Vivaad se Vishwas Scheme, 2020 

Litigation in the country has always been an area of concern. In past there has been tremendous increase in the number of the appeals pending before various appellate forums like Income-tax Appellate Tribunal, High Courts and Supreme Court. Litigation takes undue time, resources and efforts of parties and in many cases the decisions are rendered after decades. Over the years, Government is taking various efforts to reduce the litigation, thereby saving such resources which can be utilised in more productive areas. The Government have taken several measures like increasing monetary limits for filing appeals in appellate forums, issuing circulars accepting the decision given by Honourable Supreme Court, etc.

The Honourable Finance Minister, Mrs Nirmal Sitharaman in the Finance Budget, 2020 made another move to reduce the litigation and announced the Vivaad se Vishwas Scheme, 2020. Thereafter, on 5th February, 2020 Vivaad se Vishwas Bill, 2020 was presented in the Lok Sabha.

The salient features of the aforesaid Bill (as introduced in the Lok Sabha) are as under –

A. Object

To provide for resolution of disputed tax and for matters connected therewith or incidental thereto

B. Key Terms

a. Who can opt for this scheme?

Ans: Any person who has filed an appeal before the Commissioner of Income-Tax (Appeals), Income-tax Appellate Tribunal, High Court and Supreme Court and the said appeal as on the date of making the declaration is pending before such relevant forum.

b. To whom declaration is to be filed?

Ans: The declaration is to be filed with the Commissioner of Income-Tax notified by the Principal Commissioner of Income-Tax.

c. Nature of amounts for which declaration can be filed?

Ans: The declaration can be filed in respect of either disputed tax, interest, penalty, fees or aggregate of such amounts for which appeal is filed, including appeals filed relating to tax deducted at source or tax collected at source.

d. What is meant by the term disputed tax?

Ans: The disputed tax in respect of which an appeal is filed shall be calculated in the aforesaid manner –

 

Note:

# In case of disputed income for which appeal is filed under general provisions and provisions of MAT/ AMT, as the case may be, than in such cases disputed income shall not be reduced from the computation of disputed tax as per MAT/ AMT provisions

* In case where provisions of MAT/ AMT are not applicable then in that case, the latter part of computation of disputed tax shall be ignored

e. What will the amount payable under this Act?

Ans: If the tax arrears are

1. aggregate amount of disputed tax, interest charged or chargeable and penalty leviable on such disputed tax then amount payable –

(i) On or before 31st March, 2020 = 100% of the amount of disputed tax

(ii) After 31st March, 2020 but before the last date = 110% of the amount of disputed tax

2. relating to disputed interest or disputed penalty or disputed fees then the amount payable –

(iii) On or before 31st March, 2020 = 25% of the such disputed interest or penalty or fee

(iv) After 31st March, 2020 but before the last date = 30% of the such disputed interest or penalty or fee

C. Time Limit for passing order and payment thereof

a. Designated authority shall within 15 days from the date of receipt of declaration pass an order determining the amount payable by the declarant and issue a certificate containing such particulars

b. The declarant shall make payment within 15 days and submit the proof to the designated authority in the prescribed form

c. The designation authority after receipt of proof of payment shall pass an order stating that the declarant has paid the amount

D. Effects on filing of the declaration

a. The declaration shall be filed with prescribed authority and shall be verified in prescribed manner

b. Upon filing the declaration appeal or proceedings pending

> Before the Income-tax Appellate Tribunal and Commissioner of Income-tax (Appeals) in respect of disputed income or interest or penalty or fee and tax arrears shall deemed to be withdrawn on and after issuance of certificate under the Act.

> Before any appellate forum or any writ petition before High Court or Supreme Court against any order of tax arrears shall be withdrawn with the leave of Court, wherever required and shall furnish proof of such withdrawal.

> For arbitration, conciliation or mediation or any notice given under any law for the time being in force or other proceedings shall be withdrawn and shall furnish proof of such withdrawal

c. If the declarant

> furnishes particulars which are false or

> violates any conditions under the Act or

> acts in manner which is not in accordance with the undertaking given by him than,

the declaration so filed shall be void and all the proceedings and claims which were withdrawn and all consequences under the Income-tax Act against the declarant shall be revived

d. The order passed by the designated authority shall be conclusive as to the matters stated therein and the matter covered by such an order shall not be reopened in any other proceedings of the Income-tax Act or any other law for the time being in force

e. The designated authority shall not institute any proceedings in respect of an offence or impose or levy or charge, as the case may be penalty or interest under the income-tax Act in respect of the tax arrears.

E. Non-applicability of the provisions of this Act

On or before filing the declaration the provisions shall not be apply

1. In respect of tax arrears relating to –

a. assessment that has been completed under search action

b. assessment year in which prosecution has been instituted

c. any undisclosed income or asset located outside India

d. assessment or reassessment made on the basis of information received under an agreement made for exchange of information under sections 90 and 90A of the Income-tax Act

e. appeal pending before CIT(A) in respect of which notice under section 251 for enhancement of income has been issued

2. To any person in respect of whom order of detention has been made under the provisions of Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974

3. To any person in respect of whom prosecution for offence punishable under other prescribed laws has been instituted or such person has been convicted of any such offence

4. To any person notified under section 3 of Special Court (Trial of Offences Relating to Transactions in Securities) Act 1992.

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Qualification: CA in Practice
Company: Poojan Mehta & Co
Location: Mumbai, Maharashtra, IN
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