Vivad Se Vishwas Scheme 2020

Purpose of the scheme:

Ø  To reduce pending income tax litigation.

Ø  Generating timely revenue to GOI.

Ø  Benefiting tax payer by providing them peace of mind, certainty and savings on account of time and resources

Cut – off Date: ‘SPECIFIED DATE’ – Section 2(n):

Ø  Case pending in CIT (Appeals), ITAT, HC & SC

OR

Ø  Case is not pending but assessee has an intention to file an appeal i.e., due date of filing is not completed i.e., Deemed appeal on 31.01.2020.

Eligibility of an Appellant:

APPELLANT means

Ø  In whose case an appeal or WP or SLP has been filed by him or by ITAT or by both before an appellate forum and such appeal or petition is pending on specified date.

Ø  In whose case and order has been passed by AO or CIT(A) or ITAT in an appeal or by the HC in a WP on or before the specified date and the time for filing an appeal or SLP has not expired i.e., Deemed Appeal.

Ø  A person who has filed objections before DRP and DRP has not issued an directions or has issued the directions but AO has not passed order.

Ø  A persons whose applications u/s 264 is pending before CIT on the specified date.

Meaning of Disputed Tax:

DISPUTED TAX means Income Tax including surcharges and cess payable by the appellant:

Ø  In case an Appeal, WP, SLP is pending as on 31.01.2020 ; Tax payable as if such appeal etc., was to be decided against the assessee.

Ø  In case where an order in appeal or WP has been passed by the appellate forum on or before the specified date and the time for filling appeal has not expired : Tax payable after giving effect to the order so passed.

Ø  In case the order has been passed by AO on or before specified date and the time for filing appeal has not expired on 31.03.2020 : Tax payable in accordance with the order of AO.

Ø  In case where CIT(A) has issued notice of enhancement u/s 251 on or before 31.01.2020 : The disputed tax shall be increased by the amount of tax pertaining to the increase for which notice of enhancement has been issued

Ø  Where the dispute in relation to an related to reduction of tax credit u/s 115JAA/115JB or any Loss or Depreciation. The appellant shall have an option:

a) To include the amount of tax related to such tax credit or loss or depreciation in the amount of disputed tax   (OR)

b) To carry forward the reduced tax credit or loss or depreciation in the prescribed manner

Meaning of Tax Arrear:

Ø  The aggregate amount of disputed tax, interest chargeable or charged on such disputed tax and penalty leviable or levied on such disputed tax; or

Ø  Disputed interest; or

Ø  Disputed penalty or

Ø  Disputed fees as determined under the provisions of Income Tax Act.

 Cases not eligible:

Ø  Tax arrear relating to an assessment year in respect of which assessment u/s 143(3)/144/147/153A or 153C is made on the basis of search initiated u/s 132/132A if the amount of disputed tax exceeds Rs.5 Crs.

Ø  Tax arrear relating to an AY in respect of which prosecution has been instituted on or before the declaration filing

Ø  Tax arrears relating to any undisclosed income from a source located outside India or undisclosed asset located outside India.

Ø  Relating to assessment/reassessment made on the basis of information received under an agreement referred u/s 90/90A.  

Relief/Amnesty – Section 3: 

Relevant Case	Amount payable on or before 31.03.2020	Amount payable on or after 01.04.2020 & before last date to be notified
Tax arrears is the aggregate amount of disputed tax, interest chargeable or charged on such disputed tax and penalty leviable on such disputed tax	Amount of Disputed Tax	110% of the Disputed Tax
Tax arrears relates to tax, interest, penalty determined on basis of search u/s 132/132A	125% of Disputed Tax	135% of Disputed Tax
Where the tax arrear relates to disputed interest or disputed penalty or disputed fee	25% of Disputed Interest/Penalty/Fee	30% of Disputed Interest/Penalty/Fee
Where the tax arrear relates to disputed interest or disputed penalty or disputed fee	25% of Disputed Interest/Penalty/Fee	30% of Disputed interest/Penalty/Fee
Where an appeal or WP or SLP is filed by Income Tax Authority on any issue before appellate forum	One-half of above referred amount	One-half of above referred amount
Where an appeal is filed before CIT(A) on an issue on which the assessee has already got a decision in his favour from ITAT/HC (an such decision is not reversed)	One-half of above referred amount	One-half of above referred amount
Where an appeal is filed by the appellant on any issue before ITAT on which he has already got a decision in his favour from HC or SC	One-half of above referred amount	One-half of above referred amount

What is the procedure:

Ø  A ‘declarant’ i.e., an appellant may file a declaration in prescribed form to the Designated Authority (DA) on or before the last date.

Ø  Declarant shall also furnish an ‘undertaking’ waiving his right to seek or pursue any remedy or claim in relation to tax arrear which may otherwise be available to him.

Ø  The DA shall, within 15 days from the date of receipt of declaration, by order, determine the amount payable by declarant and grant a certificate to the declarant containing particulars of tax arrears and the amount payable by him in the prescribed form.

Ø  Declarant shall pay the amount determined by DA within 15 days of receipt of certificate and intimate the details of such payment to DA in prescribed form.

Ø  Thereupon, the DA shall pass an order stating that the declarant has paid the amount.

Ø  DA shall not institute any proceedings in respect of offence or impose or levy any penalty or charge any interest under the Income tax Act in respect of tax arrears. 

Effect of Declaration

Ø  Upon filing of declaration, any appeal pending before CIT(A)/ITAT in respect of disputed tax arrear shall be deemed to have been withdrawn from date of issue of certificate by DA to assessee.

Ø  Where declarant has filed any appeal before appellate forum or HC or SC, he shall withdraw such appeal or WP or SLP with the leave of court after issuance of certificate by DA and submit a proof of the same with DA.

Ø  In case of pending arbitration, conciliation or mediation proceedings etc., the declarant shall withdraw the claim and furnish the proof of same to DA