Introduction

Direct Tax Vivad se Vishwas Scheme announced in Budget 2020. It is an opportunity to settle all your pending direct tax disputes. This Scheme aims at bridging the gap between income tax payer & tax authorities so as to build trust between them. In this article, we will discuss all Bout the Vivad se Vishwas Scheme details 2020 in this article.

Contents of this article

  • Direct Tax Vivad Se Vishwas Scheme details, 2020
  • Purpose of Vivad Se Vishwas Scheme
  • Eligibility Criterion To Avail The Benefit Of The Scheme
  • Exclusions From The Scheme
  • Procedure For Filing Declaration Under The Scheme
  • Wrapping up

Direct Tax Vivad Se Vishwas Scheme details, 2020

Direct Tax Vivad Se Vishwas Scheme, 2020 is an act of parliament that is applicable across India and announced in the annual budget of 2020. Under this scheme, the government is bound to settle the long-pending direct tax disputes.

It covers all the pending cases of Disputed tax (including interest or penalty on such disputed tax) in relation to an assessment or reassessment order, Disputed interest, disputed penalty, or disputed fees. Disputed tax can also include the tax determined on default in respect of tax deducted at source (TDS) or tax collected at source (TCS), Disputed tax shall include a tax on enhancement notice.

The Direct Tax Vivad se Vishwas Act, 2020 installed a dispute resolution mechanism, which is applicable to all appeals/litigation/petitions filed by the taxpayers or the income tax department, which were pending on or before 31st Jan 2020, before any judicial forum.

Around 4.8 lakh cases amounting to a blockage of Rs 9.32 trillion are pending at various Income tax appellate forums. Hence to give it a fresh start government of India bought this scheme to clear all pending disputes.
The last date for making a declaration under the Scheme is 31st Jan 2021 (as extended).

Purpose of Vivad Se Vishwas Scheme

The main aim of the government in bringing this Vivad Se Vishwas Scheme is to build a sense of trust between the taxpayer and the income tax department. However, the following also are the purposes of this Scheme.

• Reduce the number of pending litigations in various judicial/appellate forums.
• Payments of disputed tax in one go and get a complete waiver from payment of Interest and penalty on it.
• Generate revenue for the Government.

Eligibility Criterion To Avail The Benefit Of The Scheme

Followings cases can be covered under Vivad se Vishwas Scheme:

  •  Special Leave Petition (SLP), Appeals, Writs, or any Arbitration proceedings filed on or before 31st Jan 2020
  • Orders under which, the time of filing an appeal is not expired on 31st Jan 2020.
  • Pending cases before Dispute Resolution Board (DRB).
  • Cases for which DRB is yet to pass the final order on or before 31st Jan 2020.
  • Disputes for which the payment has already been made shall also be eligible.
  • Disputed tax can also include the tax determined on default in respect of tax deducted at source (TDS) or tax collected at source (TCS).
  • Disputed tax shall also include a tax on enhancement notice.

Exclusions From The Scheme

Following cases are not covered under the Scheme:

  • Search cases if disputed tax in a year is more than Rs.5 Crore.
  • Cases where the prosecution has been initiated by the department under the Income-tax Act or under the Indian Penal Code.
  • Cases involving undisclosed foreign income and assets.
  • Cases completed on the basis of information received from a foreign jurisdiction.
  • Cases where the 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.

Procedure For Filing Declaration Under The Scheme

This declaration under this Scheme must be filed in a prescribed format. Step by step procedure for filing declaration is as follows:

Step 1: Log in to Income Tax Portal.
Step 2: Select Vivad se Vishwas tab.
Step 3: Choose prepare and submit DTVSV Form.
Step 4: Select the year and filing type.
Step 5: Fill in the declaration.

  • The declaration shall be filed by the declarant in Form-1, along with undertaking waiving rights for any remedy in Form-2 before the designated authority (DA).
  • Once the declaration is filed, DA shall grant certificate containing amount payable in Form-3, and any appeal pending before the Income-tax Department shall be deemed to be withdrawn from the date on which certificate is issued by the competent authority.

Step 6: File the required documents.
Step 7: Pay the amount.

  •  Applicant shall pay the amount as mentioned in Form-3, within 15 days and intimate the same along with proof of withdrawal of appeal in Form-4.

Step 8: Order pass in Form-5 confirming payment made and grant immunity from penalty and interest.
Note:

  •  The Form is to be filled through Aadhar OTP, EVC or DSC.
  • If any appeal before the appellate forum or any writ petition before the High Court / Supreme Court in lieu of tax arrears is filed by the declarant, then it must be withdrawn after issuance of such certificate by the competent authority.
  • No appellate forum or mediator shall proceed to decide any issue relating to the tax arrears mentioned in the declaration in respect of which an order has been made by the designated authority.
  • The declaration shall be presumed never to have been made if:

    o Any material particular furnished in the declaration is found to be false anytime.
    o The declarant violates any of the conditions referred to, in this Act;
    o The declarant acts in any manner which is not in accordance with the undertaking given by him.

And in such cases, all the proceedings and claims which were withdrawn against the declarant shall be deemed to have been revived.

Wrapping up

In most of the cases of pending litigations, the amount of penalty and interest surpasses the disputed taxes, which will be waived under the Scheme. For those assessed whose amount of tax is less than penalty and interest, this scheme is beneficial. On the other hand, for assesses whose dispute taxes is of high amount, it may not be possible for the taxpayer to opt for the Scheme, or in case the taxpayer has more chances to win the case, this Scheme is not beneficial.
However, it totally depends on the taxpayer to opt or not, for the Scheme. Considering the rules and cost involved, the taxpayer can make his decision.

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