority and claim refund of TDS and TCS  form the tax Department or file writ before the High Court .