Post the success of the Vivad se Vishwas scheme, 2020, the Government introduced The Direct Tax Vivad se Vishwas Scheme, 2024 through Section 88 of Finance (No. 2) Act, 2024. Vivad se vishwas scheme (VsV 2024) provides an option to the taxpayer for settlement of tax disputes by paying a lesser amount of disputed tax, interest, and penalty.
Post enactment of Finance (No. 2) Act, 2024, CBDT has notified Direct Tax Vivad se Vishwas Scheme, 2024 vide Notification No. 103/2024 dated 19th September 2024 that the VsV scheme shall come into effect from 01.10.2024. Further, rules and forms related to VsV 2024 are notified through Notification No. 104/2024 dated 20th September 2024.
1. Who is eligible to apply under VsV Scheme
As per Section 89(1) of Finance (No. 2) Act, 2024, the following person is eligible to apply under VsV Scheme:
- Whose appeal or writ petition or special leave petition, filed by the taxpayer or income-tax authority, is pending on a specified date before the appellate forum;
- Whose objections are pending before the Dispute Resolution Panel under section 144C of the Income-tax Act on a specified date; or
- Where directions are issued by the Dispute Resolution Panel and the Assessing Officer has not completed the assessment till the specified date; or
- Who has filed an application for revision under section 264 of the Income-tax Act and such application is pending till specified date
The specified date in such a case is 22nd July 2024. Therefore, the status of the pendency shall be checked on 22nd July 2024.
Appellate Forum means:
- Supreme Court;
- High Court;
- Income Tax Appellate Tribunal;
- Commissioner (Appeals);
- Joint Commissioner (Appeals)
2. Amount payable for settlement of dispute
As per Section 90 of Finance (No. 2) Act, 2024 where a declarant files a declaration under VsV Scheme 2024, the declarant shall be liable to pay the following amount:
| Nature of Tax Arrear | The amount payable under the scheme up to 31.12.2024 | Amount Payable on or after 01.01.2025 but before the last date* |
| Where the appeal is filed after 31.01.2020 but up to 22.07.2024. | ||
| The appeal is filed before 31.01.2020 and is pending with the same tax forum | The appeal was filed before 31.01.2020 and is pending with the same tax forum | 100% of the Disputed Tax Amount |
| The appeal was filed before 31.01.2020 and is pending with the same tax forum | 120% of the disputed tax amount | 110% of the Disputed Tax amount |
| The appeal is filed before 31.01.2020 and is pending with the same tax forum | ||
| 30% of disputed interest, penalty, or fees | 30% of disputed interest, penalty, or fees | 35% of disputed interest, penalty, or fees |
| Where the appeal is filed after 31.01.2020 but up to 22.07.2024. | 25% of disputed interest, penalty, or fees | 110% of the disputed tax amount |
Other Points:
- Where an appeal writ petition or special leave petition is filed by the income-tax authority, the amount payable shall be half of the amount mentioned above;
- Where an appeal is filed before the Commissioner (Appeals) or Joint Commissioner (Appeals) or Dispute Resolution Panel or Income Tax Appellate Tribunal on which is already decided in his favor by Income Tax Appellate Tribunal or the High Court (Such order is not reversed by higher authority), the amount payable shall be one-half of the above-specified amount;
* The last date of payment under the VsV Scheme is yet to be notified
3. Process of filing of declaration
Notification No. 104/2024 dated 20th September 2024 notified the Direct Tax Vivad se Vishwas Rules, 2024 specifying the forms required to be filed by the taxpayer and the process of filing the same
3.1 Declaration form filing by the taxpayer
- As per Section 91 of the Finance Act, the taxpayer opting for the VsV scheme shall file the declaration in Form 1 to the designated authority. Separate Form-1 shall be filed in respect of each order;
- Where an appeal or writ petition or SLP is filed in a matter by both taxpayer and Income tax authority, a single declaration shall be filed by the appellant in such matter.
- “Designated authority” means an officer not below the rank of a Commissioner of Income-tax notified by the Principal Chief Commissioner for this Scheme;
3.2 Determination of tax payable by the Designated Authority
- The designated authority shall determine the amount payable by the VsV scheme by the declarant within 15 days of receipt of the declaration.
- A certificate shall be issued to the declarant containing particulars of the tax arrear and the amount payable in Form-2.
3.3 Payment of determined tax by the appellant
- The appellant shall pay the amount as given in the certificate issued by the designated authority within 15 days of receipt.
- Intimation of payment shall be furnished in form-3 along with proof of withdrawal of the appeal, objection, writ petition, or special leave petition;
3.4 Issuance of order by designated authority
- Upon receipt of intimation from the taxpayer in Form-3, the designated authority shall issue a certificate of payment by the appellant in Form-4;
3.5 Other Points
- Every order passed in Form-2 determining the tax payable shall be conclusive as to the matters stated therein. No matter covered by such order shall be reopened in any other proceeding under the Income-tax Act or any other law.
- Making a declaration under this scheme shall not amount to conceding the tax position and no party to the appeal shall be considered to be acquiesced in the decision on the disputed issue by settling the dispute.
4. Conclusion of Dispute
- Upon filing of declaration, any appeal pending before the Income Tax Appellate Tribunal or Commissioner (Appeals) or Joint Commissioner (Appeals) shall be deemed to have been withdrawn from the date on which the certificate is issued in Form-2.
- Where the declarant has filed an appeal before the appellate forum or High Court or Supreme Court, the appellant shall withdraw such appeal or writ petition or SLP wherever required post-issuance of certificate in Form-2 and shall furnish the proof of such withdrawal to the designated authority.
