In a major development, the Income Tax Department has said that entities filing declaration under the direct tax dispute resolution scheme ‘Vivad Se Vishwas’ can revise them till the time tax authorities issue certificate mentioning details of tax arrear and the amount payable.
Issuing a set of FAQs on ‘Vivad Se Vishwas’ scheme, the Central Board of Direct Taxes (CBDT) also said the scheme cannot be availed in a case where proceedings are pending before Income Tax Settlement Commission (ITSC) or where writ has been filed against the order of ITSC.
The CBDT also clarified that in a case where Mutual Agreement Procedure (MAP) resolution is pending or the assessee has not accepted MAP decision, the related appeal shall be eligible under ‘Vivad se Vishwas’. “In such case, the declarant will be required to withdraw both MAP application and appeal,” it added.
The I-T department also clarified that a taxpayer would be eligible for making declarations in cases where the Authority for Advance Ruling (AAR) has ruled in favour of the taxpayer and the department has filed appeal before the High Court/Supreme Court and the total income of the taxpayer was quantified before AAR.
“Yes, the taxpayer is eligible since the income is quantifiable. In such case, since the issue is covered in favour of taxpayer, only 50 per cent of the disputed tax is payable,” the CBDT said.
The government had in October extended for the third time the deadline for making payment under the direct tax dispute settlement scheme ‘Vivad Se Vishwas’ by three months to March 31, 2021, in view of the ongoing COVID-19 pandemic. However, declarations have to be filed by December 31, 2020.
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