TMI BlogClarifications on provisions of the Direct Tax Vivad se Vishwas Act, 2020X X X X Extracts X X X X X X X X Extracts X X X X ..... e date for payment without additional amount under Vivad se Vishwas was extended from 31 st December, 2020 to 31 st March, 2021. The last date for filing declaration under Vivad se Vishwas was also notified as 31 st December, 2020. Subsequently, the Central Board of Direct Taxes issued a circular no. 18/2020 dated 28th October, 2020 relaxing the time limit of 15 days prescribed in section 5(1) of Vivad se Vishwas for making payment of amount payable, as determined in a certificate issued by the Designated Authority. 2. In order to facilitate the taxpayers, the Board had vide circular no. 9/2020 dated 22 nd April, 2020 issued clarifications in form of answers to 55 frequently asked questions (FAQs) on issues related to eligibility, computation of amount payable, procedure and consequences under Vivad se Vishwas. Several representations have been received thereafter seeking further relaxation and clarifications with respect to such issues. Some of these representations have already been addressed through the aforesaid notification dated 27 th October, 2020 and circular dated 28 th October, 2020 . 3. Section 10 and 11 of the Vivad se Vishwas empowers the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eneral directions and income is not quantifiable, appeal against such order is not eligible under Vivad se Vishwas. However, if order u/s 263 of the Act contains only specific directions and income is quantifiable (and does not contain any general directions due to which income is not quantifiable), appeal against such order is eligible under Vivad se Vishwas. In such case, assessee is required to settle all the issues in the order, which are subject matter of order u/s 263 of the Act as well as issues pending in appeal (or issues in respect of which time to file appeal has not expired on. 31st Jan 2020), if any, with reference to the said order. Q. No. 59. Whether the taxpayer in whose case the time limit for filing of appeal has expired before 31st Jan 2020 but an application for condonation of delay has been filed is eligible? Answer: If the time limit for filing appeal expired during the period from 1st April 2019 to 31st Jan, 2020 (both dates included in the period), and the application for condonation is filed before the date of issue of this circular, and appeal is ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the taxpayer and the Department has gone in writ or appeal before the High Court/Supreme Court and the total income of the taxpayer was quantifiable on the facts of the case before AAR, is the taxpayer eligible under Vivad se Vishwas? Answer Yes, the taxpayer is eligible since the income is quantifiable. In such case, since the issue is covered in favour of taxpayer, only 50% of the disputed tax is payable. Q. No. 66. Appeal has been set aside to CIT(A) / Dispute Resolution Panel (DRP) and was pending as on 31st Jan 2020? Whether it is eligible? Answer: Yes. Such case can be settled under Vivad se Vishwas and the set aside issues will be deemed to be pending at the level of CIT(A) / DRP as on 31st Jan 2020. However, all issues which were either pending in appeal (whether set aside or not) or in respect of which time to file appeal has not expired on 31st Jan 2020 have to be settled. Q. No. 67. Whether in cases where the appellate authority has quashed the prosecut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a taxpayer, prosecution has been instituted for assessment year 2012-13 with respect of an issue which is not in appeal. Will he be eligible to file declaration for issues which are in appeal for this assessment year and in respect of which prosecution has not been launched? Answer: The ineligibility to file declaration relates to an assessment year in respect of which prosecution has been instituted on or before the date of declaration. Since in this example, for the same assessment year (2012-13) prosecution has already been instituted, the taxpayer is not eligible to file declaration for this assessment year even on issues not relating to prosecution. Q. No. 74. If the prosecution is for a different assessment year and the appeal for a different one, would it debar the assessee from the benefit of this scheme? Answer: Prosecution in one assessment year does not debar the assessee from filing declaration for any other assessment year if it is otherwise eligible. Q. No. 75. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns (giving rise to disputed tax liability), how the prepaid taxes will be adjusted against the disputed tax liability or undisputed tax liability? Answer: If prepaid tax, being TDS/TCS, is clearly identifiable with the source of income, it will be adjusted against tax liability with respect to such income. Rest of the pre-paid tax, which cannot be clearly identified with the source of income, will be apportioned against the remaining tax liability. QUESTIONS RELATED TO CONSEQUENCES (Q. No. 80 - 87) Q. No. 80. Whether appeal against penalties that are not related to quantum assessment like penalty u/s 271B, 271 BA, 27IDA of the Actetc. are also waived upon settlement of appeal relating to 'disputed tax? Answer: No, appeal against such penalty order is required to be settled separately. Q.No. 81. In respect of some loan, addition was made u/s 68 of the Act. Appeal is pending before CIT(A) and the assessee is eligible for opting Vivad se Vishwas. After making th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d penalty, if any, with reference to said income and if such interest or penalty qualifies for Vivad se Vishwas, he can settle the same by paying the applicable amount (25% / 30%). In case of (ii), since the deductee has settled his appeal (or arbitration) and paid the tax he would get waiver from interest and penalty. Deductor will not be required to pay tax under Vivad se Vishwas with reference to non-deduction of tax on said income. However, he shall be required to pay interest and penalty, if any, with reference to said income and if such interest or penalty qualifies for Vivad se Vishwas, he can settle the same by paying the applicable amount (25% / 30%). Q. No. 85. In the scenarios mentioned in Q. no. 84, what will be the amount of tax credit if the payment of amount on settlement of section 201 appeal is more than 100% of disputed tax for it being a search case or for the reason that the payment is made after 31st March 2021? Answer: Tax credit in the hands of deductee cannot be more than 100% of disputed tax, even if the payment of more than 100% of disputed tax is requi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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