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

The assessee is not able to verify the Form as Aadhar OTP is not enabled and other modes of verification not possible. How to submit the Form 2 and subsequently Form 4
Answer

In Binoy Viswam v. UOI ( 2017)  396 ITR 66 (SC)  the Honourable Court held that  the proviso to section 139AA (2) cannot  be read retrospectively  as it take way vested rights .It will only have prospective effect  . In Hussain Indorewala v UOI ( 2018) 408 ITR  338 (Bom) (HC) held that in case of system does not accept the return the asssessee is at liberty to file their return of income in physical  form with jurisdictional Assessing Officer .  Assessee may write to the designated authority  the designated Authority  will be in a position to direct the concerned  officials to accept the form . In case no response is received the assessee may have to file writ before High Court
Query

We have filed appeal against the addition made at the time of processing of return of income in intimation order u/s 143(1). Such appeal is pending as on specified date. Can we take benefit of the scheme under VsVS against such appeal?
If the answer to the above question is affirmative, then it may further be noted that there is no option to select the order u/s 143(1) in the dorpdown box provided by the income tax department in form no.1 on income tax portal. In such cases, how to file application in from no. 1 under VsVS?
Answer

Yes the assessee is eligible for VSVA. FAQ 71 of CBDT Circular No. 21 of 2020 dated December 4, 2020, clarifies the same. In case of any technical issue with the portal, it is advisable to contact your designated authority and seek clarification on the issue.
Query

The assessee’s case was pending before CIT(Appeal) as on 31st January, 2020. The assessee has filed declaration under Vivad se Viswas scheme abd the same was accepted by the Authority.
My question is whether the assessee has to file petition before CIT(Appeal) for withdrawal of appeal.
Answer

No, as per section 4(2) of VSVA, upon the filing the declaration, any appeal pending before the Income Tax Appellate Tribunal or Commissioner (Appeals), in respect of the disputed income or disputed interest or disputed penalty or disputed fee and tax arrear shall be deemed to have been withdrawn from the date on which certificate under sub-section (1) of section 5 is issued by the designated authority. After receipt of certificate the asssessee may inform the CIT (A)

Query

AO made additions double the amount of information received from DDIT(inv ), appeal and rectification application filed. No decision is taken by AO on application 154. AO saying he cannot amend the order u/s 154. In given circumstances, on which amount assessee can go under VSV Scheme 2020
Answer

What we understand, there is a prima facie case of incorrect double addition and the AO refuses to rectify the same. Unfortunately, under VSVA, the assessee has no choice but to settle the unrectified Order as there is no evaluation of merits under VSVA.  The assessee may file Writ petition before the High Court and pray for direction to pass the order. High Court may direct the Assessing Officer to pass the order .
Query

FROM WHERE I GET FORM NO. 4 ?

WILL IT BE PROVIDED BY PCIT ONLINE ON FILLING PORTAL OR I HAVE TO SUBMIT IT ON MY OWN?

IF SUBMIT ON MY OWN, WHERE I FIND IT AND WHERE TO UPLOAD IT ?(UPLOADING STEPS)

THANKYOU
Answer

The same should be available on the portal after the receipt of Form 3 from the Department. In case of any technical issue with the portal, it is advisable to contact your designated authority and seek clarification on the issue.

 
Query

Hon high court rejected/dismissed reference on 30 November 2019 , the appellant has time of 90 days to file further appeal , can the appellant take benefit of Vivad to vishwas scheme?
Answer

Albeit, section 2(1)(a)(ii) of VSVA is silent with respect to a deemed appeal arising from an order of the High Court on matters other than a Writ Petition. There is no logical reasoning as to why an Appeal or Reference as section 2(1)(a)(i) of VSVA includes an Appeal pending before a High Court to be settled under VSVA.

VSVA being a beneficial legislation, the same should be interpreted in favour of the assessee. The assessee should file a declaration under the scheme and immediately approach the designated authority under VSVA. In the event of an unfavourable response from the department, it is advisable to approach the Hon’ble High Court by filing a Writ Petition. 
Query

Can addition U/S 68 cash credit in form of unsecured loan made in assessment settled under Vivad to vishwas scheme, can appellant be able to credit ?to capital account of unpaid loan still appearing in balance sheet of appellant
Answer

The CBDT Circular No 21/20 dt 4-12-2020 Q No 81 reads as under ;  In respect of some loan, addition was made U/S 68 of the Act. Appeal is
pending beforeCIT(A) and the assessee is eligible for opting Vivad se
Vlshwas. After making the payment of tax under Vivad se Vishwas, can the
assessee make entries in his books by crediting the said loan in his capital
account?

No, Vivad seVishwasis not an amnesty scheme. It only provides an option to settle appeals on contentious issues that are neither accepted by the Department nor the assessee. We have clarified earlier  stating that  the accounting entries will be independent and would not be saved by the scheme. It is fair to assume that the accounting entries by itself would not attract the income tax under the regular provisions of the Income Tax Act. However the liability to MAT u/s 115JB for that year would require to be contested if such tax is levied. The issue under the Companies Act and SEBI laws and the listing agreements and of the corporate governance and also of the CSR spends would require to be deeply examined. There are no immunity as  per the scheme.

 

 
Query

I have received refund for an AY along with interest u/s 244A. Disputed tax computed under VSVS is Nil after adjustment of refund received. Do I need to refund the interest u/s 244A amount received earlier?
Answer

The Act is silent on this issue; it can be assumed that the interest does not have to be refunded. As the collection only refers to disputed tax amount and waives interest. If the interest is wrongly granted the revenue may pass an order for refund of interest .
Query

Sirs, your goodselves replied for my earlier query that VSVS can be filed with Lodging No. and pray for withdrawal of the same and the Hon’ble Judges will pass orders on withdrawal.

Whether the Hon’ble High Court Judges will pass orders on SR No. / Lodging No. cases, when the cases are not numbered? Any lead case on this point as it is learnt that SR No. / Lodging No. cases are not treated as pending before the Hon’ble High Court and the same are treated as pending only on being numbered as Tax Cases.

I have also raised this query in my comment to your goodselves reply.

Kindly request your goodselves to clarify and advise.

Thanking you in anticipation.
Answer

Please move a praecipe before the respective Court and express your urgency in the matter. Several High Courts and Supreme Court orders exists on the basis of lodging number. Your lawyer may be well aware of the procedure for filing a  praecipe  each High Court have  their own procedure .   
Query

Addition has been made in 2 years – AY 05-06 and AY 08-09 under section 2(22)e – deemed dividend tax. Assessee, holding majority stake in company had taken unsecured loans in these 2 years.

AO has passed order in 2014 making addition under section 154 in both years levying penalty and interest. Assessee has repaid the loans in the same year these were obtained from the company. Presently case is waiting hearing before CIT(A). Meanwhile Assessee has passed away and is being represented by legal heir who is now a majority shareholder of the company.

Question is if under VSVT scheme if legal heir of assessee wishes to settle both cases by paying tax amount how is the loan account which was at the heart of the matter treated? If we are accepting the amount received by assessee was indeed deemed dividend and book the same under income from other sources, can the loan amount be considered to be receivable again from company as deemed dividend? Company is willing to give undertaking that said amount was indeed deemed dividend and is payable to assessee.

Briefly after accepting the said amount as deemed dividend and paying tax on it, is it still considered loan amount? Can the legal heir file a fresh return of income showing the said deemed dividend as income from other sources, pay tax under VSVT and claim the said deemed dividend from the company?
Answer

If the assessee desires to settle the issue , the assessee has to pay the tax  on the disputed amount pending in the appeal . Once the tax payment is made the interest and penalty will be waived .  Under the scheme there is no provision for filing  a revised return by legal heirs .