The Central Board of Direct Taxes (CBDT) notified the clarification on provisions of Direct Tax Vivad se Vishwas Act, 2020.
The objective of the Scheme is to 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.
The Board clarified that the amount payable under Vivad se Vishwas shall be computed with reference to the position of appeal or arbitration as on 31 January, 2020.
The Vivad se Vishwas can be availed in a case where the enforceability of an assessment order passed by the AO has been stayed by the High Court or Supreme Court whether or not the appeal has been filed against the assessment order. Writ/ Appeal pending in High Court and Supreme Court shall be required to be withdrawn by the taxpayer. Upon settlement of quantum appeal, interest and penalty, if any, will be waived.
If order under section 263 of the Act contains general directions and income is not quantifiable, appeal against such order is not eligible under Vivad se Vishwas. However, if order under section 263 of the Act contains only specific directions and income is quantifiable and does not contain any general directions due to which income is not quantifiable), appeal against such order is eligible under Vivad se Vishwas.
In such case, assessee is required to settle all the issues in the order, which are subject matter of order under section 263 of the Act as well as issues pending in appeal (or issues in respect of which time to file appeal has not expired on 31″ Jan 2020), if any, with reference to the said order.
If the time limit for filing an appeal expired during the period from 14 April 2019 to 31″ Jan, 2020 (both dates included in the period), and the application for condonation is filed before the date of issue of this circular, and appeal is admitted by the appellate authority before the date of filing of the declaration, such appeal will be deemed to be pending as on 31 Jan 2020. In order to facilitate the taxpayers, the Board had vide circular no. 9/2020 dated 22 April, 2020 issued clarifications in form of answers to 55 frequently asked questions (FAQs) on issues related to eligibility, computation of amount payable, procedure and consequences under Vivad se Vishwas. Several representations have been received thereafter seeking further relaxation and clarifications with respect to such issues. Some of these representations have already been addressed through the aforesaid notification dated 27th October, 2020 and circular dated 28h October, 2020.
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