CBDT issues clarification on provisions of the Direct Tax Vivad Se Vishwas Act 2020

The Central Board of Direct Taxes vide its circular dated 22nd April 2020 has issued clarifications in respect of various provisions under the Direct Tax Vivad Se Vishwas Act 2020.

The objective of Vivad se VishWas is to reduce the pending income tax litigation, generate timely revenue for the Government and benefit taxpayers by providing them peace of mind and savings on account of time that would otherwise be spent on the long-drawn and vexatious litigation process.

Highlights from the clarification:

  • The Appeals which are covered under the Vivad se Vishwas includes Appeals pending before the appellate forum [Commissioner (Appeals), Income Tax Appellate Tribunal (ITAT), High Court or Supreme Court), and writ petitions pending before High Court (HC) or Supreme Court (SC) or special leave petitions (SLPs) pending before SC as on the 31 st day of January, 2020.
  • An assesse whose case is pending in arbitration is eligible to apply for settlement under Vivad se Vishwas even if no appeal is pending. However Vivad se Vishwas is not available for disputes pending before Authority of Advance ruling (AAR).
  • Appeals in which 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.
  • If department appeal is required to be settled, then against that appeal, the appellant is required to pay only 50% of the amount that is otherwise payable if it was his appeal.
  • Under Vivad se Vishwas interest and penalty will be waived only in respect of the issue which is disputed in appeal and for which declaration is filed. Hence for the undisputed issue, the tax, interest and penalty shall be payable.

Click here to read the notification.