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Clarifications on provisions of the Direct Tax Vivad se Vishwas Bill, 2020
March, 17th 2020
                                                                                 Circular No. 712020
                                     F. No. IT(A)l1I2020-TPL
                                        Governmeut of India
                                        Ministry of Finance
                                      Department of Revenue
                                  Central Board of Direct Taxes

                                                 ****
                                                                           Dated:    4th   March, 2020


    Snb.: Clarifications on provisions of the Direct Tax Vivad se Vishwas Bill, 2020 - reg.


       During the Union Budget. 2020 presentation, the 'Vivad se Vishwas' Scheme was
announced to provide for dispute resolution in respect of pending income tax litigation. Pursuant to
Budget announcement, the Direct Tax Vivad se Vishwas Bill, 2020 (Vivad se Vishwas) was
introduced in the Lok Sabha on 5th Feb, 2020. The objective of Vivad se Vishwas is to inter alia
reduce pending income tax litigation, generate timely revenue for the Government and benefit
taxpayers by providing them peace of mind, certainty and savings on account of time and resources
that would otherwise be spent on the long-drawn and vexatious litigation process. Subsequently,
based on the representations received from the stakeholders regarding its various provisions, official
amendments to Vivad se Vishwas have been proposed. These amendments seek to widen the scope
of Vivad se Vishwas and reduce the compliance burden on taxpayers.
2. After introduction of Vivad se Vishwas in Lok Sabha, several queries have been received from
the stakeholders seeking clarifications in respect of various provisions contained therein.
Government has considered these queries and decided to clarify the same in form of answers to
frequently asked questions (FAQs). These clarifications are, however, subject to approval and
passing of Vivad se Vishwas by the Parliament and receiving assenLllLthc_H-'ln'hleJ'n:sidllllLllf_
India.

"QUESTIONS ON SCOPE/ ELIGIBILITY (Q. No.1 - 24)"

Question No.         1.    Which appeals are covered under the Vivad se Vishwas?

Answer:                   Appeals pending before the appellate forum [Commissioner (Appeals),
                          Income Tax Appellate Tribunal (ITAT), High Court or Supreme Court],
                          and writ petitions pending before High Court (HC) or Supreme Court
                          (SC) or special leave petitions (SLPs) pending before SC as on the 31,t
                          day of January, 2020 (specified date) are covered. Cases where the
                          order has been passed but the time limit for filing appeal under the
                          Income-tax Act, 1961 (the Act) against the order has not expired as on
                          the specified date are also covered. Similarly, cases where objections
                          filed by the assessee against draft order are pending with Dispute
                          Resolution Panel (DRP) or where DRP has given the directions but the
                    Assessing Officer (AO) has not yet passed the final order on or before
                    the specified date are also covered. Cases where revision application
                    under section 264 of the Act is pending before the Principal
                    Commissioner or Commissioner are covered as well. Further, where a
                    declarant has initiated any proceeding or given any notice for
                    arbitration, conciliation or mediation as referred to in clause 4 of the Bill
                    is also covered.
Question No.   2.   If there is no appeal pending but the case is pending in arbitration,
                    will the taxpayer be eligible to apply under Vivad se Vishwas? l.f yes
                    what will be the disputed tax?

Answer:             An assessee whose case is pending in arbitration is eligible to apply for
                    settlement under Vivad se Vishwas even if no appeal is pending. In such
                    case assessee should fill the relevant details applicable in his case in the
                    declaration form. The disputed tax in this case would be the tax
                    (including surcharge and cess) on the disputed income with reference to
                    which the arbitration has been filed.

Question No.   3.   Whether Vivad se Vishwas can be availed for proceedings pending
                    b~fore Authority of Advance Ruling (AAR)? l.f a writ is pending
                    against order passed by AAR in a HC will that case be covered and
                    how disputed tax to be calculated?

Answer:             Vivad se Vishwas is not available for disputes pending before AAR.
                    However, if the order passed by AAR has determined the total income
                    of an assessment year and writ against such order is pending in HC, the
                    appellant would be eligible to apply for the Vivad se Vishwas. The
                    disputed tax in that case shall be calculated as per the order of the AAR
                    and accordingly, wherever required, consequential order shall be passed
                    by the AO. However, if the order of AAR has not determined the total
                    income, it would not be possible to calculate disputed tax and hence
                    such cases would not be covered. To illustrate, if AAR has given a
                    ruling that there exists Permanent Establishment (PE) in India but the
                    AO has not yet determined the amount to be attributed to such PE, such
                    cases cannot be covered since total income has not yet been determined.

Question No.   4.   An appeal has been filed against the interest levied on assessed tax;
                    however, there is no dispute against the amount of assessed tax. Can
                    the ben~fit o.fthe Vivad se Vishwas be availed?

Answer:             Declarations covering disputed interest (where there is no dispute on tax
                    corresponding to such interest) are eligible under Vivad se Vishwas. It
                    may be clarified that if there is a dispnte on tax amount, and a
                    declaration is filed for the disputed tax, the full amount of interest levied
                    or leviable related to the disputed tax shall be waived.
Questiou No.   5.   What if the disputed demand including interest has been paid by the
                    appellant while being in appeal?

Answer:             Appeals in which appellant has already paid the disputed demand either
                    partly or fully are also covered. If the amount of tax paid is more than
                    amount payable under Vivad se Vishwas, the appellant will be entitled
                    to refund without interest under section 244A of the Act.

Question No.   6.   Can the benefit of the Vivad se Vishwas be availed, if a search and
                    seizure action by the Income-tax Department has been initiated
                    against a taxpayer?


                    Case where the tax arrears relate to an assessment made under section
Answer:             143(3) or section 144 or section 153A or section 153C of the Act on the
                    basis of search initiated under section 132 or section 132A of the Act
                    are excluded if the amount of disputed tax exceeds five crore rupees in
                    that assessment year.

                    Thus, if there are 7 assessments of an assessee relating to search &
                    seizure, out of which in 4 assessments, disputed tax is five crore rupees
                    or less in each year and in remaining 3 assessments, disputed tax is
                    more than five crore rupees in each year, declaration can he filed for 4
                    assessments where disputed tax is five crore rupees or less in each year.

Questiou No.   7.   If assessment has been set aside for giving proper opportunity to an
                    assessee on the additions carried out by the AO. Can he avail the
                    Vivad se Vishwas with respect to such additions?

Answer:             If an appellate authority has set aside an order (except where assessment
                    is cancelled with a direCtion that assessment is to be framed de novo) to
                    the file of the AO for giving proper opportunity or to carry out fresh
                    examination of the issue with specific direction, the assessee would be
                    eligible to avail Vivad se Vis/mas. However, the appellant shall also be
                    required to settle other issues, if any, which have not been set aside in
                    that assessment and in respect of which either appeal is pending or time
                    to file appeal has not expired. In such a case disputed tax shall be the tax
                    (including surcharge and cess) which would have been payable had the
                    addition in respect of which the order was set aside by the appellate
                    authority was to be repeated by the AO.

                    In such cases while filling the declaration fonn, appellant can indicate
                    that with respect to the set-aside issues the appeal is pending with the
                    Commissioner(Appeals).
Questiou No.   8.    Imagine a case where an appellant desires to settle concealment
                     penalty appeal pending b~fore CIT(A), while continuing to litigate
                     quantum appeal that has travelled to higher appellate forum.
                     Considering these are two independent and different appeals, whether
                     appellant can settle one to exclusion of others? If yes, whether
                     settlement ofpenalty appeal will have any impact on quantum appeal?






Answer:              If both quantum appeal covering disputed tax and appeal against penalty
                     levied on such disputed tax for an assessment year are pending, the
                     declarant is required to file a declaration fonn giving details of both
                     disputed tax appeal and penalty appeal. However, he would be required
                     to pay relevant percentage of disputed tax only. Further, it would not be
                     possible for the appellant to apply for settlement of penalty appeal only
                     when the appeal on disputed tax related to such penalty is still pending.

Question No.   9.    Is there any necessity that to qualifY under the Vivad se Vishwas, the
                     appellant should have tax demand in arrears as on the date of.filing
                     declaration?


                     Vivad se Vishwas can be availed by the appellant irrespective of
Answer:              whether the tax arrears have been paid either partly or fully or are
                     outstanding.
Question No.   10.   Whether 234E and 234F appeals are covered?

Answer:              If appeal has been filed against imposition of fees under sections 234E
                     or 234F of the Act, the appellant would be eligible to file declaration for
                     disputed fee and amount payable under Vivad se Vishwas shall be 25%
                     or 30% of the disputed fee, as the case may be.

                     If the fee imposed under section 234E or 234F pertains to a year in
                     which there is disputed tax, the settlement of disputed tax will not settle
                     the disputed fee. If assessee wants to settle disputed fee, he will need to
                     settle it separately by paying 25% or 30% of the disputed fee, as the
                     case may be.

Question No.   11.   In case where disputed tax contains qualilYing tax arrears as also
                     non-qualifying tax arrears (such as, tax arrears relating 10 assessment
                     made in respect of undisclosedforeign income):

                        (i) Whether assessee is eligible to the Vivad se Vishwas itse(f?
                        (ii) If eligible, whether quantification of disputed tax can
                             exclude/ignore non-qualifYing tax arrears?

Answer:              If the tax arrears include tax on issues that are excluded from the Vivad
                     se Vishwas, such cases are not eligible to file declaration under Vivad se
                     Vishwas. There is no provision under Vivad se Vishwas to settle part of
                     a pending dispute in relation to an appeal or writ or SLP for an
                     assessment year. For one pending appeal, all the issues are required to
                     be settled and if anyone of the issues makes the declaration invalid, no
                     declaration can be filed.

Qnestion No.   12.   If a writ has been .filed against a notice issued under section 148 of the
                     Act and no assessment order has been passed consequent to that
                     section 148 notice, will such case be eligible to .file declaration under
                     Vivad se Vishwas?

Answer:              The assessee would not be eligible for Vivad se Vishwas as there is no
                     detennination of income against the said notice.

Question No.   13.   With respect to interest under section 234A, 234B or 234C, there is no
                     appeal but the assessee has filed waiver application before the
                     competent authority which is pending as on 31 Jan 2020? Will such
                     cases be covered under Vivad se Vishwas?

Answer:              No, such cases are not covered. Waiver applications are not appeal
                     within the meaning of Vivad se Vishwas.

Question No.   14.   Whether assessee can avail of the Vivad se Vishwas for some of the
                     issues and not accept other issues?


Answer:              Refer to answer to question no 11. Picking and choosing issues for
                     settlement of an appeal is not allowed. With respect to one order, the
                     appellant must chose to settle all issues and then only he would be
                     eligible to file declaration.

Question No.   15.   Will delay in deposit of TDSITCS be also covered under Vivad se
                     Vishwas?

Answer:              The disputed tax includes tax related to tax deducted at source (TDS)
                     and tax collection at source (TCS) which are disputed and pending in
                     appeal. However, if there is no dispute related to TDS or TCS and there
                     is delay in depositing such TDS/TCS, then the dispute pending in appeal
                     related to interest levied due to such delay will be covered under Vivad
                     se Vishwas.
Questiou No.   16. Are cases pending before DRP covered? What if the assessee has not
                   .filed objections with DRP and the AO has not yet passed the final
                    order?

Answer:              Yes, a person who has filed his objections before the DRP under section
                     144C of the Act and the DRP has not issued any direction on or before
                     the specified date as well as a person in whose case the DRP has issued
                     directions but the AO has not passed the final assessment order on or
                     before the specified date, is eligible under Vivad se Vishwas.

                     It is further clarified that there could be a situation where the AO has
                     passed a draft assessment order before the specified date. Assessee
                     decides not to file objection with the DRP and is waiting for final order
                     to be passed by the AO against which he can file appeal with
                     Commissioner(Appeals). In this situation even if the final assessment
                     order is not passed on or before the specified date, the assessee would
                     be considered as the appellant and would be eligible to settle his dispute
                     under Vivad se Vishwas. Disputed tax in such case would be computed
                     based on the draft order. In the declaration form, the appellant in this
                     situation should indicate that time to file objection with DRP has not
                     expired.

Question No.   17. If CIT(Appeals) has given an enhancement notice, can the appellant
                   avail the Vivad se Vishwas after including proposed enhanced income
                   in the total assessed income?

Answer:              Tbe amendment proposed in the Vivad se Vishwas allows the
                     declaration even in cases where CIT (Appeals) has issued enhancement
                     noticc on or before 31 ,t January, 2020. 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.

Qnestion No.   18. Are disputes relating to wealth tax, security transaction tax,
                   commodity transaction tax and equalisation levy covered?

Answer:              No. Only disputes relating to income-tax are covered.

Question No    19.   The assessment order under section 143(3) of the Act was passed in
                     the case of an assessee for the assessment year 2015-16. The said
                     assessment order is pending with ITAT. Subsequently another order
                     under section 147/143(3) was passedfor the same assessment year and
                     that is pending with CIT (Appeals)? Could both or one of the orders
                     be settled under Vivad se Vishwas?

Answer:              The appellant in this case has an option to settle either of the two
                     appeals or both appeals for the same assessment year. If he decides to
                     settle both appeals then he has to file only one declaration fonn. The
                     disputed tax in this case would be the aggregate amount of disputed tax
                     in both appeals.

Question No.   20.   In a case there is no disputed tax. However, there is appeal for
                     disputed penalty which has been disposed off by CIT (Appeals) on 5th
                     January 2020. Time to file appeal in ITAT ugainst the order of
                     Commissioner(Appeals) is still available but the appeal has not yet
                     been filed. Will such case be eligible to avail the benefit?

Answer:              Yes, the appellant in this case would also be eligible to avail the benefit
                     of Vivad se Vishwas. In this case, the tenns of availing Vivad se
                     Vishwas in case of disputed penaltylinterest/fee are similar to tenns in
                     case of disputed tax. Thus, if the time to file appeal has not expired as
                     on specified date, the appellant is eligible to avail benefit of Vivad se
                     Vishwas. In this case the appellant should indicate in the declaration
                     fonn that time limit to file appeal in ITAT has not expired.

Question No.   21.   In a case ITAT has quashed the assessment order based on lack Of
                     jurisdiction by the AO. The department has filed an appeal in HC
                     which is pending. Is the assessee eligible to settle this dispute under
                      Vivad se Vishwas and if yes how disputed tax be calculated as there is
                     no assessment order?

Answer:              The assessee in this case is eligible to settle the department appeal in
                     HC. The amount payable shall be calculated at half rate of 100%,110%,
                     125% or 135%, as the case may be, on the disputed tax that would be
                     restored if the department was to win the appeal in HC.

Question no    22.   In the case of an assessee prosecution has been instituted and is
                     pending in court. Is assessee eligible for the Vivad se Vishwas?

Answer:               No. However, where only notice for initiation of prosecution has been
                     issued with reference to tax arrears, the taxpayer has a choice to
                     compound the offence and opt for Vivad se Vishwas.

Question no    23.   If the due date of filing appeal is after 31.1.2020 the appeal has not
                     been filed, will such case be eligible for Vivad se Vishwas?

Answer:              Yes

Qnestion no    24.   If appeal is .filed before High Court and is pending for admission as
                     on 31.1.2020, whether the case is eligible for Vivad se Vishwas?

Answer:
                     Yes




"QUESTIONS RELATED TO CALCULATION (Q. No. 25-40)"

Question No.   25.   In a case appeal or arbitration is pending on the spec(fied date, but a
                     rect(fication is also pending with the A 0 which if accepted will reduce
                     the total assessed income. Will the calculation of disputed tax be
                     calculated on rect!fied total assessed income?

Answer:               The rectification order passed by the AO may have an impact on
                      detennination of disputed tax, if there is reduction or increase in the
                      income and tax liability of the assessee as a result of rectification. The
                      disputed tax in such cases would be calculated after giving effect to the
                      rectification order passed, if any.

Question No.   26.   Refer to question number 5. How will disputed tux be calculated in a
                     case where disputed demand including interest has been paid by the
                     assessee while being in appeal?


Answer:              Please refer to answer to question no. 5. To illustrate, consider a non-
                     search     case    where     an    assessee   is   In    appeal before
                     COlmnissioner(Appeals). The tax on returned income (including
                     surcharge and cess) comes to Rs. 30,000 and interest under section
                     234B of Rs.1,OOO. Assessee has paid this amount of Rs. 31,000 at the
                     time of filing his tax return. During assessment an addition is made and
                     additional demand of Rs. 16,000 has been raised, which comprises of
                     disputed tax (including surcharge and cess) ofRs. 10,000 and interest on
                     such disputed tax of Rs.6000. Penalty has been initiated separately.
                     Assessee has paid the demand of Rs. 14,000 during pendency of appeal;
                     however interest under section 220 of the Act is yet to be calculated.
                     Assessee files a declaration, which is accepted and certificate is issued
                     by the designated authority (DA). The disputed tax of Rs 10,000 (at
                     100%) is to be paid on or before 31" March 2020. Since he has already
                     paid Rs. 14,000, he would be entitled to refund of Rs. 4,000 (without
                     section 244A interest). Further, the interest leviable under section 220
                     and penalty leviable shall also be waived.

Question No.   27.   Refer to question no 7. How will disputed tax be computed in a case
                     where assessment has been set aside for giving proper opportunity to
                     an assessee on the additions carried out by the AO?
                     Please refer to answer to question no. 7. To illustrate, return of income
Answer:              was filed by the asseSSee. The tax on returned income was Rs 10,000
                     and interest was Rs 1,000. The amount of Rs 11,000 was paid before
                     filing the return. The AO made two additions of Rs 20,000/- and Rs
                     30,000/-. The tax (including surcharge and cess) on this comes to Rs
                     6,240/- and Rs 9,3601- and interest comes toRs.2,500 and Rs.3,500
                     respectively. Commissioner(Appeals) has confirmed the two additions.
                     ITAT confirmed the first addition (Rs 20,000/-) and set aside the second
                     addition (Rs 30,000/-) to the file of AO for verification with a specific
                     direction. Assessee appeals against the order of IT AT with respect to
                     first addition (or has not filed appeal as time limit to file appeal against
                     the order has not expired). The assessee can avail the Vivad se Vishwas
                     if declaration covers both the additions. In this case the disputed tax
                     would be the sum of disputed tax on both the additions i.e. Rs. 6240/-
                     plus Rs. 9,360/-.

                     In such cases while filling the declaration fonn, appellant can indicate
                     that with respect to the set-aside issues the appeal is pending with the
                     Commissioner(Appeals) .

Question No.   28.   What amount of tax is required to be paid, if an assessee wants to
                     avail the ben~fit of the Vivad se Vishwas?

Answer:              Under the Vivad se Vishwas, declarant is required to make following
                     payment for settling disputes:

                     A. In appeals / writ / SLP / DRP objections / revision application under
                     section 264 / arbitration filed by the assessee -

                         (a) In case payment is made till 31" March, 2020-
                              (i) 100% of the disputed tax (125% in search cases) where
                                  dispute relates to disputed tax (excess amount over 100%
                                  limited to the amount of interest and penalty levied or
                                  leviable), or
                             (ii) 25% of the disputed penalty, interest or fee where dispute
                                  relates to disputed penalty, interest or fee only.

                         (b) In case payment is made after 31 st March, 2020 -
                             (i) 110% of the disputed tax (135% in search cases) where
                                  dispute relates to disputed tax (excess amount over 100%
                                  limited to the amount of interest and penalty), or
                             (ii) 30% of the disputed penalty, interest or fee in case of
                                  dispute related to disputed penalty, interest or fee only.

                     However, if in an appeal before Commissioner(Appeals) or m
                     objections pending before DRP, there is an issue on which the appellant
                     has got favourable decision from ITAT (not reversed by HC or SC) or
                     from the High Court (not reversed by SC) in earlier years then the
                     amount payable shall be half or 50% of above amount.
                     Similarly, if in an appeal before IT AT, there is an issue on which the
                     appellant has got favourable decision from the High Court (not reversed
                     by SC) in earlier years then the amount payable shall be half or 50% of
                     above amount.

                     B. In appeals Iwrit 1SLP filed by the Department -
                          (a) In case payment is made till 31 "March, 2020-
                              (i) 50% of the disputed tax (62.5% in search cases) in case       of
                                   dispute related to disputed tax or
                              (ii) 12.5% of the disputed penalty, interest or fee in case       of
                                   dispute related to disputed penalty, interest or fee only.
                          (b) In case payment is made after 31"' March, 2020 -
                              (i) 55% of the disputed tax (67.5% in search cases) in cases      of
                                   dispute related to disputed tax, or
                              (ii) 15% of the disputed penalty, interest or fee in case         of
                                   dispute related to disputed penalty, interest or fee only.

Question No.   29.   Whether credit for earlier taxes paid against disputed tax will be
                     available against the payment to be made under Vivad se Vishwas?

Answer:              The amount payable by the declarant under Vivad se Vishwas shall be
                     detennined by the DA under clause 5. Credit for taxes paid against the
                     disputed tax before filing declaration shall be available to the declarant.
                     Please refer to example at question no. 26 above. If in that example
                     against disputed tax ofRs. 10,000 an amount ofRs. 8,000/- has already
                     been paid, the appellant would be required to pay only the remaining
                     Rs. 2,0001- by 31"' March 2020.

Question No.   30.   Where assessee settles TDS appeal or withdraws arbitration (against
                     order U/S 201) as deductor of TDS, will credit of such tax be allowed to
                     deductee?

Answer:              In such cases, the deductee shall be allowed to claim credit of taxes in
                     respect of which the deductor has availed of dispute resolution under
                     Vivad se Vishwas. However, the credit will be allowed as on the date of
                     settlement of dispute by the deductor and hence the interest as
                     applicable to deductee shall apply.

Question No.   31.   Where assessee settles TDS liability as deductor of TDS under Vivad
                     se Vishwas (i.e against order u/s 201), when will he get consequential
                     relief of expenditure allowance under proviso to section 40(a)(i)/(ia)?
Answer:
                     In such cases, the deductor shall be entitled to get consequential relief of
                     allowable expenditure under proviso to section 40(a)(i)/(ia) in the year
                     in which the tax was required to be deducted.

                     To illustrate, let us assume that there are two appeals pending; one
                     against the order under section 201 of the Act for non-deduction ofTDS
                     and another one against the order under section 143 (3) of the Act for
                     disallowance under section 40(a)(i)/(ia) of the Act. The disallowance
                     under section 40 is with respect to same issue on which order under
                     section 20 I has been issued. If the dispute is settled with respect to
                     order under section 20 I, assessee will not be required to pay any tax on
                     the issue relating to disallowance under section 40(a)(i)/(ia) of the Act,
                     in accordance with the provision of section 40(a)(i)/(ia) of the Act.

                     In case, in the order under section 143(3) there are other issues as well,
                     and the appellant wants to settle the dispute with respect to order under
                     section 143(3) as well, then the disallowance under section 40(a)(i)/(ia)
                     of the Act relating to the issue on which he has already settled liability
                     under section 201 would be ignored for calculating disputed tax.

                     If the assessee has challenged the order under section 20 I on merits and
                     has won in the Supreme Court or the order of any appellate authority
                     below Supreme Court on this issue in favour of the assessee has not
                     been challenged by the Department on merit (not because appeal was
                     not filed on account of monetary limit for filing of appeal as per
                     applicable CEDT circular), then in a case where disallowance under
                     section 40(a)(i)/(ia) of the Act is in consequence of such order under
                     section 20 I and is part of disputed income as per order under section
                     143(3) in his case, such disallowance would be ignored for calculating
                     disputed tax, in accordance with the proviso to section 40(a)(i)/(ia) of
                     the Act.

                     It is clarified that if the assessee has made payment against the addition
                     representing section 40(a)(i)/(ia) disallowance, the assessee shall not be
                     entitled to interest under section 244A of the Act on amount refundable,
                     if any, under Vivad se Vis/lWas,

                     It is further clarified that if the assessee wish to settle disallowance
                     under section 40(a)(i)/(ia) in a search case on the basis of settlement of
                     the dispute under section 201, he shall be required to pay higher amount
                     as applicable for search cases for settling dispute in respect of that TDS
                     default under section 201.

Question No.   32.   When assessee settles his own appeal or arbitration under Vivad se
                     Vishwas, will consequential reli~f be available to the deductor in
                     default from liability determined under TDS order U/S 201?
Answer:
                     When an assessee (being a person receiving an income) settles his own
                     appeal or arbitration under Vivad se Vishwas and such appeal or
                     arbitration is with reference to assessment of an income which was not
                     subjected to TDS by the payer of such income (deductor in default) and
                     an order under section 201 of the Act has been passed against such
                     deductor in default, then such deductor in default would not be required
                     to pay the corresponding TDS amount. However, he would be required
                     to pay the interest under sub-section (IA) of section 201 of the Act. If
                     such levy of interest under sub-section (IA) of section 201 qualifies for
                     Vivad se Vishwas, the deductor in default can settle this dispute at 25%
                     or 30% of the disputed interest, as the case may be, by filing up the
                     relevant schedule of disputed interest.

Question No.   33.   Where DRP order passed on or after 1st July, 2012 and before lsi
                     June, 2016 have given relief to assessee and Deparlment has filed
                     appeal, how assessed tax to be calculated?

Answer:              If department appeal is required to be settled, then against that appeal
                     the appellant is required to pay only 50% of the amount that is otherwise
                     payable if it was his appeal.

Question No.   34. Appeals against assessment order and against penalty order are filed
                   separately on same issue. Hence there are separate appeals for both.
                   In such a case how dispuled tax to be calculated?

Answer:              Please see question no. 8. Further, it is clarified that if the appellant has
                     both appeal against assessment order and appeal against penalty relating
                     to same assessment pending for the same assessment year, and he
                     wishes to settle tbe appeal against assessment order (with penalty appeal
                     automatically covered), he is required to give details of both appeals in
                     one declaration fom1 for that year. However, in the annexure he is
                     required to fill only the schedule relating to disputed tax.

Questiou No.   35.   If there is substantive addition as well as protective addition in Ihe
                     case of same assessee for different assessment year, how will that be
                     covered? Similarly if there is substantive addition in case of one
                     assessee and protective addition on same issue in the case ~f another
                     assessee, how will that be covered under Vivad se Vishwas?

Auswer:              If the substantive addition is eligible to be covered under Vivad se
                     Vishwas, then on settlement of dispute related to substantive addition
                     AO shall pass rectification order deleting the protective addition relating
                     to the same issue in the case of the assessee or in the case of another
                     assessee.

Question No.   36. In a case ITAT has passed order giving relief on two issaes and
                   confirming three issues. Time to file appeal has not expired as on
                   specified date. The taxpayer wishes to file declaration for the three
                   issues which have gone against him. What about the other two issues
                   as the taxpayer is not sure if the department willfile appeal or not?

Answer:              The Vivad se Vishwas allow declaration to be filed even when time to
                     file appeal has not expired considering them to be a deemed appeal.
                     Vivad se Vishwas also envisages option to assessee to file declaration
                     for only his appeal or declaration for department appeal or declaration
                     for both. Thus, in a given situation the appellant has a choice, he can
                     onl y settle his deemed appeal on three issues, or he can settle
                     department deemed appeal on two issues or he can settle both. If he
                     decides to settle only his deemed appeal, then department would be free
                     to file appeal on the two issues (where the assessee has got relief) as per
                     the extant procedure laid down and directions issued by the CBDT.

Question No    37.   There is no provision for 50% concession in appeal pending in HC on
                     an issue where the assessee has got relief on that issue from the SC?

Answer:              If the appellant has got decision in his favour from SC on an issue, there
                     is no dispute now with regard to that issue and he need not settle that
                     issue. If that issue is part of the multiple issues, the disputed tax may be
                     calculated on other issues considering nil tax on this issue.

Question uo    38. Addition was made uls 143(3) on two issues whereas appeal.filed only
                   for one addition. Whether interest and penalty be waived for both
                   additions.

Answer:              Under Vivad se Vishwas, interest and penalty will be waived only in
                     respect of the issue which is disputed in appeal and for which
                     declaration is filed. Hence, for the undisputed issue, the tax, interest and
                     penalty shall be payable,

Question no    39.   DRP has issued directions cOl1;firming all the proposed additions in
                     the draft order and the A 0 has passed the order accordingly. The
                     issues confirmed by DRP include an issue on which the taxpayer has
                     got favourable order from ITAT (not reversed by HC or SC) in an
                     earlier year. The time limit to,file appeal in ITAT i.~ still available. The
                     taxpayer is eligible for Vivad se Vishwas treating the situation as
                     taxpayer's deemed appeal in ITAT. In this case how will disputed tax
                     be calculated? Will it be 100% on the issue allowed by ITAT in earlier
                     years or 50%?
Answer:
                     In this case, on the issue where the taxpayer has got relief from ITAT in
                     an earlier year (not reversed by He or SC) the disputed tax shall be
                     computed at half ofnonnal rate of 100%, 110%, 125% or 135%, as the
                     case maybe.

Question No.   40.   Where there are two appeals filed for an assessment year-- one by the
                     appellant and one by the tax department, whether the appellant can
                     opt for only one appeal? If yes, how would the disputed tax be
                     computed?

Answer:              The appellant has an option to opt to settle appeal filed by it or appeal
                     filed by the department or both. Declaration fonn is to be filed
                     assessment year wise i.e. only one declaration for one assessment year.
                     For different assessment years separate declarations have to be filed. So
                     the appellant needs to specify in the declaration fonn whether he wants
                     to settle his appeal, or department's appeal in his case or both for a
                     particular assessment year. The computation of tax payable would be
                     carried out accordingly.






"QUESTIONS RELATED TO PROCEDURE (Q. No. 41-50)"

Question No.   41.    How much time shall be available for paying the taxes after filing a
                      declaration under the Vivad se Vishwas?

Answer:               As per clause 5 of Vivad se Vishwas, the DA shall determine the
                      amount payable by the declarant within fifteen days from the date of
                      receipt of the declaration and grant a certificate to the declarant
                      containing particulars of the tax-arrear and the amount payable after
                      such detennination. The declarant shall pay the amount so detennined
                      within fifteen days of the date of receipt of the certificate and intimate
                      the details of such payment to the DA in the prescribed form.
                      Thereafter, the DA shall pass an order stating that the declarant has
                      paid the amount. It may be clarified that 15 days is outer limit. The
                      DAs shall be instructed to grant a certificate at an early date enabling
                      the appellant to pay the amount on or before 31 st March, 2020 so tbat
                      he can take benefit of reduced payment to settle the dispute.

Question No.   42.    If taxes are paid after availing the benefits of the Vivad se Vishwas
                      and later the taxpayer decides to take refund of these taxes paid,
                      would it be possible?

                      No. Any amount paid in pursuance of a declaration made under the
Answer:               Vivad se Vishwas sball not be refundable under any circumstauces.

Question No.   43.     Where appeals are withdrawn from the appellate forum, and the
                     declarant is declared to be ineligible under the Vivad se Vishwas by
                     DA at the stage of determination of amount payable under section
                     5(1) or, amount determined by])A is at variance of amount declared
                     by declarant and declarant is not agreeable to DA's determination of
                     amount payable, then whether the appeals are automatically
                     reinstated or a separate application needs to be filed for reinstating
                     the appeal before the appellate authorities

Answer:
                     Under the amended procedure no appeal is required to be withdrawn
                     before the grant of certificate by DA. After the grant of certificate by
                     DA under clause 5, the appellant is required to withdraw appeal or
                     writ or special leave petition pending before the appellant forum and
                     submit proof of withdrawal with intimation of payment to the DA as
                     per the same clause. Where assessee has made request for withdrawal
                     and such request is under process, proof of request made shall be
                     enclosed.
                     Similarly in case of arbitration, conciliation or mediation, proof of
                     withdrawal of arbitration/conciliation/mediation is to be enclosed
                     along with intimation of payment to the DA.

Question No.   44.   Clause 5(2) requires declarant to pay amount determined by DA
                     within 15 days of receipt of cenificate from DA. Clarification is
                     required on whether declarant is to also intimate DA about fact of
                     having made payment pursuant to declaration within the period of
                     15 days?

Answer:              As per clause 5(2), the declarant shall pay the amount detemlined
                     under clause 5(1) within fifteen days of the date of receipt of the
                     certificate and intimate the details of such payment to the DA in the
                     prescribed fonn and thereupon the DA shall pass an order stating that
                     the declarant has paid the amount.

Questiou No.   45.   Will ])A also pass order granting expressly, immunity from levy of
                     interest and penalty by the A () as well as immunity from
                     prosecution?

Answer:              As per clause 6, subject to the provisions of clause 5, the DA shall not
                     institute any proceeding in respect of an offence; or impose or levy
                     any penalty; or charge any interest under the Income-tax Act in
                     respect of tax arrears. This shall be reiterated in the order under
                     section 5(2) passed by DA.

Question No.   46.   Whether ])A can amend his order to rectify any patent errors?

Answer:              Yes, the DA shall be able to amend his order under clause 5 to rectify
                     any apparent errors.



Questiou No.   47.   Where tax determined by DA is not acceptable can appeal be filed
                     against the order of designated authority before [TAT, Iligh Court
                     or Supreme Court?

Auswer:              No. As per clause 4(7), no appellate forum or arbitrator, conciliator or
                     mediator shall proceed to decide any issue relating to the tax arrears
                     mentioned in the declaration in respect of which order is passed by the
                     DA or the payment of sum determined by the DA.
Questiou No    48.   There is no provision for withdrawal of appeallwrillSLP by the
                     department on settlement of dispute

Answer:              On intimation of payment to the DA by the appellant pertaining to
                     department appealiwrit/SLP, the department shall withdraw such
                     appealiwrit/SLP.

Question no    49.   Once declaration is filed under Vivad se Vishwas, and for financial
                     difficulties, payment is not made accordingly, will the declaration be
                     null and void?

Answer:              Yes it would be void.

Question no    50.    Where the demand in case of an assessee has been reduced partly or
                     fully by giving appeal effect to the order of appellate forum, how
                      would the umount payable under Vivad se Vishwas be adjusted?

Answer:              In such cases, after getting the proof of payment of the amount
                     payable under Vivad se Vishwas, tbe AO shall pass order under the
                     relevant provisions of Vivad se Vish was to create demand in case of
                     assessee against which the amOlUlt payable shall be adjusted.
                     }

"QUESTIONS RELATED TO CONSEQUENCES (Q. No. 51-55)"

Question No.   51.   Will/here be immunity from prosecution?

Answer:              Yes, clause 6 provides for immunity from prosecution to a declarant in
                     relation to a tax arrears for which declaration is filed under Vivad se
                     Vishwas and in whose case an order is passed by the DA that the
                     amount payable under Vivad se Vishwas has been paid by the
                     declarant.



Question No.   52.   Will the result of this Vivad se Vishwas be applied /0 ,mme issues
                     pending before AO?

Answer:              No, only the issues covered in the declaration are settled in the dispute
                     without any prejudice to same issues pending in other cases. It has
                     been clarified that malcing a declaration under this Act shall not
                     amount to conceding the tax position and it shall not be lawful for the
                     income-tax authority or the declarant being a part in appeal or writ or
                     in SLP to contend that the declarant or the income-tax authority, as the
                     case may be, has acquiesced in the decision on the disputed issue by
                     settling the dispute.

Question No.   53.   If loss is not allowed to be adjusted while calculating disputed tax,
                     will that loss be allowed to be carriedforward?

Answer:              As per the amendment proposed in Vivad se Vishwas, in a case where
                     the dispute in relation to an assessment year relates to reduction of
                     Minimum Alternate Tax (MAT) credit or reduction of loss or
                     depreciation, the appellant shall have an option either to (i) include the
                     amount of tax related to such MAT credit or loss or depreciation in the
                     amount of disputed tax and carry forward the MAT credit or loss or
                     deprecation or (ii) to carry forward the reduced tax credit or loss or
                     depreciation. CBDT will prescribe the manner of calculation in such
                     cases.

Question No.   54.   If the taxpayer avails Vivad se Vishwas for Transfer Pricing
                     adjustment, will provisions of section 92CE of the Act apply
                     separately?

Answer:              Yes, secondary adjustment under section 92CE will be applicable.
                     However, it may bc noted that the provision of secondary adjustment
                     as contained in section 92CE of the Act is not applicable for primary
                     adjustment made in respect of an assessment year commencing on or
                     before the l"t day of April 2016. That means, if there is any primary
                     adjustment for assessment year 2016-17 or earlier assessment year, it
                     is not subjected to secondary adjustment under section nCE of the
                     Act.

Question No.   55.   The appellant has settled the dispute under Vivad se Vishwas in an
                     assessment year. Whether it is open for Revenue to take a stand that
                     the additions have been accepted by the appellant and hence he
                     cannot dispute it in future assessment years?

Auswer               Please refer answer to question no 52. It has been clarified in
                     Explanation to clause 5 that making a declaration under Vivad se
                     Vishwas shall not amount to conceding the tax position and it shall not
                                          be lawful for the income-tax authority or the declarant being a part in
                                          appeal or writ or in SLP to contend that the declarant or the income-
                                          tax authority, as the case may be, has acquiesced in the decision on the
                                          disputed issue by settling the dispute.



                                                                                                               ~
                                                                                                              (Ankur Goyal)
                                                                                        Under Secretary to the Govt. of India



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