“Vivad se Vishwas”

Article authored by Shipra Walia, W S & Associates
LLP.

Government of India has introduced an amnesty scheme
for direct tax disputes under the name of “Vivad se Vishwas” with an intent to
close the prolonged litigations and rewrite the new chapter between the
Income-tax authorities and the assessee.

The Key features which may be relevant for the
business are:

6. Under this scheme, taxpayers
   whose tax demands are locked in dispute in multiple forums, can pay due to
   taxes by March 31, 2020, and get a complete waiver of interest and
   penalty.
7. Can be filed where the appeal
   is pending before any appellate forum as on January 31, 2020.
8. In case of appeals or petitions
   pending before the Supreme Court and High Courts, the appellant is
   required to withdraw the appeal or petition.
9. The amount payable by the
   appellant for resolution of disputes is determined based on whether the
   dispute relates to payment of tax, or payment of interest, penalty, or
   fee.
10. Pay out under the scheme.
11. Appellant is required to
    furnish an undertaking waiving his rights to seek any remedy or claim in relation
    to that dispute under any law including the Income-tax Act, 1961 (“the
    Act”).
12. The declaration filed by an
    appellant will become invalid if: (i) its particulars are found to be
    false, (ii) he violates any of the conditions referred to in the IT Act,
    or (iii) he seeks any remedy or claim in relation to that dispute.
13. Once a dispute is resolved, the
    designated authority cannot levy interest or penalty in relation to that
    dispute. Further, no appellate forum can make a decision in relation to
    the matter of dispute once it is resolved. Such matters cannot be reopened
    in any proceeding under any law, including the Act.
14. The proposed mechanism will not
    cover certain disputes. These include disputes: (i) where prosecution has
    been initiated before the declaration is filed, (ii) which involve persons
    who have been convicted or are being prosecuted for offences under certain
    laws (such as the Indian Penal Code), or for enforcement of civil
    liabilities, and (iii) involving undisclosed foreign income or assets.