CBDT issues clarifications on the provisions of the Direct Tax Vivad se Vishwas Act 2020

Last updated: 05 December 2020

The Central Board of Direct Taxes has issued a clarification on the provisions of the Direct Tax Vivad se Vishwas Act 2020 and has released the 2nd set of FAQs on the Act. Read the official announcement below:

F. No. IT(A)/1/2020-TPL,
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes ****

Circular No. 21 /2020
Dated: 4th December, 2020

Sub.: Clarifications on provisions of the Direct Tax Vivad se Vishwas Act, 2020 - reg.

With the objective to reduce 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 Direct Tax Vivad se Vishwas Act, 2020 (hereinafter referred to as Vivad se Vishwas') was enacted on 17th March, 2020. The provisions of Vivad se Vishwas were amended by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 to provide certain relaxations in view of the COVID-19 pandemic and also to empower the Central Government to notify certain dates. Towards this end, vide notification dated 27th October, 2020 the date for payment without additional amount under Vivad se Vishwas was extended from 31St December, 2020 to 31st March, 2021. The last date for filing declaration under Vivad se Vishwas was also notified as 31't December, 2020. Subsequently, the Central Board of Direct Taxes issued a circular no. 18/2020 dated 28th October, 2020 relaxing the time limit of 15 days prescribed in section 5(1) of Vivad se Vishwas for making payment of amount payable, as determined in a certificate issued by the Designated Authority.

2. In order to facilitate the taxpayers, the Board had vide circular no. 9/2020 dated 22nd 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 28th October, 2020.

3. Section 10 and 11 of the Vivad se Vishwas empowers the Board / Central Government to issue directions or orders in public interest or to remove difficulties. This circular is being issued in continuation of circular dated 22nd April, 2020 (which covered Q. no. 1 - 55) under section 10 and 11 of the Vivad se Vishwas to provide answers to 34 more FAQs (Q. no. 56 - 89). It may be noted that in the FAQs, Income Tax Act, 1961 has been referred to as the Act, Designated Authority (under Vivad se Vishwas) has been referred to as the DA, Assessing Officer has been referred to as the AO, Commissioner (Appeals) has been referred to as CIT(A), and the Income Tax Department has been referred to as the Department.

"QUESTIONS ON SCOPE/ETICIIBILITY (Q. No. 56 - 75)"

Q. No.	56.	Appeal or arbitration is pending with appellate authority as on 31st Jan 2020 or time for filing appeal has not expired as on 31st Jan 2020). However, subsequent to that date, and before filing of the declaration, the appeal has been disposed Q/ by the appellate authority. Whether it is still eligible under Vivad se Vishwas? If yes, how the amount payable under Vivad se Vishwas shall be computed?
Answer:		Yes. Amount payable under Vivad se Vishwas shall be computed with reference to the position of appeal or arbitration as on 31st January, 2020.
Q. No.	57.	Whether Vivad se Vishwas can be availed in a case where the “force ability “fan assessment order passed by the AO has been stayed by the High Court or Supreme Court?
Answer:		Yes, in such case assessee can file declaration under Vivad se Vishwas, 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.
Q. No.	58.	Appeal or writ against order under section u/s 263 of the Act was pending on 31st Jan, 2020 (or time to file appeal has not expired on 31st Jan, 2020). Whether Vivad se Vishwas can be availed. for settling such appeal?
Answer:		If order u/s 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 u/s 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 u/s 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.
Q. No.	59.	Whether the taxpayer in whose case the time limit for filing appeal has expired before. 31st Jan 2020 but an application for condonation of delay has been filed is eligible?
Answer:		If the time limit for filing appeal expired during the period from 1st April 2019 to 31st 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 31st Jan 2020.