Guided by “Sabka Saath, Sabka Vikas, Sabka Vishwas”, the Finance Minister Smt. Nirmala Sitharaman had introduced a new No Dispute but Trust Scheme – ‘Vivad Se Vishwas’ in the Budget 2020 in the Lok Sabha on 5th February, 2020. Expectations are that the new scheme will work better than erstwhile similar scheme “The Direct Tax Dispute Resolution Scheme, 2016”, given the kind of cases that are in appeal. As per the combined reading of the The Direct Tax Vivad se Vishwas Bill, 2020 introduced on 05.02.2020 and amendments issued on 14.02.2020, the following person shall be eligible for the benefit under this scheme:
‘(a) “appellant” means ––
(i) a person in whose case an appeal or a writ petition or special leave petition has been filed either by him or by the income-tax authority or by both, before an appellate forum and such appeal or petition is pending as on the specified date;
Analysis: Any person whose appeal is pending before CIT/ITAT/HC/SC, any person whose writ petition is pending before HC/SC, any person whose special leave petition is pending before SC. Here any person also includes person in whose case appeal is filed by department in any of the above forums. The specified date for the Scheme is 31.01.2020. Hence the person/department should have any appeal/Writ/SLP pending before CIT/ITAT/SC/HC as on 31.01.2020.
(ii) a person in whose case an order has been passed by the Assessing Officer, or an order has been passed by the Commissioner(Appeals) or the Income Tax Appellate Tribunal in an appeal, or by the High Court in a writ petition, on or before the specified date, and the time for filing any appeal or special leave petition against such order by that person has not expired as on that date;
Analysis: The scope of appellant has been widened to include appealable orders as well. Cases where time limit of filing appeal has not expired as on specified date i.e 31.01.2020 have been included in this sub-clause. For example, Mr. X has filed an appeal before First Appeal Authority – CIT(A), and if CIT(A) has dismissed the appeal of Mr. X on 22.01.2020. So in this case, the due date of filing appeal before the Second Appeal Authority- ITAT expires after 60 days from the date of First Appeal Order i.e. 22.03.2020. Hence Mr. X will be termed as an appellant for the purpose of Vivad se Vishwas Scheme.
(iii) a person who has filed his objections before the Dispute Resolution Panel under section 144C of the Income tax Act, 1961 and the Dispute Resolution Panel has not issued any direction on or before the specified date;
Analysis: Cases where assessee has filed any objection against draft order before Dispute resolution panel u/s. 144C of the Act are covered here. It is to be noted that objection should have been filed before DRP and Assessing officer both as per Sec 144C(2)(b). If DRP has not issued any direction then such cases are eligible for the scheme. If Dispute Resolution panel has issued any direction then the next clause of the scheme is attracted.
(iv) a person in whose case the Dispute Resolution Panel has issued direction under sub-section (5) of section 144C of the Income-tax Act and the Assessing Officer has not passed any order under sub-section (13) of that section on or before the specified date;
Analysis: Cases where DRP has issued any direction to Assessing Officer u/s 144C (5) upon receipt of objections from assessee under Sec 144C (2) and Assessing Officer has not passed the assessment order u/s. 144C (13) of the Act are covered here.
(v) a person who has filed an application for revision under section 264 of the Income-tax Act and such application is pending as on the specified date.
Analysis: Cases where application for revision has been filed before CIT/PCIT under section 264 of the Act are eligible under this clause. However this scheme would be applicable only when such application is pending on 31.01.2020. Further Sec 264 excludes all the order to which section 263 applies, hence the same is excluded from the benefit of the scheme indirectly.
Conclusion- ‘Vivad se Vishwas’ will undisputedly benefit the interest of taxpayers looking for an expeditious and rapid settlement of their tax claims raised by the Department. It is an advantageous scheme for both the taxpayer and the revenue department.
You may Download the full Copy of THE DIRECT TAX VIVAD SE VISHWAS BILL, 2020
Read with amendments here.
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