Re: Part E – Information related to Payment against Tax Arrears
Facts: – Assessee had paid demand of say Rs. 100 under protest during the appellate proceedings before CIT(A). CIT(A) gave substantial relief and Assessee did not challenge the order before the ITAT. In the appeal effect order, the AO adjusted say Rs. 25 against the undisputed demand and refunded Rs. 60 (Short – Rs. 15). Thereafter, department preferred an appeal on two issues against the order of CIT(A) before the ITAT. On one of the issues, the demand was upheld by ITAT and on other issue ITAT has set-aside to AO for fresh investigation. The Assessee has filed an appeal before the High Court for both the issues i.e. disallowance and set-aside, and is now desirous of opting for VsV Scheme.
Issues: –
i. In point (ii) of Part E of Form 1 – details of challan paid has to be given in case taxes (either in full/ in part) have already been paid. How does one show the details of Rs. 15 (partial unadjusted challan) there?
ii. Further, since on one of the issues, order was set-aside to the AO with specific directions to examine and verify the evidence afresh and the matter is currently pending with the AO, would tax be payable on this issue, if the Assessee opts for the VsV Scheme? If yes, would it be 100% /50%/Nil? [It may be noted that this issue was adjudicated in favour of the Assessee by the CIT(A)]. Reference is invited to Question no. 7 and Question no. 27 of the FAQs issued by CBDT on March 4, 2020.
iii. Which section Assessee must select under column (2) Part B of Form 1 – Section under which order has been passed? (254 or 143(3) r.w.s 254)
We would wish to answer to question no. ii first, so as to then answer other questions.
ii) What you seek to settle is Assessee’ appeal before HC and not an appeal filed by department. FAQs no. 7 has clarified that set aside issues can be settled. In such a scenario, since Assessee’s appeal is being settled, 100% would be applicable and not 50%.
iii) FAQ No. 7 & 27 make clear that with respect to set aside issues, declarant may fill the form as if an appeal is pending before CIT(A). Hence for set aside issue, it should be under section 143(3) r.w.s 254. And for other, as if the appeal is against ITAT order and pending before High Court.
i) Considering the above two answers, there could be a situation wherein amount is payable and not refundable. Hence you may fill the details of challan paid has to be given in case taxes (either in full/ in part) have already been paid after reducing the refund of tax amount (without interest u/s 244A)
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