The Direct Tax Vivad se Vishwas Rules, 2020 ('the Rules') have been notified. The Rules inter alia laid down the procedure and the forms, which need to be filled in. Further, along with detailed instructions for taxpayers to file the declaration and the undertaking; e-filing utility has also been enabled.

1. VIVAD SE VISHWAS
SCHEME’ 2020
Finance Bill 2020

2. SILENT FEATURES OF THE SCHEME
 FAQ is silent on the coverage of genuine delay in filing of appeal which is
pending for condonation whether it should be covered considering the object of
the scheme.
 FAQ is silent on the coverage of miscellaneous application filed against order of
tribunal.
 What still remains out of the ambit is cases pending before the AAR and
settlement commission?
 Disputed tax Rs.5 Crore is considered for search and seizure cases . However
if disputed amount is less and tax itself is Rs.5 Crore then such cases are not
covered.

3.  If we analyze the provisions of bill, we will appreciate the fact that the
scheme will be opted only if tax, interest, penalty is disputed. There might
be the cases where orders have been passed by income tax authorities,
but the concern of aggrieved party is other than tax matters.
Some of the example are as follows –
 Order to cancel the registration of charitable trusts.
 Order for refusal of 80G registration to a charitable trust.
 Order of Refusal to grant stay of demand
SILENT FEATURES OF THE SCHEME

4. SCOPE & ELIGIBILITY

5. SCOPE & ELIGIBILITY
Appeals covered VVD
 Appeals pending before CIT(A), ITAT, High Court & Supreme Court
 Writ petitions pending before High Court or Supreme Court
 Special Leave petitions (SLPs) pending before Supreme Court
 Cases where the order has been passed but time limit for filing appeal is not expired as
on the specified date
 Cases where objections filed before DRP and pending with DRP
 DRP has given the directions but the final assessment order yet to be passed
 Cases where revision application U/s 264 is pending before Pr.CIT or CIT
 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 (either in India or abroad)

6. SCOPE & ELIGIBILITY
 Where case is pending in arbitration which is eligible to apply for settlement even
no appeal is pending
 Writ petitions pending before High Court against AAR Order in which total income
has determined
 Where assessment has been set aside for giving opportunity/to carry fresh
assessment (only the issues covered for set aside)
 Cases pending before DRP & DRP issued the order but Assessing Officer has not
passed the AO on or before the specified date
 Draft AO passed and assessee waiting for final order with an intention to file appeal
before CIT(A)
 Notice for prosecution has been issued with reference to the tax arrears
 Quantum appeal covering disputed tax before ITAT and appeal against penalty
before CIT(A)

7. Appeals not covered VVD
 Dispute pending before AAR
 Writ filed against a notice u/s 148 but no order has been passed consequent to the
the notice U/s 148 – as total income is not determined
 Interest U/s 234A, B & D filing application for waiving but no appeal filed
 Delay in deposing of TDS/TCS
 Disputes related to Wealth tax, security transaction tax, commodity transaction tax &
tax & equalization levy
 Prosecution has been initiated and is pending in court
SCOPE & ELIGIBILITY

8. SEARCH & SEIZURE (ASSESSMENT U/S
143(3)/144/153A/153C ON THE BASIS OF SEARCH
U/S 132/132A)
 If the amount of disputed tax exceeds Rs. 5crores – not covered under VVD
 Out of 7 assessment years in respect of search & seizure, 4 A Ys disputed tax is
5crores or less in each year & for 3 years disputed tax is exceeding 5 crores –
- for 4 years - covered under VVD
- for 3 years - not covered under VVD
Example
Year D. Tax (in VVD Year D. Tax (in VVD
1 7.5 Not covered 4 6.2 Not covered
2 2 Covered 5 1.2 Covered
3 2.5 Covered 6 .50 Covered

9. SCOPE & ELIGIBILITY
Disputes covered under VVD
 Disputed tax
 Disputed interest (even assessed tax is not disputed)
 Disputed penalty
 Disputed TDS/TCS
 Imposition of fees u/s 234E, 234F (25% or 30% of disputed fee has to be paid)
 Appeal against interest levied on late payment of TDS/TCS

10. SCOPE & ELIGIBILITY
Disputes covered under VVD
 Where CIT(A) has issued the enhancement notice on or before 31.01.2020 (the disputed tax will
be increased by tax related to enhancement)
 Appeal against penalty/interest/fee disposed by CIT(A) and time to file appeal to ITAT has not
expired as on specified date
 Where disputed demand either partly or fully paid (appellant will entitled refund without interest
U/s 244A)

11. SCOPE & ELIGIBILITY
VVD Covered in different situations
 Due date of filing of appeal is after 31.3.2020 and the appeal yet to be filed
 Appeal pending before High Court for admission as on 31.03.2020
 Department filed appeal against ITAT Order (by paying 50% of disputed tax)
 Where the appeal is pending before ITAT against 143(3). Subsequently another order under
section147/143(3) was passed for the same assessment year and that is pending before CIT(A)
.Option to select either of two or both appeals for same assessment year.

12. SCOPE & ELIGIBILITY
Other Points:
 Appellant can avail VVD irrespective of the tax arrears have been paid either partly or fully or
are outstanding
 For one pending appeal, all the issues will be covered under VVD i.e. disputed issues as well as
undisputed issues. Picking and choosing issues for settlement of an appeal is not allowed.

13. CALCULATIONS

14. TAXES REQUIRED TO BE PAID UNDER VVD
Payment made on or
before
Appeal relates to disputed tax Appeals relates only to
disputed penalty or interest or
fee
31st March 2020 100% of disputed tax (125% in search
cases)
25% of disputed penalty or
interest or fee
30th June 2020 110% of disputed tax (135% in search
cases)
30% of disputed penalty or
interest or fee
If the appeal is filed by the department – 50% of the aforesaid amounts

15. DISPUTED TAX CALCULATION
 Appeal/arbitration is pending on the specified date but rectification order passed by the AO to
increase/reduce the total assessed income and tax liability than-
- Disputed tax would be calculated after giving effect to the rectification order passed
 Credit for taxes paid against disputed taxes shall be available
Example –
 DRP Order has been passed giving relief to the assesse and department has filed appeal
- 50% of the amount has to be paid to settle the department appeal
Particulars Amount (Rs.)
Disputed tax 10,000
Less: Taxes already paid before filing declaration 8,000
Balance tax payable after declaration 2,000

16. Calculation of Disputed tax along with interest paid by the assessee while being appeal:
DISPUTED TAX CALCULATION
Particulars Amount (Rs.)
Tax at the time of filing of Return 30,000
Add: Disputed tax during assessment 10,000
Total Tax 40,000
Add: Interest U/s 234B at the time of filing of return 1,000
Disputed interest arise on disputed tax 6,000
Total tax along with interest 47,000
Less: Self assessment tax paid 31,000
Balance tax payable 16,000
Tax paid on Regular Assessment before filing appeal 14,000
The appellant is entitled to get refund on excess payment of disputed tax i.e. Disputed tax – Tax paid (10000-14,000 =
4000)
** Interest of Rs. 6000/-, interest U/s 220(2) and penalty levied will be waived.

17. Computation of disputed tax where assessment has been set aside for giving proper opportunity to an
assessee on the additions carried out by the AO:
If appellant authority set aside the additions made by AO, the
DISPUTED TAX CALCULATION
Particulars Addition 1 Addition 2
Additions made by the Assessing Officer 20,000 30000
Tax on the above additions 6,240 9360
Interest on tax 2,500 3,500
 CIT(A) confirm the two additions. ITAT confirm addition 1 & set aside addition 2 and the
assessee has time limit to file appeal on first addition against ITAT Order, the assessee can
avail VVD by covering both additions and the disputed tax is sum of both the additions (i.e.
6,240 + 9,360) and interest waive off is (2,500+3,500).

18.  Where the deductor settles TDS appeal or withdraws arbitration against order u/s
201,
-The deductee will be eligible to claim the credit of taxes in respect of such dispute
resolution under VVD as on date of settlement of dispute by the deductor and hence
DISPUTED TAX CALCULATION ON TDS ISSUES

19. SUBSTANTIVE & PROTECTIVE ADDITION -
VVD
 If substantive addition is eligible to covered under VVD,
AO shall pass rectification order deleting the protective addition on same issue in which the
settlement was done under VVD in the case of same assessee or in the case of another assessee.
RELIEF FROM SUPREME COURT - VVD
If the appellant got decision in his favour from Supreme Court on an issue, there is no dispute with
regard to that issue then assessee need not settle that issue.
If that issue is part of multiple issues, the disputed tax will be calculated on other issues considering
nil tax on this issue.

20. DEEMED APPEAL
When time to file appeal has not expired then it is considered as deemed appeal.
ASSESSEE APPEAL AND DEPARTMENTAL APPEAL FOR ANY
ASSESSMENT YEAR
Assessee having an option to file declaration –
 only for assessee’s appeal (or)
 only for departmental appeal (or)
 both

21.  DRP has issued the direction confirming the additions and AO has passed the order
accordingly. The issues confirmed by DRP include an issue on which taxpayer has got the
favorable order from ITAT in an earlier year (not reversed by High Court or Supreme
court)
- The disputed tax shall be computed at half of normal rate of 100%, 110%, 125% or 135%
 If ITAT has passed order giving relief on two issues and confirming three issues. The time
limit for filing appeal has not expired,
- Assessee have an option to file declaration either for confirming issues or both (i.e
including issues on which relief is granted)
If assessee file declaration only for confirming issues, then the department is free to file
appeal on other issues.

22. PROCEDURE

23. Time limit for paying taxes
Particulars Time Limit
Declaration of tax payable by the assessee & granting a certificate
for tax arrears & amounts payable.
Within 15 days from the date of
receipt of declaration
Time limit for payment of tax Declarant shall pay the tax within 15
days from the date of receipt of
certificate.
Note: 15 days is outer limit, the DA shall be instructed to grant a certificate at an early to enable the
declarant to pay tax on or before 31st March’ 2020.
 The appeal/arbitration/conciliation/mediation is withdrawn after granting the certificate by
DA.

24. Order passed by DA after payment of disputed taxes:
 The DA pass an order after payment of taxes stating that the declarant has paid taxes.
 The DA shall be able to amend his order to rectify if there is any apparent error
 After passing the order the AO cannot institute any proceedings in respect of offence, or impose or levy any penalty,
or charge any interest.
 Once the tax paid under VVD scheme, which shall not be refundable under any circumstances.
 No appellate forum or arbitrator, conciliator or mediator shall proceed to decide any issue relating to tax arrears
mentioned in the declaration in respect of which the order is passed by the DA or the payment of sum determined
by the DA.
 On intimation of payment to the DA by the appellant pertaining to department appeal/writ/SLP, the department
shall withdraw such appeal/writ/SLP.
 The declaration will be null and void if the tax payment was not made under any circumstances, once declaration is
filed under VVD.

25. CONSEQUENCES
 Immunity from prosecution
 Waive of interest & penalty
 Result of VVD is not applied to the same issues pending before AO or subsequent assessments.
 Secondary adjustments u/s 92CE is applicable. But if there is any primary adjustments for AY
2016-17 or earlier AY, It is not subject to secondary adjustments u/s 92CE of the act.
 Where dispute in relation to the reduction of MAT credit/reduction of loss or depreciation, the
appellant shall have an option –
Include the amount of tax related to such MAT credit or loss or depreciation; (or)
To carry forward the reduced credit or loss or depreciation.
CBDT will prescribe the manner of calculation in these cases.

26. Contact us:
S N & Co
Chartered Accountants
Mumbai & Singapore
Tel No. 022-28910968
+91-9967016999
Website: www.snco.in
Email Id: darshak@snco.in
Disclaimer: The views in this VVD presentation are personal
views of the Presenter. Further, the information contained is
of a general nature for explaining the topics and issues. The
VVD presentation is not intended to serve as an advice or
address the circumstances of any particular individual or
entity. No one should act on such / this information without
appropriate professional advice which is possible only after a
thorough examination of facts / particular situation.