The Central Board of Direct Taxes (CBDT) clarified that the calculation of Disputed Tax in a case where disputed demand including interest has been paid by the assessee while being in appeal.
The Direct Tax Vivad se Vishwas Bill, 2020 was introduced in Lok Sabha by the Minister of Finance, Ms. Nirmala Sitharaman, on February 5, 2020. The Bill provides a mechanism for resolution of pending tax disputes related to income tax and corporation tax.
The CBDT said that the appeals in which the appellant has already paid the disputed demand either partly or fully are also covered. If the amount of tax paid is more than the amount payable under Vivad se Vishwas, the appellant will be entitled to refund without interest under section 244A of the Act.
While considering a non-search case where an assessee is In appeal before Commissioner(Appeals). The tax on returned income (including surcharge and cess) comes to Rs. 30,000 and interest under section 234B of Rs.1,000. The assessee has paid this amount of Rs. 31,000 at the time of filing his tax return.
During an assessment, an addition is made and additional demand of Rs. 16,000 has been raised, which comprises of disputed tax (including surcharge and cess) of Rs. 10,000 and interest on such a disputed tax of Rs.6000. The penalty has been initiated separately. The assessee has paid the demand of Rs. 14,000 during the pendency of the appeal; however interest under section 220 of the Act is yet to be calculated.
The Assessee filed a declaration, which is accepted and the 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 a refund of Rs. 4,000 (without section 244A interest). Further, the interest leviable under section 220 and penalty leviable shall also be waived.
