Vivad Se Vishvas Scheme, 2020

About The Scheme

The provisions of the Bill shall be applicable to appeals filed by taxpayers or the Government, which are pending with any appellate form i.e. Commissioner (Appeals), Income-tax Appellate Tribunal, High Court or Supreme Court as on 31st January 2020 irrespective of whether demand in such cases is pending or has been paid. The pending appeal may be against disputed tax, interest or penalty in relation to an assessment or reassessment order or against disputed interest, disputed penalties where there is no disputed tax or against the tax determined on defaults in respect of tax deducted at source or tax collected at source

Benefits Of The Scheme:

1. 1. To the Assessee
      • Quick disposal of Income Tax disputes
      •  Waiver/reduced interest and penalty
   2. To the Government
      • Reducing the number of pending litigation
      • Generating timely revenues for the government

What cases can be sought shelter under this scheme?

1. 1. Filed and pending as on 31st January 2020
      •  Appeals pending before the Commissioner (Appeals), Income Tax Appellate Tribunal, High Court or Supreme Court.
      • Writ Petitions pending before the High Court.
      • Special Leave Petitions pending before the Supreme Court.
      • Objection pending with the Dispute Resolution Panel (DRP) under section 144C.
   2. Order passed
      • By Assessing officer or Commissioner (Appeals) or the Income Tax Appellate Tribunal in any appeal
      • By the High Court in any writ petition
      • And the time limit for filing an appeal with the next highest forum against the order passed has not expired as of 31st January 2020.

What is the relief given under this act?

• The act provides for relief from levy of interest and penalty or levy of reduced interest and penalties.
  • Initially, the act provided that the application shall be made on or before 31st March 2020 in orders to avail the benefit of no interest and penalty. However, this date has now been extended up to 30th June 2020 vide the Taxation and other laws (Relaxation of Certain Provisions) Ordinance dated 31st March 2020.

Type of Dispute	Amount payable if application filed before 30th June 2020	Amount payable if application filed after 30th June 2020
Disputed Tax             + Interest on such tax              + Penalty on such tax	100% of Disputed Tax	100% of Disputed Tax + 10% of Disputed Tax (provided that this 10% does not exceed the interest and penalty) i.e. 110% of the tax amount
Tax, interest or penalty determined in search cases	100% of Tax amount + 25% of the Tax (provided that this 25% does not exceed the interest and penalty) i.e 125% of the tax amount	100% of Tax amount + 35% of the Tax (provided that this 35% does not exceed the interest and penalty) i.e 135% of the tax amount
Disputed Interest or Disputed Penalty or Disputed Fee	25% of the disputed amount.	35% of the disputed amount.

What is a disputed tax, disputed interest, disputed penalty or disputed fee?

1. Disputed Tax
   • Tax payable by an Assessee if the appeal or writ or special leave petition or objection pending at any forum was to be decided against him (or)
   • The amount mentioned in the order or direction passed (whose time limit for filing an appeal has not expired or the AO has not passed an order) (or)
   • The amount payable if the application for revision was not accepted.
2. Disputed Interest
   • Any interest which is NOT levied or leviable on the disputed tax and where an appeal is filed against such disputed interest.
   • This could include cases where the Assessee is not disputing any tax amount but only the interest amount determined as per any order
3. Disputed Penalty
   • Any penalty determined in any CASE under the provisions of the Income Tax Act, which is NOT levied or leviable on the disputed income or disputed tax and where an appeal is filed against such disputed penalty

Procedure for filing application and completion of the proceedings

• File an application in Form-1 electronically.
• An undertaking in Form-2 shall be filed by the applicant waiving all his rights or powers to receive any benefit under the appeal filed by him or to seek any other remedy.
• Upon filing the application, the proper officer shall verify the application and call for any additional information or documents, if needed.
• If the application is proper in all respect, the proper officer shall issue a certificate in Form-3 determining the amount to be paid by the applicant within 15 days of the receipt of the proper application.
• The applicant shall with 15 days from the receipt of Form-3, make the payment and furnish the proof of making payment in Form-4. The proof that the appeals have been withdrawn shall also be furnished.
• Upon being satisfied that the necessary payment is made, the proper officer shall pass the order for full and final settlement of the tax arrear in Form-5.

It is to be noted that the entire process of filing of application and undertaking, issue of Form-3, intimation of payment and passing of final order shall be carried out electronically.

Application is to be filed separately for every Assessment year and no single application for multiple Assessment years or multiple appeals/orders will be accepted.