An appeal for A.Y. 2011-12 is filed by OBC Ltd, a listed company, in time before the CIT(A) against the order of AO making an addition on account of unexplained cash credits u/s 68 and for the disallowance of purchases from unregistered dealers. The assessee has filed a declaration u/s 4 to settle the dispute in appeal under the scheme. He has been advised to capitalise the additional income comprised in the scheme by passing the accounting entries in the financial year 2020-2021. You are required to advise him on the consequences of the declaration and of the accounting entries.

Whether a declaration u/s 4 can be filed by a person who has filed an appeal against the order u/s 263 for revision by the Commissioner directing the AO to make specific disallowance/addition?

Consider a case where appeals pertaining to ACo being an amalgamating company are proposed to be settled under VSV by amalgamated company. In relation thereto clarification may be required as to in whose name and PAN declaration is to be filed, who could be signatory to sign the declaration, payment of disputed tax is made in whose name, how credit for prepaid taxes of amalgamating company be considered while computing disputed tax, etc.?

In cases of reduction in loss where taxpayer settles the dispute by payment of notional tax with a right to carry forward full loss as claimed. However, assessment records may continue to reflect the reduced losses as per the assessment order.
Also, what is the mechanism to upgrade the assessment records with eligible amount of loss so as to avoid possible mis-match in subsequent year where loss is to be setoff? Similar issue may also arise in case of reduction in MAT / AMT credit as well.

It is understood that any taxes paid under ITA whether by way of advance tax or TDS or regular assessment tax etc. are reflected in Form 26AS of the taxpayer for the given year. The said form is considered by the tax authority as proof of payment. Therefore, if such form is not updated on real time basis reflecting all the payments for any reason, it will create hurdle or delay in reconciling computation of disputed tax with payment already made by the taxpayer. What is the procedure to resolve such issues?

Whether declaration once filed can be withdrawn / revised for any valid reason? It cannot be revised.

Whether Authorised Representative (AR) can file declaration under VSV on behalf of the taxpayer?

What is the time limit for DA to pass an order (post receipt of intimation of payment made by taxpayer and proof of withdrawal of appeal wherever applicable)?

What is the time limit for granting refund due under VSV to declarant? Whether such refund can be adjusted against outstanding demands under ITA?

Whether taxpayer will be permitted to file second declaration where first declaration gets disqualified due to any reason-say, non-payment of disputed tax under s. 5(2) due to financial difficulty?