Income Tax dept. permit the revision of declarations filed under Direct Tax Vivad se Vishwas scheme

Income Tax dept. permit the revision of declarations filed under the “Direct Tax Vivad se Vishwas Act scheme”

The CBDT has explained in FAQ’s that the 'Vivad Se Vishwas' scheme should not be used in a situation where proceedings are pending before the Income Tax Settlement Commission (ITSC) or where a writ against the ITSC order has been filed and issued a series of FAQs on the 'Vivad Se Vishwas' scheme

Objectives of Vivad Se Vishwas Scheme 2020

• Enable taxpayers to end their tax conflicts with the department through the settlement of the disputed tax & the waiver of interest and penalty payments. Obtain immunity from prosecution as well.
• The decrease in pending litigation on Income tax
• Create timely revenues for the government of India.

The Department of Income Tax has said that Entities who are filing declarations under the 'Vivad Se Vishwas' direct tax dispute resolution scheme may amend them before the tax authorities issue a certificate specifying tax arrears information and the amount payable. The CBDT stated that the scheme should not be used in a situation where proceedings are pending before the Income Tax Settlement Commission (ITSC) or where a writ against the ITSC order has been filed and issued a series of FAQs on the 'Vivad Se Vishwas' scheme.

The Central Board of Direct Taxes also explained that in a situation where the settlement of the Mutual Agreement Procedure(MAP) is pending or the MAP decision has not been ratified by the assessee, the relevant appeal is valid under 'Vivad ke Vishwas.'

"In such a situation, the applicant/ declarant will be required to withdraw both the application for Mutual Agreement Procedure and the appeal," it said.

The income tax department further explained that the taxpayer would be entitled to make declarations in cases where the Authority for Advance Ruling (AAR) decided in favour of the taxpayer & the department lodged an appeal before the High Court/Supreme Court, the taxpayer's gross income was quantified before Authority for Advance Ruling.

"Yes, the applicant is eligible/entitled because the Income is quantifiable, In such a situation, because the issue is resolved in respect of the taxpayer, just 50% of the disputed tax in question is payable,' said the Central Board of Direct Taxes.

In October, in view of the current COVID-19 pandemic, the government extended the 3^rd time deadline for making payments under the direct tax dispute resolution system 'Vivad Ke Vishwas' by 3 Months to 31^st Mar 2021. however, Declarations have to be filed by 31^st Dec 2020.

'The authorities ensure that the Direct Tax Vivad se Vishwas Act scheme is used for the largest number of taxpayers & since the scheme is very latest, this provision providing for correction prior to the issuance of the certificate will require the claimant to review the application in the event that any irregularities are found or any confirmation is subsequently received from the Authorities itself. The state had received INR 72,480 crore tax via the Direct Tax Vivad se Vishwas Act scheme till 17 November 2020.

Under the Direct Tax Vivad se Vishwas Act scheme, a total of 45,855 declarations were submitted, involving disputed tax demand of INR 31,734 crore till 17 November 2020. In addition, under the Direct Tax Vivad se Vishwas Act scheme, central public sector corporations are now resolving their disagreement/ taxation dispute with a total of INR 1,00,000/- crore.

This Direct Tax Viviad se Vishwas Act scheme provides for the settlement, in response to assessment or reassessment order, of the contest disputed tax, disputed interest, disputed penalty or disputed fees on payment of 100 % of the disputed tax amount & 25 % of the disputed penalty or interest or fee.

In consideration of matters protected by the declaration, the taxpayer is given exemption from the levy of interest, penalty liability, and initiation of any action for conviction of any offence under the Income-Tax Act 1961.

Direct Tax Vivad se Vishwas Act, 2020 was passed on 17th March 2020, aim to settle tax disputes under income tax locked up in se various appellate forums. In order to allow taxpayers more extra time to settle disputes, the deadline for filing & making payment without extra sums under Vivad se Vishwas has been extended from 31st  March 2020 to 30th  June 2020.

Later, this deadline was again extended to 31st Dec 2020. Therefore, both the declaration & the payment without an additional amount an extra sum under the Vivad se Vis Vishwas were required to be made by December 31, 2020.

Disclaimer: The content of this post isn't considered to be professional or legal advice, We aren't responsible for any damages arising from your access to the location content & must not be relied on or used as a substitute for legal advice from a lawyer professional in your jurisdiction. CARajput is among India's big digital compliance services platform which committed to helping people have started & developed their businesses. We had started with the goal of creating it easier for start-ups to start out their business. Our main aim is to assist the businessman with applicable laws & regulations compliance and providing support at each & every level to make sure the business stays compliant and growing continuously. For any query, help or feedback you may in touch on singh@carajput.com or Call or what’s-up on 9-555-555-480