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Vivad se Vishwas Scheme (Dispute Resolution) 2020

In this article we highlight the provisions of the bill for the cases where the person may not be able to opt for the scheme. The article has been divided into two parts as follows:

1. Cases excluded by the bill itself

The following person shall not be eligible to opt for the scheme –

  • Against whom search has been conducted and assessment has been framed under section 153A or 153C of the Act.
  • Against whom prosecution has been instituted.
  • Person having undisclosed income from a source located outside India or undisclosed asset located outside India.
  • Against whom the assessment has been framed based on the information available from tax treaties across the countries.
  • Against an order of CIT(A) who have enhanced the original tax liability.
  • Against any person in respect of whom an order of detention has been made under the provisions of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 subject to some conditions
  • Against any person in respect of whom prosecution for any offence punishable under the provisions of the Indian Penal Code, the Unlawful Activities (Prevention) Act, 1967, the Narcotic Drugs and Psychotropic Substances Act, 1985, the Prevention of Corruption Act, 1988, the Prevention of Money Laundering Act, 2002, the Prohibition of Benami Property Transactions Act, 1988 or for the purpose of enforcement of any civil liability has been instituted or such person has been convicted of any such offence punishable under any of those Acts.
  • Against any person notified under section 3 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992

2. Cases not excluded by the bill but deemed to be excluded on interpretation of bill

While the above list is exhaustive and described in the bill itself, it is important to understand what are the cases that may not covered above, and they will not be eligible to opt for the scheme.

The bill is clear to cover those cases which are pending in any appellate forum. So one must conclude that the following cases shall not be covered under Scheme –

  • Assessment framed or appeal decided against assesse but assesse did not prefer appeal/further appeal on or before 31stJanuary, 2020 whether or not time for filing appear expired.
  • Where an application to DRP has been made.
  • Where an application to settlement commission has been made.
  • The orders which are not appealable, for ex. Order passed under Section 179 of Income Tax Act.

If we analyse the provisions of bill, we will appreciate the fact that the scheme will be opted only if tax, interest, penalty is disputed. There might be the cases where orders have been passed by income tax authorities, but the concern of aggrieved party is other than tax matters. Some of the example are as follows –

  • Order to cancel the registration of charitable trusts.
  • Order for refusal of 80G registration to a charitable trust.
  • Order of Refusal to grant stay of demand.
  • Order passed u/s 197(1) giving a higher rate of certificate.

Disclaimer : The questions/answers are based on the Bill that still needs the consent of President for implementation of same. This guide is for circulation among the clients of D S R V AND CO LLP and other Chartered Accountants, the views is the personal views of the author, D S R V AND CO LLP would not be responsible for any action taken based on this, without any consultation.

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