1. What is the objective of the Vivad se Vishwas scheme?
Ans: To provide for a one-time settlement scheme for resolution of disputed tax and for matters connected therewith or incidental thereto.
2. Who can avail the Vivad se Vishwas scheme?
Ans: An Assessee whose appeal, whether filed by the Assessee or the Dept or both, is pending before the “Appellate Forum” i.e. CIT(A), ITAT, HC or SC, as on the “Specified Date” i.e. 31.01.2020, irrespective of whether the demand in such cases is pending or has been paid.
3. What tax arrears does the Vivad se Vishwas scheme cover?
a. Disputed Tax i.e.
i. [A-B] + [C-D]
A=Tax on assessed income per general provisions
B=Tax on undisputed income as per general provisions
C=Tax on assessed income per MAT/AMT
D=Tax on undisputed income as per MAT/AMT
ii. Tax determined u/s 200A, 201, 206C(6A) or 206CB of the IT Act, 1961 in respect of which an appeal has been filed.
b. Disputed Interest i.e. Interest not charged or chargeable on the disputed tax.
c. Disputed Penalty i.e. Penalty not levied or leviable on the disputed income or disputed tax.
d. Disputed fee as determined under the provisions of the Income Tax Act, 1961 (“IT Act”)
4. What is the amount payable by the declarant under this scheme?
|Amount payable on or before|
|Sl. No.||Type of Arrears||31.03.2020||Last Date*|
|1||Aggregate of Disputed Tax, Interest & Penalty||Disputed Tax||Disputed Tax + 10%|
|2||Disputed Interest or Penalty or Fee||25% of such sum||30% of such sum|
*as notified by the Central Govt in the Official Gazette.
5. What is the procedure to avail this scheme?
Ans: a. A “Declaration”, subject to conditions stipulated in Sec 6, in a prescribed form is to be filed before the “Designated Authority” who will be an officer not below the rank of CIT as notified by PrCCIT.
b. Any appeal pending before the CIT(A) or ITAT shall be deemed to have been withdrawn from the date on which the Certificate is issued by the “Designated Authority”.
c. Any writ or appeal filed by the declarant before HC or SC, or any arbitration/conciliation/ mediation initiated by the declarant in India or any other country/territory, shall be withdrawn by the declarant and such furnish proof of such withdrawal while filing the declaration.
d. The declarant shall furnish an undertaking waiving his right, both direct and indirect, to pursue any remedy or claim in relation to tax arrears under any law or agreement entered into by India with any other country/territory.
e. The “Designated Authority” shall determine the amount payable and grant a Certificate within 15 days from the date of receipt of the declaration.
f. No Appellate Forum or Arbitrator/Conciliator/Mediator shall proceed to decide any issue mention in the declaration when an order has been made by the “Designated Authority” determining the amount payable under this scheme.
g. The declarant shall pay the amount determined within 15 days from the date of receipt of such Certificate and intimate such payment made to the “Designated Authority”, upon which an order shall be passed stating that the declarant has paid the amount.
h. The “Designated Authority” shall not institute any proceeding in respect of an offence, or impose any penalty or charge any interest under the IT Act in respect of the tax arrears.
i. Amount paid under this scheme is non-refundable.
j. No matter covered under such order shall be reopened in any other proceeding under IT Act or any other law.
k. The scheme shall not apply to :
a. Assessments made u/s 153A or 153C of the IT Act.
b. The assessment year where prosecution is initiated on or before date of filing the declaration.
c. Undisclosed income/asset located outside India.
d. Re/assessment made pursuant to information received u/s 90 or 90A of the IT Act.
e. Appeals before CIT(A) wherein enhancement notice u/s 251 of the IT Act has been issued on or before 31.01.2020.
f. Any person who has been detained under CFEPSA Act on or before filing the declaration.
g. Any person in respect of whom prosecution under IPC, UAPA, NDPSA, PCA, PMLA, PBPTA or enforcement of any civil liability is instituted on or before filing the declaration or such person has been convicted of under any of those Acts.
h. Any person who has been notified u/s 3 of SCTORTSA on or before filing the declaration.
6. Scenarios with ambiguity in respect of eligibility under Direct Tax Vivad Se Vishwas Bill, 2020.
1. Scenario 1 :
The appeal is in respect of multiple additions/disallowances and the assessee wishes to settle for some of the additions/disallowances under the scheme but wishes to litigate on rest of the additions/disallowances.
2. Scenario 2 :
The order/appellate order is passed before 31.01.2020 and the due date for filing the appeal before the appellate forum is beyond 31.01.2020 and hence, the appellant has not filed an appeal as on 31.01.2020.
3. Scenario 3 :
The appeal is pending before the appellate forum as on 31.01.2020, however the appellate forum has adjudicated on the appeal and passed an order on or before filing a declaration/issuance of certificate by the designated authority.
4. Scenario 4 :
The assessee’s case is a subject matter of rectification or review proceedings before the Assessing Officer, Principal/Commissioner of Income, Tribunal or Supreme Court as on 31.01.2020.
1. CIT(A) – Commissioner of Income Tax (Appeals)
2. ITAT – Income Tax Appellate Tribunal
3. HC – High Court
4. SC – Supreme Court
5. CIT – Commissioner of Income Tax
6. PrCCIT – Principal Chief Commissioner of Income Tax
7. CFEPSA – Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974
8. IPC – Indian Penal Code, 1860
9. UAPA – Unlawful Activities (Prevention) Act, 1967
10. NDPSA – Narcotic Drugs and Psychotropic Substances Act, 1985
11. PCA – Prevention of Corruption Act, 1988
12. PMLA – Prevention of Money Laundering Act, 2002
13. PBPTA – Prevention of Benami Property Transactions Act, 1988
14. SCTORTSA – Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992
Hemant Pai, CA
Bengaluru, +91 98444 86777, [email protected]