VIVAD SE VISHWAS SCHEME, 2020

Vivad Se Vishwas Scheme is introduced by the Government of India with intent to resolve a major part of Income Tax litigations worth about Rs 4.8 lakh crores by way of remission and waiver of interest, and penalty for all pending disputes for which an appeal is filed.
The Objectives of the Scheme are as follows:

  • Reduce income tax pending litigation
  • Generate timely revenues for the Government
  • Help taxpayers end their tax disputes with the department by paying disputed tax and get waiver from payment of interest and penalty as well as immunity from prosecution.

SCOPE & ELIGIBILITY

Originally, the Bill had proposed to cover only appeals pending before CIT(A), ITAT, High Court and Supreme Court.  The scope of the Scheme has now been expanded by covering the following matters :

CASEELIGIBILITY
1. APPEALEligible if Pending Before (On 31st January, 2020):
-CIT (Appeals)
-ITAT
-High Court
-Supreme Court
-Writ Petitions before High Court
-SLPs before Supreme Court
-Time Limit for filing Appeal has not expired on 31/01/2020
2. DISPUTE RESOLUTION PANEL (DRP)Eligible if:
-Objections filed by Assessee against Draft Order is Pending Before DRP
-DRP has given directions but order has not been passed on 31/01/2020
3. REVISION u/s 264 OF THE INCOME TAX ACTEligible if Pending Before (On 31st January, 2020):
-Principal Commissioner
-Commissioner
4. AUTHORITY FOR ADVANCE RULING (AAR)Eligible where, AAR has passed Order & determined Total Income of the Assessee & subsequently Writ against such Order is pending before High Court
5. SEARCH & SEIZUREEligible if Disputed Tax In A.Y. DOESNOT EXCEED Rs. 5 Crores
6. DEFAULT IN RESPECT OF TDS/ TCSEligible if Tax related to TDS and TCS which are disputed and pending in appeal is covered
7. ASSESSMENT SET ASIDE/ FRESH ASSESSMENT CARRIED OUTEligible under the Scheme. However, the Appellant shall have to settle all other issues in the assessment in respect to which appeal is pending or time to file appeal has not expired on 31/01/2020
8.ENHANCEMENT NOTICE ISSUED BY CIT (APPEALS)Eligible under the Scheme. However, the disputed tax in such cases shall be increased by the amount of tax pertaining to issues for which notice of enhancement has been issued.
9. APPEAL AGAINST IMPOSITION OF FEES u/s 234E/ 234F OF THE INCOME TAX ACTEligible to file declaration for disputed fee
10. ARBITRATIONEligible to file declaration for disputed tax, i.e. Tax (including surcharge and cess) on the disputed income with reference to which the arbitration has been filed.

EXCLUSIONS

  • Search cases if disputed tax in an A.Y. exceeds Rs.5 crore
  • Cases where prosecution has been initiated by the department under Income-tax Act or under Indian Penal Code.
  • Cases involving undisclosed foreign income and assets.
  • Cases completed on the basis of information received from foreign jurisdiction.
  • Disputes pending before AAR
  • Waiver Application with respect to interest u/s 234A/ 234B /234C of the Income Tax Act.
  • Cases where person is notified under Special Courts(Trial of Offences Relating to Transactions in Securities) Act, 1992 or detained under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974.
  • Cases covered under Narcotic Drugs and Psychotropic Substances Act, Unlawful Activities (Prevention) Act, Prevention of Corruption Act, Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, Prevention of Money Laundering Act, Prohibition of Benami Property Transactions Act.

PAYMENT TERMS

Payment made on or before 30/06/2020Appeals / Writ / SLP / DRP objections / revision application under section 264 of ITA / arbitration filed by the assesseeAppeals / Writ/ SLP filed by the Department
Appeal, Writ, SLP, arbitration relates to disputed tax
Other than Search Cases

100% of the disputed tax  [waiver of interest & penalty]

50% of the disputed tax  [waiver of interest & penalty]
Appeal, Writ, SLP, arbitration relates to disputed tax
Search Cases
125% in search cases  [waiver of interest & penalty]62.5% of the disputed tax  [waiver of interest & penalty]
Appeal, Writ, SLP, arbitration relates only to disputed penalty or interest or fee25% of the disputed penalty or interest or fee12.5% of the disputed penalty or interest or fee

CONSEQUENCES

  • All appeals, Writs, SLPs, arbitration  to be withdrawn (both by taxpayer and by department)
  • Writs, SLPs, arbitration  to be withdrawn (both by taxpayer and by department)
  • Immunity from levy of interest, penalty
  • Immunity from  institution of any proceeding for prosecution for any offence under the Income-tax Act in respect of matters covered in the declaration.

PROCEDURE

Other Salient Features

  • Credit for taxes paid against the disputed tax before filing declaration shall be available to the declarant. For Example, against disputed tax of Rs. 10,000 as determined by D.A.,if an amount of Rs. 8,000/- has already been paid, the appellant would be required to pay only the remaining Rs. 2,000 by 30/06/2020.
  • If the Disputed Demand (including Interest) has already been paid fully or partially, which is more than the amount payable under Vivad se Vishwas, the appellant will be entitled to refund without interest under section 244A of the Act. 

Disclaimer: The contents of this document are solely for informational purpose. It does not constitute professional advice or a formal recommendation. While due care has been taken in preparing this document, the existence of mistakes and omissions herein is not ruled out. The author does not accept any liabilities for any loss or damage of any kind arising out of any inaccurate or incomplete information in this document nor for any actions taken in reliance thereon. No part of this document should be distributed or copied without express written permission of the author.

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