Download CBDT Clarifications (FAQs) On The Direct Tax Vivad se Vishwas Bill, 2020

The CBDT has vide Circular No.7/2020 dated 4th March, 2020 provided clarification on a number of controversial issues relating to the Direct Tax Vivad se Vishwas Bill, 2020

Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

    
New Delhi, 5th March, 2020

 

PRESS RELEASE

CBDT issues FAQs on Direct Tax Vivad se Vishwas Scheme, 2020

The ‘Vivad se Vishwas’ Scheme was announced during the Union Budget, 2020, to provide for dispute resolution in respect of pending income tax litigation. Pursuant to the Budget announcement, the Direct Tax Vivad se Vishwas Bill, 2020 (hereinafter called Vivad se Vishwas) was introduced in the Lok Sabha on 5th of February, 2020 and passed by it on 4th of March, 2020.

The objective of Vivad se Vishwas is to inter alia reduce pending income tax litigation, generate timely revenue for the Government and benefit taxpayers by providing them peace of mind, certainty and savings on account of time and resources that would otherwise be spent on the long-drawn and vexatious litigation process.

Subsequently, based on the representations received from the stakeholders regarding its various provisions, official amendments to Vivad se Vishwas have been proposed. These amendments seek to widen the scope of Vivad se Vishwas and reduce the compliance burden on taxpayers.

After introduction of Vivad se Vishwas in Lok Sabha, several queries have been received from the stakeholders seeking clarifications in respect of various provisions contained in the Scheme.

After considering various queries received from stakeholders, CBDT has clarified the same in the form of answers to frequently asked questions (FAQs) vide Circular No.7/2020 dated 04.03.2020.

The FAQs contain clarifications on scope/eligibility, calculation of disputed tax, procedure related to payment of disputed tax and consequential benefits to the declarant. These FAQs are available on the official website of the Income Tax Department at https://www.incometaxindia.gov.in/communications/circular/circular_no_7_2020.pdf.

It is reiterated that these clarifications are, however, subject to approval and passing of Vivad se Vishwas by the Parliament and receiving assent of the Hon’ble President of India. 

(Surabhi Ahluwalia)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT.

Circular No.7/2020
F. No. IT(A)/1I2020-TPL
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
****
Dated: 4th March, 2020
Sub.: Clarifications on provisions of the Direct Tax Vivad se Vishwas Bill, 2020 – reg.
During the Union Budget, 2020 presentation, the ‘Vivad se Vishwas’ Scheme was
announced to provide for dispute resolution in respect of pending income tax litigation. Pursuant to
Budget announcement, the Direct Tax Vivad se Vishwas Bill, 2020 (Vivad se Vishwas) was
introduced in the Lok Sabha on 5th Feb, 2020. The objective of Vivad se Vishwas is to inter alia
reduce pending income tax litigation, generate timely revenue for the Government and benefit
taxpayers by providing them peace of mind, certainty and savings on account of time and resources
that would otherwise be spent on the long-drawn and vexatious litigation process. Subsequently,
based on the representations received from the stakeholders regarding its various provisions, official
amendments to Vivad se Vishwas have been proposed. These amendments seek to widen the scope
of Vivad se Vlshwus and reduce the compliance burden on taxpayers.
2. After introduction of Vivad se Vishwas in Lok Sabha, several queries have been received from
the stakebolders seeking clarifications in respect of various provisions contained therein.
Government has considered these queries and decided to clarify the same in form of answers to
frequently asked questions (FAQs). These clarifications are, however, subject to approval and
passing of Vivad se Vishwas by the Parliament and receiving assenLllLthc_H-‘ln’hleJ’n:sidenLnf_
India.
“QUESTIONS ON SCOPE/ ELIGIBILITY (Q. No.1 – 24)”
Question No.
Auswer:
1. Which appeals are covered under the Vivad se Vishwas?
Appeals pending before the appellate forum [Commissioner (Appeals),
Income Tax Appellate Tribunal (!TAT), High Court or Supreme Court],
and writ petitions pending before High Court (HC) or Supreme Court
(SC) or special leave petitions (SLPs) pending before SC as on the 31,t
day of January, 2020 (specified date) are covered. Cases where the
order has been passed but the time limit for filing appeal under the
Income-tax Act, 1961 (the Act) against the order has not expired as on
the specified date are also covered. Similarly, cases where objections
filed by the assessee against draft order are pending with Dispute
Resolution Panel (DRP) or where DRP has given the directions but the
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Assessing Officer (AO) has not yet passed the finai order on or before
the specified date are also covered. Cases where revision application
under section 264 of the Act is pending before the Principal
Commissioner or Commissioner are covered as well. Further, where a
declarant has initiated any proceeding or given any notice for
arbitration, conciliation or mediation as referred to in clause 4 of the Bill
is also covered.
2. If there is no appeal pending but the case is pending in arbitration,
will the taxpayer be eligible to apply under Vivad se Vishwas? If yes
what will be the disputed tax?
An assessee whose case is pending in arbitration is eligible to apply for
settlement under Vivad se Vishwas even if no appeal is pending. In such
case assessee should fill the relevant details applicable in his case in the
declaration form. The disputed tax in this case would be the tax
(including surcharge and cess) on the disputed income with reference to
which the arbitration has been filed.
3. Whether Vivad se Vishwas can be availed for proceedings pending
before Authority of Advance Ruling (AAR)? If a writ is pending
against order passed by AAR in a He will that case be covered and
how disputed tax to be calculated?
Vivad se Vishwas is not available for disputes pending before AAR.
However, if the order passed by AAR has determined the total income
of an assessment year and writ against such order is pending in HC, the
appellant would be eligible to apply for the Vivad se Vishwas. The
disputed tax in that case shall be calcnlated as per the order of the AAR
and accordingly, wherever required, consequential order shall be passed
by the AO. However, if the order of AAR has not determined the total
income, it would not be possible to calculate disputed tax and hence
such cases would not be covered. To illustrate, if AAR has given a
ruling that there exists Permanent Establishment (PE) in India but the
AO has not yet determined the amount to be attributed to such PE, such
cases cannot be covered since total income has not yet been determined.
4. An appeal has been filed against the interest levied on assessed tax;
however, there is no dispute against the amount of assessed tax. Can
the benefit ofthe Vivad se Vishwas be availed?
Declarations covering disputed interest (where there is no dispute on tax
corresponding to such interest) are eligible under Vivad se Vishwas. It
may be clarified that if there is a dispute on tax amount, and a
declaration is filed for the disputed tax, the full amount of interest levied
or leviable related to the disputed tax shall be waived.
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5. What if the disputed demand including interest has been paid by the
appellant while being in appeal?
Appeals in which appellant has already paid the disputed demand either
partly or fully are also covered. If the amount of tax paid is more than
amount payable under Vivad se Vishwas, the appellant will be entitled
to refund without interest under section 244A of the Act.
6. Can the benefit of the Vivad se Vishwas be availed, if a search and
seizure action by the Income-tax Department has been initiated
against a taxpayer?
Case where the tax arrears relate to an assessment made under section
143(3) or section 144 or section 153A or section 153C of the Act on the
basis of search initiated under section 132 or section 132A of the Act
are excluded if the amount of disputed tax exceeds five crore rupees in
that assessment year.
Thus, if there are 7 assessments of an assessee relating to search &
seizure, out of which in 4 assessments, disputed tax is five crore rupees
or less in each year and in remaining 3 assessments, disputed tax is
more than five crore rupees in each year, declaration can be filed for 4
assessments where disputed tax is five crore rupees or less in each year.
7. If assessment has been set aside for giving proper opportunity to an
assessee on the additions carried out by the AO. Can he avail the
Vivad se Vishwas with respect to such additions?
If an appellate authority has set aside an order (except where assessment
is cancelled with a direction that assessment is to be framed de novo) to
the file of the AO for giving proper opportunity or to carry out fresh
examination of the issue with specific direction, the assessee would be
eligible to avail Vivad se Vishwas. However, the appellant shall also be
required to settle other issues, if any, which have not been set aside in
that assessment and in respect of which either appeal is pending or time
to file appeal has not expired. In such a case disputed tax shall be the tax
(including surcharge and cess) which would have been payable had the
addition in respect of which the order was set aside by the appellate
authority was to be repeated by the AO.
In such cases while filling the declaration form, appellant can indicate
that with respect to the set-aside issues the appeal is pending with the
Commissioner(Appeals).
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8. Imagine a case where an appellant desires to settle concealment
penalty appeal pending before CIT(A), while continuing to litigate
quantum appeal that has travelled to higher appellate forum.
Considering these are two independent and different appeals, whether
appellant can settle one to exclusion of others? If yes, whether
settlement ofpenalty appeal will have any impact on quantum appeal?
If both quantum appeal covering disputed tax and appeal against penalty
levied on such disputed tax for an assessment year are pending, the
declarant is required to file a declaration form giving details of both
disputed tax appeal and penalty appeal. However, he would be required
to pay relevant percentage of disputed tax only. Further, it would not be
possible for the appellant to apply for settlement of penalty appeal only
when the appeal on disputed tax related to such penalty is still pending.
9. Is there any necessity that to qualifY under the Vivad se Vishwas, the
appellant should have tax demand in arrears as on the date offiling
declaration?
Vivad se Vishwas can be availed by the appellant irrespective of
whether the tax arrears have been paid either partly or fully or are
outstanding.
10. Whether 234E and 234Fappeals are covered?
If appeal has been filed against imposition of fees under sections 234E
or 234F of the Act, the appellant would be eligible to file declaration for
disputed fee and amount payable under Vivad se Vishwas shall be 25%
or 30% of the disputed fee, as the case may be.
If the fee imposed under section 234E or 234F pertains to a year in
which there is disputed tax, the settlement of disputed tax will not settle
the disputed fee. If assessee wants to settle disputed fee, he will need to
settle it separately by paying 25% or 30% of the disputed fee, as the
case may be.
11. In case where disputed tax contains qualifying tax arrears as also
non-qualifying tax arrears (such as, tax arrears relating to assessment
made in respect of undisclosedforeign income):
(i) Whether assessee is eligible to the Vivad se Vishwas itself?
(ii) If eligible, whether quantification of disputed tax can
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exclude/ignore non-qualifying tax arrears?
If the tax arrears include tax on issues that are excluded from the Vivad
se Vishwas, such cases are not eligible to file declaration under Vivad se
Vishwas. There is no provision nuder Vivad se Vishwas to settle part of
a pending dispute in relation to an appeal or writ or SLP for an
assessment year. For one pending appeal, all the issues are required to
be settled and if anyone of the issues makes the declaration invalid, no
declaration can be filed.
12. If a writ has been filed against a notice issued under section 148 ofthe
Act and no assessment order has been passed consequent to that
section 148 notice, will such case be eligible to file declaration under
Vivad se Vishwas?
The assessee would not be eligible for Vivad se Vishwas as there is no
determination of income against the said notice.
13. With respect to interest under section 234A, 234B or 234C, there is no
appeal but the assessee has filed waiver application before the
competent authority which is pending as on 31 Jan 2020? Will such
cases be covered under Vivad se Vishwas?
No, such cases are not covered. Waiver applications are not appeal
within the meaning of Vivad se Vlshwas.
14. Whether assessee can avail of the Vivad se Vishwas for some of the
issues and not accept other issues?
Refer to answer to question no II. Picking and choosing issues for
settlement of an appeal is not allowed. With respect to one order, the
appellant must chose to settle all issues and then only he would be
eligible to file declaration.
15. Will delay in deposit of TDSITCS be also covered under Vivad se
Vishwas?
The disputed tax includes tax related to tax deducted at source (TDS)
and tax collection at source (TCS) which are disputed and pending in
appeal. However, if there is no dispute related to TDS or TCS and there
is delay in depositing such TDSITCS, then the dispute pending in appeal
related to interest levied due to such delay will be covered under Vivad
se Vishwas.
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16. Are cases pending before DRP covered? What if the assessee has not
filed objections with DRP and the AO has not yet passed the final
order?
Yes, a person who has filed his objections before the DRP under section
l44C of the Act and the DRP has not issued any direction on or before
the specified date as well as a person in whose case the DRP has issued
directions but the AO has not passed the final assessment order on or
before the specified date, is eligible under Vivad se Vishwas.
It is further clarified that there could be a situation where the AO has
passed a draft assessment order before the specified date, Assessee
decides not to file objection with the DRP and is waiting for final order
to be passed by the AO against which he can file appeal with
Commissioner(Appeals). In this situation even if the final assessment
order is not passed on or before the specified date, the assessee would
be considered as the appellant and would be eligible to settle his dispute
under Vivad se Vishwas, Disputed tax in such case would be computed
based on the draft order. In the declaration form, the appellant in this
situation should indicate that time to file objection with DRP has not
expired,
17. If Cl’I'(Appeuls} has given an enhancement notice, can the appellant
avail the Vivad se Vishwas after including proposed enhanced income
in the total assessedincome?
The amendment proposed in the Vivad se Vishwas allows the
declaration even in cases where CIT (Appeals) has issued enhancement
notice on or before 31st January, 2020. However, the disputed tax in
such cases shall be increased by the amount of tax pertaining to issues
for which notice of enhancement has been issued.
18. Are disputes relating to wealth tax, security transaction tax,
commodity transaction tax and equalisation levy covered?
No. Only disputes relating to income-tax are covered.
19. The assessment order under section 143(3) of the Act was passed in
the case of an assessee for the assessment year 2015-16. The said
assessment order is pending with ITAT. Subsequently another order
under section 147/143(3) waspassedfor the same assessmentyear and
that is pending with CIT (Appeals)? Could both or one of the orders
be settled under Vivad se Vishwas?
The appellant in this case has an option to settle either of the two
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appeals or both appeals for the same assessment year. If he decides to
settle both appeals then he has to file only one declaration form, The
disputed tax in this case would be the aggregate amount of disputed tax
in both appeals.
20. In a case there is no disputed tax. However, there is appeal for
disputed penalty which has been disposed off by CIT (Appeals) on 5’h
January 2020. Time to file appeal in ITAT ugainst the order of
Commissioner(Appeals) is still available but the appeal has not yet
been filed. Will such case be eligible to avail the benefit?
Yes, the appellant in this case would also be eligible to avail the benefit
of Vivad se Vishwas. In this case, the terms of availing Vivad se
Vishwas in case of disputed penalty/interest/fee are similar to terms in
case of disputed tax. Thus, if the time to file appeal has not expired as
on specified date, the appellant is eligible to avail benefit of Vivad se
Vishwas. In this case the appellant should indicate in the declaration
fonn that time limit to file appeal in ITAT has not expired.
21. In a case ITAT has quashed the assessment order based on lack of
jurisdiction by the AO. The department has filed an appeal in HC
which is pending. Is the assessee eligible to settle this dispute under
Vivad se Vishwas and ifyes how disputed tax be calculated as there is
no assessment order?
The assessee in this case is eligible to settle the department appeal in
HC. The amount payable shall be calculated at half rate of 100%,110%,
125% or 135%, as the case may be, on the disputed tax that would be
restored if the department was to win the appeal in HC.
22. In the case of an assessee prosecution has been instituted and is
pending in court. Is assessee eligiblefor the Vivad se Vishwas?
No. However, where only notice for initiation of prosecution has been
issued with reference to tax arrears, the taxpayer has a choice to
compound the offence and opt for Vivad se Vishwas.
23. If the due date offiling appeal is after 31.1.2020 the appeal has not
beenfiled, will such case be eligiblefor Vivad se Vishwas?
Yes
24. If appeal is .filed before High Court and is pending for admission as
on 31.1.2020, whether the case is eligiblefor Vivad se Vishwas?
Yes
“QUESTIONS RELATED TO CALCULATION (Q. No. 25-40)”
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25. In a case appeal or arbitration is pending on the specified date, but a
rectification is also pending with the A0 which if accepted will reduce
the total assessed income. Will the calculation of disputed tax be
calculated on rectified total assessed income?
The rectification order passed by the AO may have an impact on
determination of disputed tax, if there is reduction or increase in the
income and tax liability of the assessee as a result of rectification. The
disputed tax in such cases would be calculated after giving effect to the
rectification order passed, if any.
26. Refer to question number 5. How will disputed tax be calculated in a
case where disputed demand including interest has been paid by the
assessee while being in appeal?
Please refer to answer to question no. 5. To illustrate, consider a nonsearch
case where an assessee is III appeal before
CommissionertAppeals). The tax on returned income (including
surcharge and cess) comes to Rs. 30,000 and interest under section
234B of Rs.l,OOO. Assessee has paid this amount of Rs. 31,000 at the
time of filing his tax return. During assessment an addition is made and
additional demand of Rs. 16,000 has been raised, which comprises of
disputed tax (including surcharge and cess) of’Rs. 10,000 and interest on
such disputed tax of Rs.6000. Penalty has been initiated separately.
Assessee has paid the demand of Rs. 14,000 during pendency of appeal;
however interest under section 220 of the Act is yet to be calculated.
Assessee files a declaration, which is accepted and certificate is issued
by the desiguated authority (DA). The disputed tax of Rs 10,000 (at
100%) is to be paid on or before 31″ March 2020. Since he has already
paid Rs. 14,000, he would be entitled to refund of Rs. 4,000 (without
section 244A interest). Further, the interest leviable under section 220
and penalty leviable shall also be waived.
27. Refer to question no 7. How will disputed tax be computed in a case
where assessment has been set aside for giving proper opportunity to
an assessee on the additions carried out by the AO?
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Please refer to answer to question no. 7. To illustrate, return of income
was filed by the assessee, The tax on returned income was Rs 10,000
and interest was Rs 1,000. The amount of Rs 11,000 was paid before
filing the return. The AO made two additions of Rs 20,000/- and Rs
30,000/-. The tax (including surcharge and cess) on this comes to Rs
6,240/- and Rs 9,360/- and interest comes toRs.2,500 and Rs.3,500
respectively. Commissioner(Appeals) has confirmed the two additions.
ITAT confirmed the first addition (Rs 20,000/-) and set aside the second
addition (Rs 30,000/-) to the file of AO for verification with a specific
direction. Assessee appeals against the order of ITAT with respect to
first addition (or has not filed appeal as time limit to file appeal against
the order has not expired). The assessee can avail the Vivad se Vlshwas
if declaration covers both the additions. In this case the disputed tax
would be the sum of disputed tax on both the additions i.e. Rs. 6240/plus
Rs. 9,360/-.
In such cases while filling the declaration form, appellant can indicate
that with respect to the set-aside issues the appeal is pending with the
Commissioner(Appeals).
28. What amount of tax is required to be paid, if an assessee wants to
avail the benefit ofthe Vivad se Vishwas?
Under the Vivad se Vlshwas, declarant is required to make following
payment for settling disputes:
A. In appeals / writ / SLP / DRP objections / revision application under
section 264 / arbitration filed by the assessee –
(a) In case payment is made till 31″ March, 2020-
(i) 100% of the disputed tax (125% in search cases) where
dispute relates to disputed tax (excess amount over 100%
limited to the amount of interest and penalty levied or
leviable), or
(ii) 25% of the disputed penalty, interest or fee where dispute
relates to disputed penalty, interest or fee only.
(b) In case payment is made after 31st March, 2020 –
(i) 110% of the disputed tax (135% in search cases) where
dispute relates to disputed tax (excess amount over 100%
limited to the amount of interest and penalty), or
(ii) 30% of the disputed penalty, interest or fee in case of
dispute related to disputed penalty, interest or fee only.
However, if in an appeal before Commissioner(Appeals) or in
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objections pending before DRP, there is an issue on which the appellant
has got favourable decision from ITAT (not reversed by HC or SC) or
from the High Court (not reversed by SC) in earlier years then the
amount payable shall be half or 50% of above amount
Similarly, if in an appeal before ITAT, there is an issue on which the
appellant has got favourable decision from the High Court (not reversed
by SC) in earlier years then the amount payable shall be half or 50% of
above amount
B. In appeals Iwrit 1SLP filed by the Department –
(a) In case payment is made till 31″March, 2020-
(i) 50% of the disputed tax (62.5% in search cases) in case of
dispute related to disputed tax or
(ii) 12.5% of the disputed penalty, interest or fee in case of
dispute related to disputed penalty, interest or fee only.
(b) In case payment is made after 31″‘ March, 2020 –
(i) 55% of the disputed tax (67.5% in search cases) in cases of
dispute related to disputed tax, or
(ii) 15% of the disputed penalty, interest or fee in case of
dispute related to disputed penalty, interest or fee only.
29. Whether credit for earlier taxes paid against disputed tax will be
available against the payment to be made under Vivad se Vishwas?
The amount payable by the declarant under Vivad se Vishwas shall be
determined by the DA under clause 5. Credit for taxes paid against the
disputed tax before filing declaration shall be available to the declarant
Please refer to example at question no. 26 above. If in that example
against disputed tax ofRs. 10,000 an amount ofRs. 8,000/- has already
been paid, the appellant would be required to pay only the remaining
Rs. 2,000/- by 31″‘ March 2020.
30. Where assessee settles TDS appeal or withdraws arbitration (against
order U/S 201) as deductor of TDS, will credit ofsuch tax be allowed to
deductee?
In such cases, the deductee shall be allowed to claim credit of taxes in
respect of which the deductor has availed of dispute resolution under
Vivad se Vishwas. However, the credit will be allowed as on the date of
settlement of dispute by the deductor and hence the interest as
applicable to deductee shall apply.
31. Where assessee settles TDS liability as deductor of TDS under Vivad
se Vishwas (i.e against order u/s 201), when will he get consequential
reliefofexpenditure allowance under proviso to section 40(a)(i)/(ia)?
Answer:
Qnestion No.
In such cases, the deductor shall be entitled to get consequential relief of
allowable expenditure under proviso to section 40(a)(i)/(ia) in the year
in which the tax was required to be deducted.
To illustrate, let us assume that there are two appeals pending; one
against the order under section 201 of the Act for non-deduction ofTDS
and another one against the order under section 143(3) of the Act for
disallowance under section 40(a)(i)/(ia) of the Act. The disallowance
under section 40 is with respect to same issue on which order under
section 20I has been issued. If the dispute is settled with respect to
order under section 20I, assessee will not be required to pay any tax on
the issue relating to disallowance under section 40(a)(i)/(ia) of the Act,
in accordance with the provision of section 40(a)(i)/(ia) of the Act.
In case, in the order under section 143(3) there are other issues as well,
and the appellant wants to settle the dispute with respect to order under
section 143(3) as well, then the disallowance under section 40(a)(i)/(ia)
of the Act relating to the issue on which he has already settled liability
under section 20 I would be ignored for calculating disputed tax.
If the assessee has challenged the order under section 20 I on merits and
has won in the Supreme Court or the order of any appellate authority
below Supreme Court on this issue in favour of the assessee has not
been challenged by the Department on merit (not because appeal was
not filed on account of monetary limit for filing of appeal as per
applicable CEDT circular), then in a case where disallowance under
section 40(a)(i)/(ia) of tbe Act is in consequence of such order under
section 20I and is part of disputed income as per order under section
143(3) in his case, such disallowance would be ignored for calculating
disputed tax, in accordance with the proviso to section 40(a)(i)/(ia) of
the Act.
It is clarified that if the assessee has made payment against the addition
representing section 40(a)(i)/(ia) disallowance, the assessee shall not be
entitled to interest under section 244A of the Act on amount refundable,
if any, under Vivad se Vishwas.
It is further clarified that if the assessee wish to settle disallowance
under section 40(a)(i)/(ia) in a search case on the basis of settlement of
the dispute under section 201, he shall be required to pay higher amount
as applicable for search cases for settling dispute in respect of that TDS
default under section 201.
32. When assessee settles his own appeal or arbitration under Vivad se
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Vishwas, will consequential relief be available to the deductor in
default from liability determined under TDS order U/S 201?
When an assessee (being a person receiving an income) settles his own
appeal or arbitration under Vivad se Vishwas and such appeal or
arbitration is with reference to assessment of an income which was not
subjected to TDS by the payer of such income (deductor in default) and
an order under section 201 of the Act has been passed against such
deductor in default, then such deductor in default would not be required
to pay the corresponding TDS amount. However, he would be required
to pay the interest under sub-section (IA) of section 201 of the Act. If
such levy of interest under sub-section (IA) of section 201 qualifies for
Vivad se Vishwas, the deductor in default can settle this dispute at 25%
or 30% of the disputed interest, as the case may be, by filing up the
relevant schedule of disputed interest.
33. Where DRP order passed on or after 1st July, 2012 and before 1st
June, 2016 have given relief to assessee and Department has filed
appeal, how assessed tax to be calculated?
If department appeal is required to be settled, then against that appeal
the appellant is required to pay only 50% of the amount that is otherwise
payable if it was his appeal.
34. Appeals against assessment order and against penalty order are filed
separately on same issue. Hence there are separate appeals for both.
In such a case how disputed tax to be calculated?
Please see question no. 8. Further, it is clarified that if the appellant has
both appeal against assessment order and appeal against penalty relating
to same assessment pending for the same assessment year, and he
wishes to settle tbe appeal against assessment order (with penalty appeal
automatically covered), he is required to give details of both appeals in
one declaration form for that year. However, in the annexure he is
required to fill only the schedule relating to disputed tax.
35. If there is substantive addition as well as protective addition in the
case of same assessee for different assessment year, how will that be
covered? Similarly if there is substantive addition in case of one
assessee and protective addition on same issue in the case of another
assessee, how will that be covered under Vivad se Vishwas?
If the substantive addition is eligible to be covered under Vivad se
Vlshwas, then on settlement of dispute related to substantive addition
AO shall pass rectification order deleting the protective addition relating
to the same issue in the case of the assessee or in the case of another
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assessee.
36. In a case ITAT has passed order giving relief on two issues and
confirming three issues. Time to file appeal has not expired as on
specified date. The taxpayer wishes to file declaration for the three
issues which have gone against him. What about the other two issues
as the taxpayer is not sure ifthe department will file appeal or not?
The Vlvad se Vishwas allow declaration to be filed even when time to
file appeal has not expired considering them to be a deemed appeal.
Vivad se Vishwas also envisages option to assessee to file declaration
for only his appeal or declaration for department appeal or declaration
for both. Thus, in a given situation the appellant has a choice, he can
only settle his deemed appeal on three issues, or he can settle
department deemed appeal on two issues or he can settle both. If he
decides to settle only his deemed appeal, then department would be free
to file appeal on the two issues (where the assessee has got relief) as per
the extant procedure laid down and directions issued by the CBDT.
37. There is no provision for 50% concession in appeal pending in HC on
an issue where the assessee has got reliefon that issue from the SC?
If the appellant has got decision in his favour from SC on an issue, there
is no dispute now with regard to that issue and he need not settle that
issue. If that issue is part of the multiple issues, the disputed tax may be
calculated on other issues considering nil tax on this issue.
38. Addition was made uls 143(3) on two issues whereas appealfiled only
for one addition. Whether interest and penalty be waived for both
additions.
Under Vivad se Vishwas, interest and penalty will be waived only in
respect of the issue which is disputed in appeal and for which
declaration is filed. Hence, for the undisputed issue, the tax, interest and
penalty shall be payable.
39. DRP has issued directions confirming all the proposed additions in
the draft order and the A0 has passed the order accordingly. The
issues confirmed by DRP include an issue on which the taxpayer has
got favourable order from ITAT (not reversed by HC or SC) in an
earlier year. The time limit tofile appeal in ITAT is still available. The
taxpayer is eligible for Vivad se Vishwas treating the situation as
taxpayer’s deemed appeal in ITAT. In this case how will disputed tax
be calculated? Will it be 100% on the issue allowed by ITAT in earlier
years or 50%?
Answer:
In this case, on the issue where the taxpayer has got relief from ITAT in
an earlier year (not reversed by He or SC) the disputed tax shall be
computed at half of normal rate of 100%, 110%, 125% or 135%, as the
case maybe.
Question No.
Answer:
40. Where there are two appealsflIed for an assessment year- one by the
appellant and one by the tax department, whether the appellant can
opt for only one appeal? If yes, how would the disputed tax be
computed?
The appellant has an option to opt to settle appeal filed by it or appeal
filed by the department or both. Declaration form is to be filed
assessment year wise i.e. only one declaration for one assessment year.
For different assessment years separate declarations have to be filed. So
the appellant needs to specify in the declaration form whether he wants
to settle his appeal, or department’s appeal in his case or both for a
particular assessment year. The computation of tax payable would be
carried out accordingly.
“QUESTIONS RELATED TO PROCEDURE (Q. No. 41-50)”
Question No.
Answer:
Question No.
Answer:
Question No.
41.
42.
43.
How much time shall be availablefor paying the taxes after filing a
declaration under the Vivad se Vishwas?
As per clause 5 of Vivad se Vishwas, the DA shall determine the
amount payable by the declarant within fifteen days from the date of
receipt of the declaration and grant a certificate to the declarant
containing particulars of tbe tax-arrear and the amount payable after
such determination. The declarant shall pay the amount so determined
within fifteen days of the date of receipt of the certificate and intimate
the details of such payment to the DA in the prescribed form.
Thereafter, the DA shall pass an order stating that the declarant has
paid the amount. It may be clarified that 15 days is outer limit. The
DAs shall be instructed to grant a certificate at an early date enabling
the appellant to pay the amount on or before 31st March, 2020 so that
he can take benefit of reduced payment to settle the dispute.
If taxes are paid after availing the benefits of the Vivad se Vishwas
and later the taxpayer decides to take refund of these taxes paid,
would it be possible?
No. Any amount paid in pursuance of a declaration made under the
Vivadse Vishwas shall not be refundable under any circumstances.
Where appeals are withdrawn from the appellate forum, and the
Answer:
Question No.
Answer:
Question No.
Answer:
Question No.
Auswer:
44.
45.
46.
declarant is declared to be ineligible under the Vlvad se Vishwas by
DA at the stage of determination of amount payable under section
5(1) or, amount determined by DA is at variance ofamount declared
by declarant and declarant is not agreeable to DA’s determination of
amount payable, then whether the appeals are automatically
reinstated or a separate application needs to be filed for reinstating
the appeal before the appellate authorities
Under the amended procedure no appeal is required to be withdrawn
before the grant of certificate by DA. After the grant of certificate by
DA under clause 5, the appellant is required to withdraw appeal or
writ or special leave petition pending before the appellant forum and
submit proof of withdrawal with intimation of payment to the DA as
per the same clause. Where assessee has made request for withdrawal
and such request is under process, proof of request made shall be
enclosed.
Similarly in case of arbitration, conciliation or mediation, proof of
withdrawal of arbitration/conciliation/mediation is to be enclosed
along with intimation ofpayment to the DA.
Clause 5(2) requires declarant to pay amount determined by DA
within 15 days of receipt of certificate from DA. Clarification is
required on whether declarant is to also intimate DA about fact of
having made payment pursuant to declaration within the period of
15 days?
As per clause 5(2), the declarant shall pay the amount determined
under clause 5(1) within fifteen days of the date of receipt of the
certificate and intimate the details of such payment to the DA in the
prescribed form and thereupon the DA shall pass an order stating that
the declarant has paid the amount.
Will DA also pass order granting expressly, immunity from levy of
interest and penalty by the A() as well as immunity from
prosecution?
As per clause 6, subject to the provisions of clause 5, the DA shall not
institute any proceeding in respect of an offence; or impose or levy
any penalty; or charge any interest under the Income-tax Act in
respect of tax arrears. This shall be reiterated in the order under
section 5(2) passed by DA.
Whether DA can amend his order to rectify any patent errors?
Yes, the DA shall be able to amend his order under clause 5 to rectify
Question No.
Auswer:
Questiou No
Answer:
Question no
Answer:
Question no
Answer:
47.
48.
49.
50.
any apparent errors.
Where tax determined by DA is not acceptable can appeal be filed
against the order of designated authority before [TAT, Iligh Court
or Supreme Court?
No. As per clause 4(7), no appellate forum or arbitrator, conciliator or
mediator shall proceed to decide any issue relating to the tax arrears
mentioned in the declaration in respect of which order is passed by the
DA or the payment of sum determined by the DA.
There is no provision for withdrawal of appeal/writ/Sl.P by the
department on settlement ofdispute
On intimation of payment to the DA by the appellant pertaining to
department appeal/writ/SLP, the department shall withdraw such
appeal/writ/SLP.
Once declaration is filed under Vivad se Vishwas, and for financial
difficulties, payment is not made accordingly, will the declaration be
null and void?
Yes it would be void.
Where the demand in case ofan assessee has been reduced partly or
fully by giving appeal effect to the order of appellate forum, how
would the umount payable under Vivad se Vishwas be adjusted?
In such cases, after getting the proof of payment of the amonnt
payable under Vivad se Vishwas, the AO shall pass order under the
relevant provisions of Vivad se Vishwas to create demand in case of
assessee against which the amount payable shall be adjusted.
}
“QUESTIONS RELATED TO CONSEQUENCES (Q. No. 51-55)”
Questiou No.
Answer:
Question No.
51.
52.
Will there be immunity from prosecution?
Yes, clanse 6 provides for immunity from prosecution to a declarant in
relation to a tax arrears for which declaration is filed under Vivad se
Vishwas and in whose case an order is passed by the DA that the
amount payable under Vivad se Vishwas has been paid by the
declarant.
Will the result of this Vivad se Vishwas be applied to same issues
Answer:
Question No.
Answer:
Question No.
Answer:
Question No.
Auswer
53.
54.
55.
pending before AO?
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 malcing 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.
If loss is not allowed to be adjusted while calculating disputed tax,
will that loss be allowed to be carriedforward?
As per the amendment proposed in Vivad se Vishwas, in a case where
the dispute in relation to an assessment year relates to reduction of
Minimum Alternate Tax (MAT) credit or reduction of loss or
depreciation, the appellant shall have an option either to (i) include the
amount of tax related to such MAT credit or loss or depreciation in the
amount of disputed tax and carry forward the MAT credit or loss or
deprecation or (ii) to carry forward the reduced tax credit or loss or
depreciation. CBDT will prescribe the manner of calculation in such
cases.
If the taxpayer avails Vivad se Vishwas for Transfer Pricing
adjustment, will provisions of section 92CE of the Act apply
separately?
Yes, secondary adjustment under section nCE will be applicable.
However, it may be noted that the provision of secondary adjustment
as contained in section 92CE of the Act is not applicable for primary
adjustment made in respect of an assessment year commencing on or
before the I” day of April 2016. That means, if there is any primary
adjustment for assessment year 2016-17 or earlier assessment year, it
is not subjected to secondary adjustment under section nCE of the
Act.
The appellant has settled the dispute under Vivad se Vishwas in an
assessment year. Whether it is open for Revenue to take a stand that
the additions have been accepted by the appellant and hence he
cannot dispute it in future assessment years?
Please refer answer to question no 52. It has been clarified in
Explanation to clause 5 that making a declaration under Vivad se
Vishwas shall not amount to conceding the tax position and it shall not
~
(Ankur Goyal)
Under Secretary to the Govt. of India
be lawful for tbe income-tax authority or the declarant being a part in
appeal or writ or in SLP to contend that the declarant or the incometax
authority, as the case may be, has acquiesced in the decision on the
disputed issue by settling the dispute.
Copy to:
1. PS to FM/ OSD to FM/ PS to MoS(F)/ OSD to MoS(F)
2. PPS to Secretary (Revenue)
3. Chairman, CEnT & All Members, CBDT
4. All PI”. DGsIT! PI’. CsIT
5. All Joint Secretaries! CsITI Directors/ Deputy Secretaries! Under Secretaries ofCBDT
6. The C&AG of India
7. The JS & Legal Adviser, Ministry of Law & Justice, New Delhi
8. CIT (M&TP), Official SpokespersonofCBDT
9, 0/0 PI’.DOlT (Systems) for uploading on offlcial website
10. JCIT (Database Cell) for uploading on wwwirSQfficersonlinc.gov-in
011.0 .’).0-.0.
(Ankur Goyal)
Under Secretary to the Govt. of India