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

The department has filed a miscellaneous applications after the case was declared in favour of assesse!
I have received the refund amount and no demand is pending !
Can we opt for the scheme for miscellaneous applications
Answer

The MA can be settled under the Scheme only if the same is dismissed in limine i.e. at the beginning of the proceedings. This has been clarified at FAQ No. 61 of CBDT Circular No. 21 of 2020 dated December 4, 2020. The Miscellaneous application of the Revenue may be dismissed  as  per the ratio laid down by Bombay High Court in CIT v. Ramesh Electric and Trading Co (1993) 203 ITR 497 ( Bom)  ( HC)  
Query

I refer to Question 80 of FAQ wherein it is mentioned that appeal in respect to penalties which are not in relation to quantum assessment needs to be settled separately.

For one of my client, we have received penalty notice under section 271(1)(c), 271AA and 271G, here it is important to mention that penalty is only initiated and no penalty order is yet passed by the AO. Our clients are going in VsV for quantum appeal.

If our clients opt for VsV for quantum whether penalty under section 271(1)(c), 271AA and 271G which was initiated but not levied would be waived off?
Answer

Please refer Q.no 80  Whether appeal against penalties that are not related to quantum assessment like penalty U/S 271B, 271BA, 271DA of the Act etc. are also waived upon settlement of appeal relating to 'disputed tax?  Ans . No, appeal against such penalty order is required to be settled separately.

In the said answer the S. 271AA and 271G  are  not covered . S. 271AA deals with failure to keep and maintain information and documents etc and S.271G deals with  penalty for failure to furnish information or document  under section 92D .  Accordingly the revenue may levy the penalty , the assessee may not get the immunity  . Considering the spirt of the Scheme once the tax inn dispute is settled the revenue may not levy the penalty .

Query

I have filed the details and am awaiting issuance of Form 3 by CIT. How many days does it take for the CIT to issue form 3. Is there something that needs to be done at the assessee’s end after he has submitted the forms. The system show this message: “Awaiting Form 3 from CIT”
Answer

 The declarant has to await he receipt of Form 3. There is a delay in issuance of Form 3  in  few cases  of declarants under VSVA.

 
Query

Dear Sir,
(NON SEARCH CASE)
Form 1 is filed with respect to Disputed Tax with CIT Appeals.
Total Demand as per Order assume Rs 100/-
out of which interest is Rs 20/-
Then , Disputed Tax is Rs 80.

We have Filled Schedule 1, where we have shown Disputed Tax of Rs 80 & Disputed Interest of Rs 20/-. Therefore, Tax payable for VSV will be Rs 80. (is this Treatment correct).

Error is showing:-
1. Fill Tax payable amount in search case payable before 31.03.2020 and after 31.03.2020. (Here , we have stated amount as 0.)
2. Other Error – Fill Schedule D. (where we have filled all as 0).
We could not detect the error.
Kindly resolve the issue as soon as possible.
Thank you in advance.
Answer

This is a common technical error being faced by declarants and consultants. Kindly try keeping the search columns empty and not as “0”. If error still persists, it is advisable to contact your designated authority under VSVA. In case no response is received the Assessee may file writ before High Court .

 
Query

As per Q No. 25 of FAQ of 4th Dec the effect of Pending rectification can be adjusted in the disputed Tax amount. What if the rectification is rejected in case of pending rectification where there will be a reduction in Tax liability on account of the pending rectification
Answer

In the event of rectification, the declarant has no choice but to accept the Order of the Department without changes. If the error is apparent and on the face of the Order, the declarant could also consider filing a Writ Petition before the High Court.
Query

Dear Sir,
For filing of form 1, against the Demand raised by CPC vide Intimation U/s. 143(1)(a)(iv), which section is to be selected. Scroll down box does not includes Section 143(1).

Answer

This is a common technical error being faced by declarants and consultants.  Department must have  made correction after the circular No 21 of 2020 dt  4-12 -2020 , Ans  to Q.No 71  Ans .   Appeal filed against intimation u/s 143(1) of the Act is eligible under Vivad se Vishwas if adjustment has been made under sub-clauses (iii) to (vi) of clause (a) of section 143(1) of the Act.  .Please tray again , in case still there is an error,  it is advisable to contact your designated authority under VSVA. In case no response is received , the assessee may file writ before High Court .
Query

ITAT set aside the order to AO for assessment before 31/01/2020.Can assessee avail of
VSVS.
Answer

 Yes it can be considered as deemed appeal , hence  the the declarant is eligible for VSVA
Query

Will 234d interest will be waived off while calculating amount payable under vsvs 2000?
Answer

Please refer S. 234D (2) which says that where as a result of an order u/s 154  or 155 or 250 or 254 or 260 or  262  or 263 or 264 etc is passed the amount of refund granted under Sub section 143(1) is held to be correctly allowed , either in whole or in part as the case may be then interest chargeable , if any ,under section sub -section (1) shall be reduced accordingly. Accordingly once the issue is settled under VSVSchme , the AO has to pass consequential order reducing the interest

Query

I am secretary of credit co-operative society. The society eligible for the deduction under 80P(2)(a)(i) .Net profit of the society is Rs 50,00,000/- for the Financial year 2019-20. After giving effect of disallowance of Rs 6,00,000/- under section 40A(3) and another disallowance of Rs 4,00,000/- under section 40a(ia),the gross total income comes to 60,00,000/-.
What will be my eligible deduction under section 80P(2)(a)(i) of the income tax act?
Whether it is of Rs 50,00,000/- or 60,00,000/-? is it liable to pay taxes on disallowances?
Answer

Reference is drawn to the decision of the Hon’ble ITAT Kolkata Bench in the case of Goghat Thana Large Sized Primary Cooperative Agricultural Marketing Society Ltd. v. ACIT [2018] 100 taxmann.com 460 (Kolkata - Trib.)[30-11-2018] where the Tribunal relied on CBDT Circular No. 37 of 2016, dated November 02, 2016 in the context of enhanced claim of deduction under section 80IA with regard to disallowances made under sections 40a(ia), 40A(3) and 43B of the Act etc, and held that assessee's income was eligible for deduction under section 80P of the Act and, thus, aforesaid disallowance would only lead to enhanced deduction under section 80P of the Act
Query

One assessee has submitted an appeal before the Commissioner of Income Tax (Appeals) against the order u/s 144 of the IT Act. After submission of the appeal, the assessee was waiting for the date of hearing. Meanwhile, the Income Tax Officer issued a notice under section 154 of the Income Tax Act and increase the demand previously created under the head interest. There was no compliance of notice under section 154 of the IT Act issued by the Income Tax Officer. Now the question is German in respect of the amount of total demand which has to be filed in the prescribed form of Vivad Se Vishwas No 1. Whether the interest increased by virtue of rectification, subsequently after furnishing of appeal can be the subject matter of the Vivad Se Vishwas. There shall be a mismatch in demand reflected in the appeal and actual demand because in the appeal the amount of tax and interest has to be mentioned. Whereas the present demand is more than the original because the demand has been increased by way of the order passed under section 154 of the IT Act.
The part of increased interest is related to 115 BBE and even in the ground of appeal, this ground has been taken.
Hope you will let me know your esteem opinion.
With regards
Sumitra Maru
Answer

Under VSVA, interest and penalty are waived and the declarant has to only settled the disputed tax amount. Therefore, the assessee has to pay only the disputed tax amount.