How much Vivad would be closed and how much Vishwas the Vivad se Vishwas scheme will be able to achieve that in coming months would be in front of all of us,but this scheme has proved the true integrity that we professionals have. It is the professionals who foregoing their professional opportunities and are educating and convincing their clients to go for the scheme. Ironically, it is the professionals who are also representing through various forums to competent authorities so that more people can come within the ambit and use the scheme foregoing their professional interest.
For more success of Vivad Se Vishwas Scheme here are some points for consideration which if incorporated/ relaxation given might bring more success to the scheme.
1) Extension of Date: Since till 15th of March, 2020, the complete scheme along with rules/forms etc has not been enacted for whatsoever reasons, the time available for payment up to 31st March, 2020, certainly needs to be extended. The entire world is fighting with an invisible enemy- Corona Virus. People are preferring to stay at homes and even various judiciary forums have also restricted their working environment, which is the need of the hour. Professionals/assesses/department officials would find it difficult to meet the cut off date of 31st March,2020. Even in getting orders from High Court/Supreme Court of withdrawal of appeals would be difficult.
As 15 days time is the time period provided in the scheme for tax payers to pay the disputed tax. A relaxation is required that those who file the application before 31st March,2020 even if they make the payment post 31st March,2020 within 15 days of the communication of the amount to be paid by them, they should not be penalized with extra 10%/5% payment. Keeping the economic scenario in mind and just now assessee’s have also paid advance tax and many assessee’s are facing liquidity crunch so it is difficult for them to meet the deadline of 31st Mach owing to procedure difficulties as well as economic/health scenario prevalent in our country right now.
2) Payment in Installments and payment even beyond 15 days with some Interest should be allowed: Looking to the liquidity crunch that assessee’s are facing, payment in installments should be allowed. In case there is shortfall in payment done till 31st March,2020 provided there is no relaxation given , than only on shortfall amount extra 10%/5% should be charged.
In case the payment is not made within the stipulated 15 days time to the department than beyond that also payment should be allowed and interest @ 1% per month can be charged for default in payment within 15 days period.
3. Reducing rate of Taxation for sec 115BBE only for the purpose of scheme:- For resolution of any dispute relating to assessment year 2017-18 and onwards, where the provisions of section 115BBE of the Income Tax Act, 1961 has been invoked to charge tax plus surcharge etc. aggregating to almost 78%, compared to similar dispute for any assessment year up to 2016-17 being taxed at 30% plus surcharge etc; the amount payable under the scheme should be made more tax payers friendly, keeping in view the 2020-21 Budget Speech of Hon’ble Finance Minister, given on 1st February, 2020, before LOK SABHA announcing that a Scheme by the name “Vivad se Vishwash” is being introduced to resolve post demonetization dispute(s), hence, rationalization of tax rate is necessary. Though the FM had clarified in Rajya Sabha on 13th March,2020 that it is not an amnesty scheme and the rate in force would be applicable on demonetization cases. These are the biggest cases apart from penny stock/accommodation enteries who want to avail the scheme but due to high rate of taxation and to make available money for payment in the scheme,they are not able to opt for it.Just for the purpose of scheme if some concession in the rate is given, it might be a win-win situation for all.If some relaxation is not given in the scheme for these cases than litigation owing to these cases will increase in days to come and due to the amount involved in these cases, the litigation is bound to travel to high courts and even beyond them. Just for the limited purpose of this scheme and to mitigate litigation in true sense, certain relaxation is the need of the hour.
4) Partial Settlement of Dispute: So far the scheme and clarification thereon provide for resolution of entire addition/disallowances in one go. However, in large number of cases, some disputes may have been won by the tax payer(s) in earlier year(s) (covered issues), though they need to just pay 50% or there might be issues where assesse has got a lot of chances of winning at appellate forums so due to those issues the assesse might not be opting for the scheme hence scheme may be modified to provide for partial settlement of disputed issues as well as it has been provided in the FAQ’S that the assesse can prefer in settling all or just one appeal pertaining to assessment year wherein assesse and department both are in appeal.
5) Two Assessments: In a case where the addition(s) for Penny Stock/LTCG/Share Capital etc. were made in assessment(s) completed under section 143(3)/148 of the Income Tax Act, 1961, for any assessment year up to 2016-17 and thereafter, consequent to a search assessment for the same year had been done under section 153A/153C of the Income Tax Act, 1961, and both are pending in appeal since 31.01.2020 or earlier. In such a situation the most appropriate resolution would be to treat that the first assessment order had merged into the second assessment order therefore, if the tax payer offers to pay the tax as per 2nd/subsequent search assessment order then both the pending appeals and assessments should be provided quietus in all respects. (No further litigation – Peremptory resolution of both the disputes).
6) Correction in the Disputed Demand to be paid :- As per the scheme the amount intimated by designated authority cannot be challenged in any forum but just for the smooth functioning in rules/forms/procedures that would be notified if any mechanism is provided wherein if certain wrong calculations/non giving of credit of prior deposits,adjustments etc is not done properly than a mechanism should be made that before the final amount is communicated to the assesse, the calculation is send to assesse and assesse been given a time to comment upon the calculation before it becomes the final calculation.
7) Posting on ITBA Portal: The tax payers are afraid whether the revised demand after payment of disputed amount and waiver off interest and penalty shall be simultaneously or within 15 days updated on ITBA Portal or not ? If ITBA Portal is not updated on a real time basis or within a reasonable time then, ITBA Portal will not revise the demand compared to the existing/original demand and the same shall adversely effect the tax payer at all times.
8) Credit for disputed amount settled under the scheme in the books of account:
The amount under dispute and resolved under Scheme should be allowed to be introduced as Capital/Tax paid money in the books of account of the Tax Payer. So that it can be one of the major advantage that could push many people to opt for the scheme.