Month: June 2020

DTVSV Scheme 2020

More Relaxations

IBBI has suspended initiation of corporate insolvency process temporarily for 6 months, MCA has extended the time limit for conducting AGMs for FYE 31st December, 2020 and EGMs through VC or OAVM upto 30th September, 2020. As like various departments are providing various relaxations to support us to handle this COVID-19 situations.

In this edition, we will be seeing one such relaxation provided by the Income Tax Department. Vivad Se Vishwas Scheme 2020 a bridge to dispute-trust divide for minimizing Tax-related Litigation. We will have our usual Legal terms and News Bites related to notifications by MCA, SEBI, RBI, IT and GST following the article.

 

CEO CS Saranya Deivasigamani,

CEO

DTVSV Scheme 2020

To provide for resolution of disputed tax and for matters connected therewith or incidental thereto, The Direct Tax Vivad Se Vishwas Scheme (DTVSV) Act 2020 has been passed by Parliament. This act intends to reduce litigation and for settling matters that have been pending for several years.

The Bill was introduced in the Parliament on 5 February 2020 and the Parliament received the assent of the President and the scheme got enacted into law on 17 March 2020 and the relevant rules were prescribed on 18 March 2020.

Objective of the Scheme

  • Reduce income tax pending litigation.
  • Generate timely revenues for the Government.
  • Help taxpayers end their tax disputes with the department by paying disputed tax and get waiver from payment of interest and penalty. Also get immunity from prosecution.

Features

  • Key dates – date of opening / closing, payment dates.
  • Eligibility – class of taxpayers eligible to settle disputes.
  • Payment terms – what is the amount to be paid for settlement of dispute.
  • Exclusion – class of taxpayers excluded from the Bill.
  • Consequences – Benefits, immunity etc under the Bill.
  • Delegated Legislation – power to make rules, remove difficulty etc.
  • Start date – Date on which the Bill gets the assent of Hon’ble President after being passed by the Parliament.
  • Last Date – Date to be notified by the Government (Likely to be 30th June 2020)
  • Payment –  Required by 31st March 2020. After this date and before closure of scheme the payment shall be at higher rate.

Eligibility

  • Appeals, writs, SLPs, arbitration (filed by Department or taxpayer) filed on or before 31 Jan 2020.
  • Orders for which time for filing appeal has not expired on 31 Jan 2020.
  • Cases pending before Dispute Resolution Panel (DRP).
  • Cases where DRP issued direction on or before 31 Jan 2020 but order has not yet been passed.
  • Cases where assessee filed revision application under section 264 on or before 31 Jan 2020.
  • Dispute where payment has already been made shall also be eligible.
  • The pending appeal, writ, SLP, arbitration could be against-
    • Disputed tax (including interest or penalty on such disputed tax) in relation to an assessment or reassessment order
    • Disputed interest, disputed penalty or disputed fees where there is no disputed tax.
  • Disputed tax can also include the tax determined on default in respect of tax deducted at source (TDS) or tax collected at source (TCS).
  • Disputed tax shall include tax on enhancement notice.

Payment Terms

If an issue in taxpayer’s pending appeal already decided in favor of taxpayer by higher appellate forum or if Department has filed appeal, amount payable is 50% of aforesaid amounts.

Exclusion

The cases that cannot avail the scheme are:

  • Search cases if disputed tax in a year is more than Rs.5 crore.
  • Cases where prosecution has been initiated by the department under Income-tax Act or under Indian Penal Code.
  • Cases involving undisclosed foreign income and assets.
  • Cases completed on the basis of information received from foreign jurisdiction.
  • Cases where person is notified under Special Courts (Trial of Offences Relating to Transactions in Securities) Act, 1992 or detained under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974.
  • Cases covered under Narcotic Drugs and Psychotropic Substances Act, Unlawful Activities (Prevention) Act, Prevention of Corruption Act, Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, Prevention of Money Laundering Act, Prohibition of Benami Property Transactions Act.

Consequences

The scheme is consequent to such declaration and on fulfillment of conditions, all appeals, writs, SLPs, arbitration to be withdrawn (both by taxpayer and by department). Immunity will be granted from levy of interest, penalty and institution of any proceeding for prosecution for any offence under the Income-tax Act in respect of matters covered in the declaration. If excess payment made before filing declaration, refund shall be issued without interest.

Delegated Legislation

CBDT is proposed to be given power to issue such orders, instructions and directions to the income-tax authorities for the proper administration of the Act. Central Government is proposed to be given power to make rules for carrying out provision of this scheme. Central Government is proposed to be given power to remove difficulties by issuing appropriate orders not inconsistent with the scheme.

For all disputes in Income Tax Department, we shall avail relief through DTVSV Scheme 2020.

Legal Terms

Trial de novo

n. a form of appeal in which the appeals court holds a trial as if no prior trial had been held. A trial de novo is common on appeals from small claims court judgments.

NewsBites

MCA Updates

SEBI Updates

RBI Updates

IT Updates

GST Updates