AIFTP To Challenge Non-Extension Of Due Date Under Vivad Se Vishwas Scheme

The AIFTP has announced that it will file a Writ Petition before the Hon’ble Delhi High Court to challenge the inaction of the Government in the matter of extending the due date of 31st March 2020 for making payment under the Vivad Se Vishwas Act. It is pointed out that as the Act was enacted on March 18, 2020 with less than 10 working days from the cut-off date, it is virtually impossible for taxpayers to receive a certificate under the VSV Act from the designated authority to make the payment in full and final settlement of tax disputes. This is not only unfair to the tax payers but also will defeat the intention and purpose of this legislation.

The All India Federation of Tax Practitioners (AIFTP) will be filing the Writ Petition before The Hon’ble Delhi High Court praying for an issuance of a Writ of Mandamus to CBDT to extend the cut-off date of availing full benefits under the Direct Tax Vivad se Vishwas Act, 2020 (VSV Act) and other proceedings/filings/Notices which are time barred as on March 31, 2020.

The last day for beneficial payment under theVSV Act is March 31, 2020. Given the fact that the VSV Act was enacted on March 18, 2020 with less than 10 working days from the cut-off date, it is virtually impossible for the tax payers to receive a certificate under the VSV Act from a designated authority to make the payment in full and final settlement of tax disputes. This is not only unfair for the tax payers but also will defeat the intention and purpose of this legislation.

Further, the VSV Act does not provide for any provisionfor staggered payment. The AIFTP i.e. the Petitioners have made a representation before the Hon’ble Minister of Finance seeking an extension of dates for availing the benefit of the scheme, however no response is received till date.

The end of the Financial year has special significance under the Income tax Act, 1961 (Act), as it is also the last date for various filings such as belated return, revised return etc. It is the last day for passing the order for certain proceedings/ appellate proceedings under the Act; otherwise the said proceedings get time barred. Further, issuance of Notices such as Notice under section 148 of the Act for certain yearsinter alia get time barred beyond March 31, 2020 .

It is pertinent to note that the Coronavirus disease 2019 (COVOID-19) which has been declared a global pandemic has affected the day to day function of every sector of trade and commerce. It is understood that the virus is extremely contagious fatal and as of today has no cure.

In the backdrop of such prevalentforce majeure conditions, the number of working days have been further curtailed. This would create a difficulty in arranging for immediate funds to make payment under the VSV Act. Further, tax payers are not in a position to seek clarification from their consultants or the designated authorities vis-à-vis any submission under the Act. The interaction between the tax man and the tax payer has come to a standstill.

With a view to facilitate the interest of the tax payers and Tax Officials the AIFTP has decided to move before the Hon’ble Delhi High Court seeking an extension to the cut off date i.e. March 31, 2020 by one month for any provision under the Act. The prayer shall be equally applicable to the Department, so as to not cause any prejudice.