| Query | Addition on certain ground u/s 14A was made in Original Assessment Order us 143(3) say for Rs. 50 Lakhs. Subsequently addition of Rs. 50.00 Lakhs was again made on the same ground in Assessment Order u/s 143(3) r.w. 153(3). As per the present scheme addition for multiple orders for the same assessment year can be offered under the Scheme. As per Q 19 of Clarification dated 22.04.2020 if multiple orders are being settled disputed tax will aggregate amount of tax in both the appeals i.e Rs. 1.00 Crores instead of addition of Rs. 50.00 Lakhs in both the order for same ground. This will lead to double taxation of same addition for the same ground for the same assessment year. |
| Answer | According to us only one declaration to be filed . The assessee may have to pay tax only on Rs 50 lakhs . If revenue insists for payment of tax on Rs 1 crores , it may lead to double taxation . One may challenge the said computation by filing Writ petition before High Court.
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| Query | Whether by virtue of provisions of clause 5(3) of the VSV Bill, once application made is accepted and taxes paid thereon, whether the Assessee would be eligible for immunity from other laws (Benami, etc.) |
| Answer | As we understand, none of the mater(s) covered under an order of section 5 of VSVA shall be reopened in any other proceeding under the Income-tax Act or under any other law for the time being in force or under any agreement, whether for protection of investment or otherwise, entered into by India with any other country or territory outside India. It can be interpreted that, matters which aren’t covered under the said order can be reopened. It would be precarious to assume a blanket clearance for a particular assessment year. Once certificate is issued it is binding on the revenue , hence none of the mater(s) covered under an order of section 5 of VSVA shall be reopened. In Killick Nixon Ltd. v. Dy. CIT (2002) 258 ITR 627 / 125 Taxman1055/(2003)172Taxation373 / 178 CTR 387 (SC) dealing with S.87 of the Kar Vivad Samadan Scheme , the Honourable Supreme Court held that ,upon declaration being made tax arrears being determined, paid and certificate issued under KVSS, there is no jurisdiction for the Assessing Officer to reopen the assessment by a notice under section 148 except where case falls under the proviso (2) of sub-section (1) of section 90 of the scheme and it is found that any particular material furnished in the declaration is found to be false. The assessee will be eligible for immunity from other laws.
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| Query | Order of ITAT passed on dated 30.10.2019. Assessee did not file writ to High Court. Time Limit expired on 04.04.2020 (i.e. after 31.01.2020). Now after entering this information in PART-B, Schedule No. VI of SCHEDULE-A is not being enabled for editing. Therefore Net amount payable by appellant cannot be calculated in PART- C,D,E & F. How to resolve the issue? |
| Answer | The assessee has a deemed appeal pending as on the specified date. Therefore, eligible under VSVA. Practical issues regarding filling of form need to be resolved by contacting your respective designated authority. |
| Query | CIT(A) refused to condone delay in filing of appeal against penalty order. Assesse filed appeal against the CIT(A) order wit the ITAT. In the mean time can assessee take the benefit of the scheme. |
| Answer | There is no clarity on condonation of delay. Our suggestion will be make an early hearing of the appeal before the ITAT . If the assessee is able to explain the condonation of delay , The Tribunal will condone the delay hence the assessee can avail the benefit of the Scheme. One may refer the following case laws which may be relevant, in CIT v. Shatrusailya Digvijaysingh Jadeja (2005) 277 ITR 435/ 147 Taxman 566/ 197 CTR 590 (SC) rendered in the context of similar provisions of KVSS, 1998, referring the judgement In the case of Dr. Mrs. Renuka Datla v. CIT (2003) 259 ITR 258 (SC) has held on interpretation of section 95(i)(c) that if the appeal or revision is pending on the date of the filing of the declaration under section 88 of the Scheme, it is not for the DA to hold that the appeal/revision was 'sham', 'ineffective' or 'infructuous'. In the case of Raja Kulkarni v. State of Bombay AIR 1954 SC 73, the Supreme Court laid down that when a section contemplates pendency of an appeal, what is required for its application is that an appeal should be pending and in such a case there is no need to introduce the qualification that it should be valid or competent. Whether an appeal is valid or competent is a question entirely for the Appellate Court before whom the appeal is filed to decide and such determination is possible only after the appeal is heard but there is nothing to prevent a party from filing an appeal which may ultimately be found to be incompetent, e.g., when it is held to be barred by limitation. From the mere fact that such an appeal is held to be unmaintainable on any ground whatsoever, it does not follow that there was no appeal pending before the Court. Accordingly the court held that for the afore stated reasons, orders of the designated authority rejecting the declarations filed by the assessee were to be quashed. No infirmity, to that extent, was found in the impugned judgment of the High Court. The appeal was to be dismissed accordingly. In Tirupati Balaji Developers (P.) Ltd. v. State of Bihar [2004] 5 SCC 1, in which it has been held that an appeal does not cease to be an appeal though irregular and incompetent.
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| Query | Please clarify that reply to question no. 22 in last line it has been clarified that “assessee covered under prosecution is not eligible to file unless prosecution is compounded before filing the declaration.” For compounding assessee has to pay Tax, Interest, penalty relating to offence, further undertakes to pay compounding charges, withdraw the appeals . Is it mean that the assessee had first to pay compounding fee equal to 125/150 percent of tax sought to be evaded, compounding charges then only he can go for VSV. Then what benefit such assessee gets from this scheme. |
| Answer | Under the Scheme of Income tax, Quantum proceedings, penalty proceedings and prosecution proceedings are separate. Compounding charges are with respect to settlement of the prosecution proceedings and to avoid imprisonment; this has no bearing on the quantum proceedings. What the last lines means is that, where an assessee has compounded the matter i.e. although a case of instituted against him in the criminal court, he shall be eligible to settle the quantum appeal under VSVA. Circular No 9 of 2020 dt 22-04- 2020 also clarified once again clarified the position on prosecution proceedings . Further, the right of compounding is not a one time feature, please refer to Guidelines for Compounding of Offences under Direct Tax Laws, 2019 dated June 14, 2019. Future compounding will not be affected .
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| Query | Penalties have been levied on my client u/s 271A for not maintaining books of accounts u/s 44AA & also u/s 271B for not getting the said books of accounts audited u/s 44AB for the same assessment year. These proceedings have been initiated under separate notices issued under separate sections and as such are two different penalty proceedings. I wish to settle Penalty u/s 271A but continue to contest penalty u/s 271B. Is it possible to do so without impacting or influencing the outcome of the future proceedings u/s 271B due to acceptance and settlement of penalty u/s 271A. |
| Answer | As we understand, there are two separate penalty appeals. As per explanation to Section 5 of VSVA, a declaration under this Act shall not amount to conceding the tax position and it shall not be lawful for the income-tax authority or the declarant being a party in appeal or writ petition or special leave petition to contend that the declarant or the income-tax authority, as the case may be, has acquiesced in the decision on the disputed issue by settling the dispute. Please refer Circular no 9 /2020 dt 22-04 2020 Q. No 52 which reads as under : Will the result of this Vivad se Vishwas be applied to same issues pending before AO? Answer : NO, only the issues covered in the declaration are settled in the dispute without any prejudice to same issues pending in other cases. It has been Clarified that making a declaration under this Act shall not amount to conceding the tax position and it shall not be lawful for the Income -tax authority or the declarant being a part in appeal or writ or in SLP to contend that the declarant or the income-tax authority, as the case may be, has acquiesced in the decision on the disputed issue by settling the dispute. In UCO Bank v. CIT (1990) 237 ITR 889/ 104 Taxman 547/ 154 CTR 88 (SC) the Apex Court held that , the Circular is binding on the revenue. The power is given for the purpose of just, proper and efficient management of the work of assessment and in public interest. It is a beneficial power given to the Board for proper administration of fiscal law so that undue hardship may not be caused to the assessee and the fiscal laws may be correctly applied. Hard cases which can be properly categorised as belonging to a class, can thus be given the benefit of relaxation of law by issuing circulars binding on the taxing authorities. Accordingly the settlement of dispute should not impact the outcome of the other penalty proceedings.
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| Query | Assessee is a Govt. salaried employee and in 2013 CBI filed a FIR against him and his spouce and the criminal case under Pmla is going on but no charge sheet is yet filed this . Assessee wife like to settle her pending case under Vivad SE Viswas. Is she is eligible to take benefit of Vivad SE Viswas. |
| Answer | Given the brief facts, As per Section 9 (c) of VSVA, the provisions of this Act does not apply to a person in respect of whom prosecution for any offence punishable under the provisions of the Prevention of Money Laundering Act, 2002 has been instituted on or before the filing of the declaration or such person has been convicted of any such offence punishable under any of those Acts. Since the wife is not “that person” she should eligible under VSVA. In State, CBI v. Shashi Balasubramanian (2006) 157 Taxman 261 / 206 CTR 587 / 289 ITR 8 (SC) Dealing with S . 91 of the Kar Vivad Samadhan Scheme, the Court held that , Immunity under Kar Vivad Scheme is not available in respect of offences under Prevention of Corruption Act. Public servants who can never file declaration would not come within the purview thereof. Section 95 Clause (iii) would be attracted, if inter alia, any prosecution for any offence enumerated there under has been initiated on or before filing of declaration. On the facts no prosecution or charge is levied against the wife of the salaried employee of Govt , hence she can avail the benefit of the Scheme .
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