Vivad Se Vishwas: Settlement of Disputes under Income Tax Act

Last Updated On: Aug. 21, 2020, 9:14 p.m.
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VIVAD SE VISHWAS: SETTLEMENT OF DISPUTES UNDER INCOME TAX ACT

 

Government has taken necessary measures to reduce and settle the pending income tax litigations by introduction Vivad se Vishwas scheme through the budget.

Purpose of the scheme:

This scheme aims at benefiting both the government and taxpayers. The Government gets benefited by generating the revenue on time and the taxpayers who opts for this scheme gets relief from the various burden of various dues like interest, penalties etc.

 

PROVISIONS OF THE ACT:

The provisions of the act are applicable to disputes which are in the following cases:

(A) in a case where any appeal, writ petition or special leave petition is pending before the appellate forum i.e. Commissioner (Appeals), Income tax Appellate Tribunal, High Court or Supreme Court.

(B) in a case where an order in an appeal or in the writ petition has been passed by the appellate forum, and the time for filing an appeal or special leave petition against such order has not expired as on 31/01/2020,

(C) in a case where the order has been passed by the Assessing Officer on or before the specified date, and the time for filing an appeal against such order has not expired as on that date

(D) in a case where objection filed by the appellant is pending before the Dispute Resolution Panel under section 144C of the Income-tax Act as on the specified date,

(E) in a case where Dispute Resolution Panel has issued any direction under sub-section (5) of section 144C of the Income-tax Act and the Assessing Officer has not passed the order under sub-section (13) of that section on or before the specified date,

(F) in a case where an application for revision under section 264 of the Income-tax Act is pending as on the specified date, the amount of tax payable by the appellant if such application for revision was not to be accepted.

 

Important concepts under Vivad se Vishwas:

Cases Disputed Tax
Appeals pending as on 31.01.2020 Amount of Tax payable if such appeal was to be decided in favor of revenue
Where an order in appeal has been passed on or before 31.01.2020, and time for filing the further appeal has not expired as on 31.01.2020 Amount of tax payable after giving effect to the order so passed
Where an order in original has been passed by Assessing officer on or before 31.01.2020, and time for filing appeal has not expired as on 31.01.2020 Amount of tax payable in accordance with such order
Where objection filed is pending before Dispute Resolution Panel (DRP) u/s 144C as on 31.01.2020 Amount of tax payable if the DRP was to confirm the variations proposed in the draft order.
Where DRP has issued any direction u/s 144C(5) and the AO has not passed the final order as on 31.01.2020. Amount of tax payable as per the assessment order to be passed by the Assessing Officer
Where an application for revision under section 264 is pending as on the 31.01.2020 Amount of tax payable if such application for revision was not to be accepted

 

 

NON APPLICABILITY OF VIVAD-SE-VISHWAS ACT, 2020 [SECTION 9]

Tax arrears:

  • relating to an assessment year in respect of which an assessment has been made [143(3)/144/153A/153C] on the basis of search initiated u/s 132/132A if the amount of disputed tax exceeds Rs. 5 Crore;
  • relating to an assessment year in respect of which prosecution has been instituted on or before the date of filing of a declaration;
  • relating to any undisclosed income from a source located outside India or an undisclosed asset located outside India;
  • relating to an assessment or reassessment made on the basis of information received under an agreement referred to in section 90 or section 90A of the Income-tax Act,
  • To any person on whom prosecution for any offence punishable under 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 has been instituted on or before the filing of the declaration or such person has been convicted of any such offence punishable under any of those Acts;
  • in case of any person in respect of whom prosecution for any offence punishable under the provisions of the Indian Penal Code or some other acts or for the purpose of enforcement of any civil liability has been instituted on or before the filing of the declaration or such person has been convicted of any such offence punishable under any of those Acts; etc.
  • to any person notified under section 3 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 on or before the filing of declaration.

 

PROCEDURAL CONCEPTS UNDER VIVAD SE VISHWAS

  • The declaration under this scheme shall be filed by the declarant before the designated authority in Form-1 to the designated authority i.e., an officer not below the rank of a CIT of Income-tax notified by the PCIT for such purposes.
  • The declarant shall also furnish an undertaking in Form-2 for waiving his right, to seek or pursue any remedy or any claim in relation to the tax arrears which may otherwise be available to him.
  • The Form-1 and Form-2 referred to in rule 3 and Form-4 referred to in rule 5 shall be furnished electronically under digital signature, if the return of income is required to be furnished under digital signature and in other cases through electronic verification code.
  • The designated authority shall grant a certificate to the declarant in Form-3.
  • The declarant will have to pay the amount so determined within 15 days of receipt of such certificate and declarant shall intimate details of such payment to the designated authority in the Form-4, along with proof of withdrawal of the appeal, objection, application, writ petition, special leave petition.
  • Thereupon the designated authority shall pass an order under Form-5 stating that the declarant has paid the amount, payable as per the certificate granted.
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