Building a modern IndiaV I VA D S E V I S H WA S B I L L , 2 0 2 0

The Direct Tax Vivad se Vishwas Bill, 2020at a glance

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Considering the colossal figure of ₹ 9.32 lacs Crs. of disputed direct tax arrears stuck in pending litigations, “The Direct Tax Vivad se Vishwas Bill, 2020” [“The Scheme”] has since been introduced in the Parliament on 05-02-2020.

Snapshot of the Bill is as under:

§ The Scheme aims to reduce substantial amount of time, energy and resources wasted in dealing with such pending direct tax disputes and to benefit the Government with timely collection.

§ Any person [declarant] who wish to opt for the scheme may file a declaration in a prescribed manner on or before the last date [to be notified] to the designated authority (DA) being officer not below the rank of CIT to be notified by PCCIT.

§ Such declaration can be made in respect of a tax arrear pending in an appeal as on specified date i.e 31-01-2020 before CIT(A), ITAT, HC or SC, whether filed by department or assessee.

§ Tax arrear shall mean to include

(a) Disputed tax including interest charged or chargeable on such tax and penalty levied or leviable on such disputed tax, or

(b) Disputed interest determined under the Act, or

(c) Disputed penalty determined under the Act

(d) Disputed fee determined under the Act

§ Disputed tax has been defined as under: (A-B) + (C-D) Where,

A Tax on assessed total income under normal provisions (Other than MAT)

B Tax on assessed income under normal provisions less income appealed against

C Tax on assessed total income under MAT provisions

D Tax on assessed income under MAT provisions less income appealed against

� Where an amount of income in respect of which an appeal is considered both under normal and MAT provisions, such amount shall not be reduced from total assessed income while computing item D.

� In case where income in respect of which appeal has been filed has the effect of reducing loss or converting loss into income, the above formula would apply with specified modifications

� Disputed tax includes tax determined on account of defaults of TDS and TCS provisions

§ Payment of tax arrear by the declarant shall be as follows–

§ Upon filing the declaration in respect of tax arrear-

� any appeal pending before the ITAT or CIT (A) shall be deemed to be automatically withdrawn from the date when certificate u/s 5(1) is issued by DA.

� in case of declarant’s appeal pending before the appellate forum or any writ petition pending before HC or SC, the same has to be withdrawn by the declarant.

� if any proceeding for arbitration, conciliation or mediation has been initiated, or any notice thereof has been given under any law or under any

agreement entered into by India with any other country or territory outside India, whether for protection of investment or otherwise, the declarant shall withdraw the claim.

� the declarant shall furnish an undertaking waiving his right to seek or pursue any remedy or any claim in relation to the tax arrear under any law in such manner as may be prescribed.

§ In case any material particulars in declaration is found to be false or there is violation of any conditions specified under this Act or if the declarant does not

Sl. No. Nature of tax arrear Amount to be paid on/before 31-03-2020

Amount payable on/after 01-04-2020 but on /before the last date*

(a) Disputed tax + consequential Interest and Penalty

Amount of disputed tax Amount of disputed tax + 10 % of disputed Tax (Provided such 10 % of disputed tax shall not exceed Interest + Penalty)

(b) Disputed Interest/ Penalty/Fee

25% of disputed Interest/ Penalty/ Fee

30% of disputed Interest/ Penalty/ Fee

*last date shall be notified by CG separately

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comply with the undertaking for waiver of rights given by him, all the proceedings or claims withdrawn earlier shall be revived under the IT Act.

§ Within 15 days of receipt of declaration, the DA shall determine the amount payable and grant a certificate u/s 5(1) to the declarant containing details of tax arrear and amount payable.

§ The amount so determined under the certificate shall be paid (non-refundable) within 15 days of receipt of certificate and intimated to the DA, who shall thereafter pass an order u/s 5(2) stating that amount has been paid.

§ On passing of the order u/s 5(2), matters stated therein shall be concluded and shall not be reopened in any other proceedings under IT Act or under any law etc. No proceedings shall be instituted in respect of an offence; or no penalty or interest shall be imposed or levied under IT Act, in respect of such tax arrear.

§ The provisions of this Act shall not apply—

(a) in respect of tax arrear relating to,—

� AY where assessment has been made u/s 153A or Sec. 153C of the IT Act;

� AY where prosecution has been instituted on or before the date of filing of declaration;

� any undisclosed income from a source or asset located outside India;

� an assessment or reassessment made on the basis of information received under an agreement referred to in Sec. 90/90A of the IT act;

� an appeal before the CIT(A) in which notice of enhancement u/s 251 of the IT act has been issued on or before the specified date (i.e. 31-01-2020);

(b) to any person in respect to whom order of detention has been made under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 on or before the filing of declaration subject to certain exceptions and conditions;

(c) to any person in respect of whom prosecution for any offence has been instituted on or before filing the declaration or the person is convicted under the provisions of Indian Penal Code, the Unlawful Activities (Prevention) Act, 1967, the Narcotics Drugs and Psychotropic Substance Act, 1985, the Prevention of Corruption Act, 1988, the Prevention of Money Laundering Act, 2002, the Prohibition of Benami Property Transactions Act, 1988 or in respect to any proceedings for enforcement of civil liability etc.

(d) to any person notified u/s 3 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992.

§ The Board for effective enforcement of above Act may from time to time issue such other orders or directions as it may deem fit.

§ CG has the power to make rules for carrying out the provisions of this Act.

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