Q.1 Who are going to be benefitted from this scheme?

Ans. Every person, to whom demand is raised and who has filed the appeal before the CIT(A), High Court or Supreme Court and such appeal is pending on 31st Jan 2020.

Q.2 When is this scheme going to be implemented and what is the last date to opt for scheme.

Ans. As of date, the scheme is in the form of Bill only which is pending for President consent. As soon as it gets the consent of President, it will come into force from that day. Regarding last date, government is yet to notify that date, but the scheme is divided into two parts, one who opts for the scheme before 31st March 2020 will be given some benefit in preference of those who opted the scheme after 31st March 2020.

Q.3 What will be the amount of tax that a person have to pay after opting for the scheme?

Ans. As represented in above answer, the scheme is divided into two parts as follows

S.No. Nature of Tax Arrear Option 1 – If person opts the scheme on or before 31st March 2020 Option 2 – If person opts the scheme after 31st March 2020
1 Where demand pertains to disputed tax, interest & penalty Amount of disputed tax needs to be paid 110% of the amount of disputed tax
2 Where demand pertains to disputed interest, penalty & fees 25% of disputed interest, penalty, fees 30% of disputed interest, penalty, fees

Q.4 Whether a person can go for any other alternative if he/she has not benefitted by the scheme.

Ans. Once an order has been passed by the authority in this scheme, no person can opt for any other alternative either with help of any appellate forum, arbitrator, conciliator or mediator.

Q.5 What will be the time limit to pay the tax after opting for scheme. Is there any instalment benefit that will be provided to pay the disputed tax?

Ans. Once a declaration to opt for the scheme has been filed, proper officer shall within 15 days from the date of receipt of declaration determine the amount payable under this scheme and issue a certificate to declarant. After receiving of certificate, declarant have to pay the amount within next 15 days. There is no instalment option notified in the scheme yet, but department may based on the volume of tax amount grant an instalment scheme on the request of declarant.

Q.6 Who cannot enjoy the benefit of scheme?

Ans. The following person shall not be eligible to opt for the scheme –

  • Against whom search has been conducted and assessment has been framed under section 153A or 153C of the Act.
  • Against whom prosecution has been instituted.
  • Person having undisclosed income from a source located outside India or undisclosed asset located outside India.
  • Against whom the assessment has been framed based on the information available from tax treaties across the countries.
  • Against an order of CIT(A) who have enhanced the original tax liability.
  • Against any person in respect of whom an order of detention has been made under the provisions of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 subject to some conditions
  • Against any person in respect of whom prosecution for any offence punishable under the provisions of the Indian Penal Code, the Unlawful Activities (Prevention) Act, 1967, the Narcotic Drugs and Psychotropic Substances Act, 1985, the Prevention of Corruption Act, 1988, the Prevention of Money Laundering Act, 2002, the Prohibition of Benami Property Transactions Act, 1988 or for the purpose of enforcement of any civil liability has been instituted or such person has been convicted of any such offence punishable under any of those Acts.
  • Against any person notified under section 3 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992

Q.7 What will be the amount of disputed tax where the assessment has effect of reducing the loss and there is no such tax liability that needs to be paid?

Ans. In such a case, disputed tax shall be calculated  on the amount of income that has been added back to the loss of the assessee or that amount of expense that has been disallowed while computing loss of the assessee.

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14 Comments

  1. M. L. Joshi says:

    Appeal U/s 271(1(C) decided against the assessee by ITAT on 31.10.2019. Petition u/s 254 filed before ITAT on 18.1.2020 can the assessee filed declaration under Vivad se Vishwas Scheme.

  2. CA Anil Jain says:

    The scheme says that the designated authority shall within 15 days determine the amount payable by the declarant in accordance with the provisions of the act & grant a certificate. My question is, would the above statement mean that the designated authority basis its independent assessment may or may not grant some relief on the disputed tax ? And accordingly issue a certificate with final payable amount in it ?
    If the answer is NO then every assessee must check on the opportunity cost on opting this scheme vs Likely outcomes if had continued with normal proceedings. Please advise

  3. sanjay says:

    I received an order from IT dept on 02.02.2020 , for showing under income in AY 2017-18, this is mainly pertaining to the amount deposited in cash during demonetization.
    Till now , i have not yet filed the appeal.
    Can i opt for this scheme

    1. Shakshi Jain says:

      When your Assessment order has been passed (i.e. Date of Order). The Order has been passed before 31.12.2019 and now you have received the order dated 02.02.2020, you can file an appeal before CIT(A) and can opt VSV Scheme, if you have proof that you have received the order dated 02.02.2020 because Income Tax Department accepts your declaration for obtaining your VSV Scheme , if you have sufficient and plausible reason.

  4. SURESH LALCHANDBHAI GANDHI says:

    There are cross appeals pending before ITAT. The quantum of additions disputed by the assessee is less while the quantum of appeal filed by the revenue is more. If the assessee opt for the scheme, what will happen to the appeal filed by the Revenue? Whether it will quashed or will remain in force ?

  5. mahesh rathi says:

    suppose i have paid all the taxes and interest and the case is still pending so will we receive a refund? and is the said sceme ” vivad se vishvas” applicable to us

    1. Shakshi Jain says:

      If you have paid the whole demand which has been raised by the AO, and the case is pending before any Appellate forum then you can opt for scheme and will be eligible for refund.

      Source- Media

  6. MAHESH RATHI says:

    suppose all the taxes and intrest is been paid and the case is still pending so is there any chances of refund ? and are we eligible under the said sceme “vivad se vishwas”

  7. CA SK BHARTI@GMAIL.COM says:

    Question of Implementation and exercising of Direct Tax Vivad se Vishwas Scheme
    Fact: Penalty u/s 271(1)C for A.Y. 2011-12 was imposed in June 2019 and the assesse has filed a valid appeal before the CIT(A). A mistake apparent from record was found in calculating the penalty of 100% of tax avoided and the assesse has filed petition u/s 154/155 for reduction of penalty from Rs. 16,01,084 to Rs. 8,00,542 because the 30% rate was adopted on short term capital gain instead of applicable rate of 15%. The rectification has been done on 10.02.2020 and penalty reduced to Rs. 8,00,542.
    Question: The penalty which is pending before the CIT(A) has been rectified u/s 154/155 on 10.02.2020 against petition u/s 154/155 dated 03.01.2020. Penalty has been reduced from Rs. 16,01,084 to Rs. 8,00,542. As on 31.01.2020 the disputed penalty amount was Rs. 16,01,084 on which amount i.e. whether Rs. 16,01,084 or Rs. 8,00,542 the 25% amount is payable?
    CA S.K. BHARTI

  8. Rishabh Agrawal says:

    Suppose demand has been declared by AO on the basis of 2 grounds and I want to apply under this scheme only for 1 ground. Is it possible?

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