Vivad se vishwas scheme

1. Compiled By;
Direct Tax Vertical
ASIJA AND ASSOCIATES LLP
Chartered Accountants
34/5, Gokhle Marg, Lucknow, India
THE DIRECT TAX
VIVAD SE VISHWAS ACT, 2020
“An Act to provide for resolution of disputed tax and
for matters connected therewith or incidental thereto”
AS INTRODUCED IN UNION BUDGET, 2020
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2. INTRODUCTION
MEASURE TO REDUCE PENDING LITIGATION
• Encouraged by the success of the Indirect Tax Sabka
Vishwas (Legacy Dispute Resolution) Scheme,
Budget 2020 had proposed a new Direct Tax amnesty
scheme, ‘Vivad Se Vishwas’, with a view to reduce
litigation under Direct Tax.
• Accordingly, after the ascent of President on 17/03/20
The Direct Tax Vivad Se Vishwas Act, 2020 has been
enacted by Parliament.
FAST FACTS
Number of direct tax
cases pending in
various appellate
forums: 483,000
Amount locked up in
direct tax disputes as
on 30/11/2019:
INR 9.32 lakh Crore
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3. COVERAGE OF THE SCHEME
The scheme can be opted by an ‘appellant’:-
a) In whose case an appeal/writ petition/SLP is pending as on 31/01/2020, before the appellate
forum.
b) In whose case, an order in an appeal /writ petition has been passed by the A.O./ appellate forum
on or before 31/01/2020 and the time for filing appeal/SLP against such order has not
expired.
c) Objection filed by the appellant is pending before the DRP u/s 144C of the Income-tax Act as
on the 31/01/2020 and DRP has not issued direction on or before 31/01/2020.
d) In whose case the DRP has issued direction u/s 144C(5) of the Income-tax Act and the A.O. has
not passed any order on or before 31/01/2020.
e) Where an application for revision u/s 264 of the Income-tax Act is pending on 31/01/2020
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4. Nature of tax arrear
Amount
Payable by 31
March 2020
Amount payable from 1 April
2020 but on or before the last
date of the Scheme *
1.Tax arrears, is the aggregate of :
 amount of disputed tax
 interest chargeable or charged thereon
 penalty leviable or levied thereon
100% of
disputed tax
100% of disputed tax
+ 10%* of disputed tax
2. Tax arrears includes:-
 Amount of disputed tax
 Interest
 Penalty
as determined in any assessment on the basis
of search u/s 132/ 132(A) of IT Act, 1961.
100% of disputed tax
+ 25%* of disputed tax
100% of the disputed tax
+ 35%* of disputed tax.
3. Tax arrear relates to disputed interest or
disputed penalty or disputed fee.
25% of disputed
Amount
30% of disputed
Amount
* Where 10%/25%/35% exceeds aggregate of interest chargeable or charged and penalty amount on such disputed tax, the
excess shall be ignored for the purpose of computation of amount payable.
AMOUNT PAYABLE UNDER THE SCHEME
* As per the press release issued by Finance Ministry on 24/03/2020. The Said scheme has been extended from
31/03/2020 to 30/06/2020, thus the additional payment of 10% after 31/03/2020 is waved off – However Offical
Notification with respect to the same is awaited

5.  In a case where an appeal / writ petition/ SLP is filed by the Income-tax authority on
any issue before the appellate forum,
the amount payable shall be ½ of the amount in the Table above calculated on such
issue, in such manner as may be prescribed
 In a case where an appeal is filed before the Commissioner (Appeals), or objections is filed
before the DRP by the appellant, on any issue on which he has already got a decision in his
favour from the ITAT (not reversed by the HC /SC) or the HC (not reversed by the SC),
the amount payable shall be ½ of the amount in the Table above calculated on such
issue, in such manner as may be prescribed.
AMOUNT PAYABLE UNDER THE SCHEME
 In a case where an appeal is filed by the appellant on any issue before the ITAT on which
he has already got a decision in his favour from the HC (not reversed by the SC),
the amount payable shall be ½ of the amount in the Table above calculated on such
issue, in such manner as may be prescribed
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6. • Where any appeal /writ petition / SLP is pending before the appellate forum as on 31/01/2020,
the amount of tax payable if such appeal/petition was decided against him.
• Where an order in an appeal /writ petition has been passed by the appellate forum on or before
31/01/2020 and the time for filing appeal/petition against such order has not expired, the
amount of tax payable by the appellant after giving effect to the order so passed;
• Where the order has been passed by the A.O. on or before the 31/01/2020, and the time for
filing appeal against such order has not expired, the amount of tax payable by the appellant
in accordance with such order;
• Where objection filed by the appellant is pending before the DRP u/s 144C of the Income-tax
Act as on the 31/01/2020, the amount of tax payable by the appellant if the Dispute
Resolution Panel (DRP) was to confirm the variation proposed in the draft order
• Where an application for revision u/s 264 of the Income-tax Act is pending as on 31/01/2020,
the amount of tax payable by the appellant if such application for revision was not to be
accepted
COMPUTATION OF DISPUTED TAX
It means the INCOME TAX + SURCHARGE +CESS payable by the appellant as
computed under :-
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7. • Where the DRP has issued direction u/s 144C(5) of the Income-tax Act and the A.O. has not
passed any order under subsection (13) on or before 31/01/2020, the amount of tax payable
by the appellant as per the assessment order to be passed by the Assessing Officer under
sub-section (13) thereof.
 Provided that in a case where CIT(A) has issued notice of enhancement u/s 251 of the Income-
tax Act on or before 31/01/2020, the disputed tax shall be increased by the amount of tax
pertaining to issues for which notice of enhancement has been issued
 Provided further that in a case where the dispute relates to reduction of tax credit u/s115JAA or
115D of the Income-tax Act or any loss or depreciation computed thereunder, the appellant shall
have an option either to include the amount of tax related to such tax credit or loss or
depreciation in the amount of disputed tax, or to carry forward the reduced tax credit or loss or
depreciation.
COMPUTATION OF DISPUTED TAX
It means the INCOME TAX + SURCHARGE +CESS payable by the appellant as
computed under :-
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8. Disputed Penalty Means :-
Penalty determined in any case
under the Income Tax Act where:
Such penalty is not levied or
leviable in respect of disputed
income or disputed tax;
An appeal has been filed in
respect of the such penalty.
Disputed Interest Means :-
Interest determined in any case
under the Income Tax Act
where:
 Such interest is either not
charged or chargeable on
disputed tax;
 An appeal has been filed in
respect of such interest.
COMPUTATION OF DISPUTED PENALTY
AND DISPUTED INTEREST
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9. PROCEDURALASPECT
a) Step 1 – The declarant shall be required to e-file, on or before the last date, on the portal of
Income Tax Department, a declaration to the designated authority in Form-1 with respect of
Tax Arrear for which he opts this Scheme.
b) Step 2 - The declarants are further required to e-furnish an undertaking in e-Form-2 , waiving
his right, to seek any remedy or any claim in relation to the tax arrear which may otherwise be
available to him under any law for the time being in force
• The submission of Form-1 and Form-2 shall be done in conjunction as a single submission
and shall be furnished electronically with digital signature, if the return of income is required
to be furnished under digital signature or, in other cases through electronic verification code.
c) Step – 3 - The designated authority shall, within a period of 15 days from the date of receipt of
the declaration, by order, determine the amount payable by the declarant and grant a certificate
in e-Form 3 to the declarant containing the amount payable.
d) Step – 4 – File application before the “appellate forum” for withdrawal of appeal, where the
declarant has filed any appeal or any writ petition before the said appellate forum.
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10. PROCEDURALASPECT
f) Step - 5 - Where the declarant has initiated any proceeding for arbitration, conciliation or
mediation, or has given any notice thereof under any law for the time being in force or under
any agreement entered into by India with any other country or territory outside India whether
for protection of investment or otherwise, he shall file to withdraw the claim
g) Step – 5 - The declarant shall pay the amount as specified in Form 3 within 15 days of the
date of receipt of the said certificate (Form 3) and
 Intimate the details of such payment to the designated authority in e-Form 4 and
 Furnish the evidence of filing of withdrawal as mentioned in Step 4 & 5.
e) Step - 6 - Thereupon the designated authority shall pass an order, in e-Form 5, stating that the
declarant has paid the amount.
f) Step – 7 – Obtain from the Appellant Forum, order with respect to withdrawal of appeal or
writ or withdrawal of claim as mentioned in Step 4 & Step 5
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11. RESULT OF FILING THE FORMS
a) Waver of Right - By Furnishing e-Form 2, the declarant shall wave his right, to seek or pursue any
remedy or any claim in relation to the tax arrear which may otherwise be available to him under any law
for the time being in force, in equity, under statute or under any agreement entered into by India with any
country or territory outside India whether for protection of investment or otherwise .
b) Deemed Withdrawal - Any appeal pending before the ITAT or Commissioner (Appeals), in respect of the
disputed income /interest /penalty /fee / tax arrear shall be deemed to have been withdrawn from the
date certificate in e-Form 3 is issued by the designated authority.
c) Order shall be Conclusive - Every order passed through e-Form 3, determining the amount payable
under this Act, shall be conclusive as to the matters stated therein and no matter covered by such order
shall be reopened in any other proceeding under the Income-tax Act or under any other law or under any
agreement, whether for protection of investment or otherwise, entered into by India with any other country
or territory outside India.
d) Immunity Given - After issuance of the order in e-Form 5 the designated authority 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 arrear.
e) No Other Immunity - Save as otherwise expressly provided above, nothing contained in this Act shall be
construed as conferring any benefit, concession or immunity on the declarant in any proceedings other
than those in relation to which the declaration has been made.

12. DECLARATION TO BE NON-EST
 The declaration made through e-Form 1 shall be presumed never to have been made if,—
a) any material particular furnished in the declaration is found to be false at any stage;
b) the declarant violates any of the conditions referred to in this Act;
c) the declarant acts in any manner which is not in accordance with the undertaking given by
him through e-Form 5,
and in such cases, all the proceedings and claims which were withdrawn under section 4 and
all the consequences under the Income-tax Act against the declarant shall be deemed to have
been revived.
 Any amount paid in pursuance of a declaration made through Form 1 & 2 shall not be
refundable under any circumstances.
Note:- Where the declarant had, before filing the declaration through-Form 1, has paid
any amount under the Income-tax Act in respect of his tax arrear, which exceeds the
amount payable as per certificate issued through e-Form 3, then he shall be entitled to a
refund of such excess amount, but shall not be entitled to interest on such excess amount
under section 244A of the Income Tax Act 1961.
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13. CASES WHERE THE SCHEME IS NOT APPLICABLE
It is proposed that the Scheme shall not be available in respect of :
• Tax arrears relating :-
a) To an assessment year in respect of which an assessment has been made u/s 143(3)/
144/ 153A/153C of the Income-tax Act on the basis of search initiated u/s132 or
132A of the Income-tax Act, if the amount of disputed tax exceeds 5 crore rupees;
b) Assessment Year (AY) in respect of which prosecution has been instituted on or before
the date of filing of declaration under this Scheme
c) Any undisclosed income from a source located outside India or undisclosed asset
located outside India
d) An assessment or reassessment made on the basis of information received under any
Tax Treaty as per section 90or 90A of the Income Tax Act, 1961.
EXCLUSION FROM THE SCHEME
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14. PERSONS WHO CANNOT AVAIL THE SCHEME
It is proposed that the Scheme cannot be availed by the following persons:
• Person in respect of whom an order of detention has been made under Conservation of Foreign
Exchange and Prevention of Smuggling Activities Act, 1974 on or before the filing of declaration
[subject to certain conditions].
• Person in respect of whom prosecution for any offence punishable under the provisions of the
Unlawful Activities (Prevention) Act, 1967, the Narcotic Drugs and Psychotropic Substances Act, 1985,
the Prevention of Corruption Act, 1988, the Prevention of Money Laundering Act, 2002, the
Prohibition of Benami Property Transactions Act, 1988 has been instituted on or before the filing
of the declaration or such person has been convicted of any such offence punishable under any of
those Acts;
• Person in respect of whom prosecution has been initiated by an Income-tax authority for any
offence punishable under the provisions of the Indian Penal Code or for the purpose of enforcement of
any civil liability under any law for the time being in force, on or before the filing of the declaration or
such person has been convicted of any such offence consequent to the prosecution initiated by an
Income Tax authority
• Person in respect of whom prosecution for any offence punishable under the Indian Penal Code, the
Person notified under section 3 of the Special Court (Trial of Offences Relating to Transactions in
Securities) Act, 1992 on or before the filing of declaration.
EXCLUSION FROM THE SCHEME

15. CONCLUSION
 It is an excellent scheme brought by Government for settling the long and pending dispute.
 On should weigh the merit of his case, order if any granted in his favor by previous appellant
authorities, forum till which his case might be litigated by the Tax Department, cost of
litigation ahead.
 Cost Burden, specially with respect to Interest payable on conclusion of the said case, if the
case goes against the appellant.
 The Impact of the same should be weighed with the probability of winning this litigation till
last Forum.
 Thus Consultant your council / Tax Advisor and explore the option of this scheme.
 If you find the option of going for the said Scheme then get the compliance done with all due
care at the earliest and Burry the Axe of Litigation for once and for all.
 If Your case is strong, we suggest that you could opt to continue with the litigation and get
the said case in your favor and save every money which the Tax Department has raised
through the said fictious order.

16. For a detailed discussion and professional advisory pertaining to the
applicability and compliance of the said provision of law by your entity
Fix an Appointment with our Direct Tax Vertical
Email @ incometax@asija.in
Contact Team Members of Direct Tax Vertical
Adv. Aman Khan CA. Akash Agarwal
Associate. Director Associate. Director
CA Vasudha Jain CA Ashish Kapoor
Director Partner In Charge
(vasudha.jain@asija.in) (ashish.kapoor@asija.in)
incometax@asija.inDirect Tax Vertical – Asija & Associates LLP

17. DISCLAIMER
Direct Tax Vertical – Asija & Associates LLP incometax@asija.in
 This document has been prepared by us to provide some key highlights of the Vivad
se Vishwas Act, 2020.
 For detailed insight and for better understanding, the said document should be read
along with Vivad se Vishwas Act, 2020 and related provisions of the same.
 The analysis and views contained in this presentation are personal in nature, are
meant only for information and do not constitute a professional advise to act.
Neither our firm nor any partner or employee or article of our firm shall responsible
for any decision taken on the basis of the said presentation and without obtaining
our professional guidance or consultation on the matter for which reliance was made
on this presentation.

18. THANK
YOU
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