Vivaad Se vishwas scheme has been introduced by Government of India to provide one time opportunity for settlement of pending litigation by paying the basic tax amount and complete waiver of interest and penalty.

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SNR - Income Tax Alert
Income Tax / 2019-20/06
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The Honourable Finance Minister, realizing that, over the years, the pendency of appeals filed by taxpayers as
well as Income Tax department has increased, proposed the promulgation of ‘Vivad se Vishwas Scheme’ in
the Union Budget 2020. In continuation of the same, ‘The Direct Tax Vivad se Vishwas Bill, 2020’ has been
introduced in Lok Sabha for settlement/ closure of pending taxdisputes. A hugeamountofdisputed tax arrears
is locked-up in these appeals. As per the government data, as on the 30th November 2019, the amount of
disputed direct tax arrears is Rs. 9.32 lakh crores. Considering that the actual direct tax collection in the
financial year 2018-19 was Rs.11.37 lakh crores, the disputed tax arrears constitute nearly one year’s direct
tax collection. The Government of India, accepts that tax disputes consume large amount of time, energy and
resources both on the part of the Government as well as taxpayers, therefore, such a scheme will not only
benefit the Government by generating timely revenue but also the taxpayers who will be able to deploy the
time, energy and resources saved by opting for such dispute resolution towards their business activities.
The important provisions of the bill are as follows:
 It shall be applicable to appeals filed by taxpayers or Government, which are pending with the
Commissioner (Appeals), Income Tax Appellate Tribunal, High Court or Supreme Court as on 31st
January
2020;
 It shall also be applicable in cases where demand has been paid. The pending appeal may be against
disputed tax, interest or penalty in relation to an assessment order or only against disputed interest or
fees, where there is no disputed tax. Theappeal may also be againsttax determined on defaults in respect
of TDS or TCS;
 The amount to be paid shall be as follows:
Particulars Paid on or before 31-03-2020 Paid on after 31-03-2020
Where appeal relates to disputed
tax
Amount of disputed tax
110% of the amount of
disputed tax
Where appeal relates to disputed
interest, penalty or fees
25% of the disputed interest,
penalty or fees
30% of the disputed interest,
penalty or fees
Procedure:
 The taxpayer shall file a declaration before the designated authority. The exact form and manner of
filing the declaration shall be prescribed;
 Upon filing the declaration, it shall be deemed that any appeal pending before CIT(A) or ITAT in the
case of the declarant has been withdrawn;
 Where an appeal is pending before the High Court or Supreme Court, the declarant shall furnish a
proof of such withdrawal along with the declaration;
 The declarant shall also furnish an undertaking waiving his right to seek or pursue any remedy or any
claim in relation to the tax demand;

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 The designated authority shall, within a period of 15 days from the date of receipt of declaration, pass
an order determining the amount payable by the declarant & grant a certificate to this effect;
 Thedeclarantshall pay theamountwithin 15 days from thedate ofreceiptof the certificate& intimate
the details of such payment to the designated authority;
 The designated authority shall pass an order stating that the declarant has paid the amount;
 Every order passed by the designated authority shall be conclusive and no such order can be reopened
under any provisions of the Income Tax Act;
Exceptions:
The provisions of this act shall not apply in following cases:
 Where tax arrear relates to any assessment u/s 153A or 153C i.e. Block Assessment in case of search
or requisition;
 Where tax arrear relates to an assessment year in respect of which prosecution has been instituted
on or before filing of declaration;
 Where tax arrear relates to any undisclosed income or an asset from a source outside India;
 Where tax arrear relates to an assessment made on the basis of information received under an
agreement made u/s 90 or 90A i.e. agreement with foreign countries or specified territories to check
tax avoidance & exchange of information;
 Where tax arrear relates to an appeal before CIT(Appeals) in respect of which notice of enhancement
u/s 251 has been issued on or before the specified date. CIT(Appeals) has powers to increase the total
income or reduce the loss of the assessee beyond the levels at which computed by the assessing
officer;
 On any person in respect of whom an order of detention has been made under the provisions of the
Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974
Central Board ofDirectTaxes (CBDT)Chairman P CMody whilespeaking atan Assocham (Associated Chambers
of Commerce of India) post-budget interaction said, “I feel this is a fair deal and I would urge people to rethink
about the pending issues and come forward and avail of the scheme.”
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