CLARIFICATION REQUIRED AFTER Circular NO. 7 DT 4-3-2020 on VIVAAD SE VISHWAS SCHEME, 2020
1. As per the scheme appellant will file a declaration before “DA” on prescribed form and “DA” will take 15 days to file issue certificate under 5(1) and then within 15 days the tax is to be deposited. This will defeat the purpose of scheme to collect tax before 31-3-2020, taxpayers should be granted a permission to deposit tax on the basis of their declaration upfront if he wants to avail concessional tax upto 31-3-2020 and difference if any finally determined by DA can be charged at higher rate if deposited post 31-3-2020. In this scenario if for any reasons the application of appellant is rejected the refund to tax paid should be allowed.
2. Appellant is required to deposit 100% of disputed tax if tax paid subsequent to certificate u/s 5(1) by DA and 110% of disputed tax if paid after 31-3-2020. Take a case where Rs. 1,00,000/- is disputed tax and Appellant has already paid Rs. 99,000/- before application through tax on regular assessment and only Rs.1,000/- remain payable. In such scenario if Appellant makes an application on 20-3-2020 and also ready to pay Rs. 1,000/- then as per scheme DA will issue certificate within 15 days – say e.g. on 4-4-2020 then he will end up paying extra 10% disputed tax which comes to Rs. 10,000/- which is highly unreasonable. 10% extra should be charged on tax balance to paid in cash and not on entire disputed tax.
3. As per the scheme, “Appellant will file a declaration and on issue of certificate by DA his appeal before CITA and ITAT shall be deemed to be withdrawn. The position is different for HC/SC where he will have to file an application for withdrawal to court. In case of some unforeseen circumstances appellant is not in a position to deposit tax, he will be a big looser because he looses all his rights in the case which is unfair. The clause for deemed withdrawal of appeal should be taken back and should be in line with HC/SC cases.
4. As per the scheme Disputed tax calculated by DA is final, there must be some option to reconcile the calculation otherwise there will be major controversies in such calculations. Tax payers should have platform to represent about tax calculation.
5. The issues involved in the litigation may have spiral impact on the years which are either pending under scrutiny or not selected under scrutiny. Assessee want to settle such issues, he should be allowed under the scheme to settle such issues otherwise he is reluctant in settling for completed years also.
6. Appeals filed before 31-1-2020 but are delayed whether covered under the scheme, it should be allowed.
7. A large number of demands outstanding on ex-parte basis u/s 144 where no notice / assessment orders are served on assessee and as such no appeal is filed by Assessee. Such assessee should be allowed to be covered under the scheme, with a rider that such declaration can not result in refund under the scheme otherwise same can be misused by the taxpayers for already settled litigation.
8. Cases involving addition u/s 68-69 read with section 115BBE where tax rates were raised on 15-12-2016 retrospectively from 1-4-2016. It is high time to think for maximum marginal rate tax on such additions which will consistent with the assurance given by Government that retrospective tax will be charged and this will also encourage many taxpayers to avail scheme.
9. There are cases where taxes have been paid in original return but before appellant forum assessee has taken a ground for allowance of such claim since tax has been paid wrongly in the return of Income. Whether tax on such Income will be part of disputed tax?
Author Bio
On assessment completed u/s 143(3) on 22/12/2019 income determined Rs- 2284060/- (returned Income Rs- 139060/- and Addition u/s 69 of Rs- 2145000/-) Tax charged u/s 115 BBE @ 60% of Rs- 1287000/-, Surcharge of 25% of Rs- 321750/- and Education Cess of Rs- 48263/- Total Tax liability of Rs- 1657013/-
Tax chargeable in normal course on income of Rs 2284060/- Rs- 517285/- Interest u/s 234 A B C of Rs- 346779/- Total liability of Rs 864064/-
If assesse intends to avail of the vivad se vishwas scheme 2020 as entire demand raised is disputed in appeal and no payment is made till this date
What would be the Tax required to be Paid?