| Query | If the Assessing officer has made 3 additions to the Total Income of assessee, but the Assessee wants to avail the benefit of Vivad se vishwas scheme only for a single addition & continue the appeal for the remaining additions, then in form 1&2 of VSV, where can we specify that the total additions are Rs.42,30,056 and the only Rs.17,50,000 is for filing under VSV? kindly suggest |
| Answer | Cherry picking of issues is not allowed in VSVA, this has been clarified in FAQ no. 14 of CBDT Circular No. 9 of 2020 dated April 22 of 2020. With respect to one order, the appellant must chose to settle all issues and then only he would be eligible to file declaration. |
| Query | AO raise demand of 10 lakhs without giving credit of 1lakh paid as SA tax so what is the amount of disputed tax in this case?? |
| Answer | From what we understand, AO has computed and raised a demand of Rs. 10 lakhs as per Form 3 of VSVA. The declarant will have to rectify the issue with the Designated Authority or else pursue a Writ Petition before a High Court against the demand. |
| Query | The Assessee won the matter in ITAT but lost the matter in High Court and filed a Review which too was dismissed. Then he filed a second Review on Ground that tax amount being below 50 lacs, dept should have withdrawn the Reference from the High Court, and the Order passed by the HC ought to be Recalled. |
| Answer | In S. C. Naregal v. CIT(2019)418 ITR 455/267Taxman563/311CTR 849 / 184 DTR 247 (SC) The High Court held that where a substantial question of law is involved, the mere fact that a monetary limit had been prescribed for filing appeals by the Department would not be a bar to deciding the appeal, and that even otherwise, this was an exceptional case where the Department was justified in filing the appeal, and proceeded to decide the appeal on the merits, answering the questions of law in favour of the Department, on appeal to the Supreme Court. Allowing the appeal the Court held that instruction No 5 of 2008 dt 15-5 2008 is applicable to pending matters, subject to two caveats provided in CIT v Surya Herbal Ltd (2013) 350 ITR 300 (SC). Followed DIT v. S.R.M. B. Dairy Farming (P) Ltd (2018) 400 ITR 9 (SC) The judgment of the High Court was set aside and the Department's appeals before the High Court treated as dismissed because of low tax effect, leaving the questions of law open. In CIT v. Meghalaya Steels Ltd. (2015) 377 ITR 112/279 CTR 189/124 DTR 33/234 Taxman 523 (SC) the court held that High Courts, being Courts of Record under Article 215, have the inherent power of review. There is nothing in section 260A(7) to restrict the applicability of the provisions of the CPC to S. 260A appeals. The honourable High Court may pass the order in favour of assessee.
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| Query | In case of my client, Transfer Pricing adjustment has been made because of which my returned loss is converted into a taxable income. However, the client is having brought forward business losses which if adjusted will lead to a NIL income. The AO has also initiated penalty under section 271(1)(c), 271AA and 271G. |
| Answer | Addressing query No. 1, As per FAQ No. 53 of Circular No. 9 of dated April 22, 2020; in a case where the dispute in relation to an assessment year relates to reduction of reduction of loss, the appellant shall have an option either to: (i) include the of tax related to loss in the amount of disputed tax and carry forward the loss amount (ii) to carry forward the loss.
Addressing Query No. 2, as per FAQ No. 8 of CBDT Circular 9 of 2020 dated April 22, 2020, If both quantum appeal covering disputed tax and appeal against penalty levied on such disputed tax for an assessment year are pending, the declarant is required to file a declaration form covering both disputed tax appeal and penalty appeal. However, he would be required to pay a relevant percentage of disputed tax only. Therefore, penalty under section 271(1)(c) of the Act will be waived.
As per FAQ No. 80 of CBDT Circular No. 21 of 2020 dated December 4, 2020. The assesssee is not eligible for waiver of penalty under section 271B, 271BA, 271DA etc. They have to be settled separately. It can be understood that penalty imposed on account of non-compliance are not waived along with quantum appeal and have to be settled separately. Therefore, penalty under section 271AA & 271G of the Act have to be settled separately at 25 per cent of the amount.
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| Query | Assessee is in appeal for disputed tax, meanwhile AO has also initiated penalty u/s 271(1(c). Will the penalty waived off once VSV is opted against disputed tax on Assessment order |
| Answer | As per FAQ No. 8 of CBDT Circular 9 of 2020 dated April 22, 2020, If both quantum appeal covering disputed tax and appeal against penalty levied on such disputed tax for an assessment year are pending, the declarant is required to file a declaration form covering both disputed tax appeal and penalty appeal. However, he would be required to pay relevant percentage of disputed tax only. Therefore, penalty under section 271(1)(c) of the Act will be waived.
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| Query | Where in case of an assessee where the application is filed by the assessee for disputed tax of Rs 10lakh. The DA accepts the application but alters the amount thereby determining the disputed tax of Rs 15Lakh that is higher than what was declared by the assessee. Whether the appeal that was earlier withdrawn due to application made for VSV can be restored? As, as per FAQ No 47 of Circular No 7, the assessee doesnot have an option to appeal against the order of DA. So whether he can revive the withdrawn appeal? |
| Answer | Yes, the appeal should be revived in the event VSVA is not proceeded with. Therefore , when an application is filed for withdrawal of appeal it is desirable to mention that in case the declaration is not accepted , the assessee may be given the permission to revive the appeal . The Assessee has also has the option to file a Writ Petition against the computation of the DA, if the same is erroneous.
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| Query | As the Form 1 & 2, i have to recieve refund and form 3 confirms the same, but while filing Form 4, it is showing as it is mandatory to fill up the Challan details, so what should be filled up at that place. Thank you in advance |
| Answer | If revenue has adjusted the amount of refund , then the assessee may write the date of adjustment , in case the revenue has recovered the tax by attaching the bank account or payment made to recovery officer the details of challans may be available with the assssee , the same may be written . In case excess payment of advance tax or self assessment tax is made the details will be available with the assessee , which can be filed . However if no details are available ,it is advisable to contact assessee’s designated authority and seek clarification on this issue. |
| Query | Assessee received the Hard copy of the Scrutiny Order U/s 143(3) on 30th December , 2019 . Assessee filed Appeal on 29th January, 2020. As per Dept. contention, they have sent the Order to the Authorized Representative (AR) e mail id on 19th December, 2019. The AR has not received the e mail. As per I T records, the assessee e mail id was registered. They have not sent the Order to Assessee e mail id. Based on the receipt of date of Hard copy, the assessee filed Appeal in time. So the Assessee has not filed any letter for condonation of delay. The CIT has not released Form 3 for the past 5 months. What are the chances of admitting the Form 1&2 under the Scheme.? The Assessee paid the tax amount as per the Assessee calculation. The AO confirmed orally that the calculation is correct. |
| Answer | Please verify in the appeal form which address is given or email of tax consultant is provided in the appeal memo . File an affidavit of the Tax consultant in case if he has not received the order by email . In case the email is not received by the Tax consultant the appeal of the assessee is on time .The VVS declaration may not be rejected . As per circular No 21/2020 dt 4-12 -2020 Q. N0 59. Whether the taxpayer in whose case the time limit for filing of appeal has expired before 3J'" Jan 2020 but an application for condonation of delay has been filed is eligible? Ans : If the time limit for filing appeal expired during the period from 1" April 2019 to 31" Jan, 2020 (both dates included in the period), and the application for condonation is filed before the date of issue of this circular, and appeal is admitted by the appellate authority before the date of filing of the declaration, such appeal will be deemed to be pending as on 31" Jan 2020.
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| Query | Assessee DREI. |
| Answer | The Assessee has a deemed appeal pending before the High Court as on the specified date. On the other hand, in light of FAQ 56 of CBDT Circular No. 21 of 2020 dated December 4, 2020, the assessee can settle the appeal pending before the ITAT under VSVA too. |