While appreciating the Government for introducing reforms to reduce litigation in the taxation environment, Dr D K Aggarwal, President, PHD Chamber of Commerce and Industry said in a press statement issued here today that Vivad se Vishwas Scheme announced in Union Budget 2020-21 on 1st February 2020 will benefit many taxpayers and can generate more than Rs 2 Lakh crore for the Government in the coming times if it is broadened and exclusions are minimum under this scheme.
In the Vivad se Vishwas Scheme, the Government has announced that the amount of disputed tax or 25% of disputed interest or disputed penalty or disputed fee is payable on or before 31st March 2020. We request the Government to extended the last date to 30th April 2020 from 31st March 2020 without any penalty so that scheme is well spreader across the country and a large number of taxpayers under the litigation cases are able to take advantage of the scheme, said Dr Aggarwal.
Currently, there are 4,83,000 direct tax cases pending in various appellate forums i.e. Commissioner (Appeals), ITAT, High Court and Supreme Court. Dr D K Aggarwal appreciated that in the last budget, Sabka Vishwas Scheme was brought in to reduce litigation in indirect taxes which resulted in settling over 1,89,000 cases.
It is suggested that the Vivad Se Vishwas scheme may allow everyone to come forward and settle their dispute not only existing ones but also dispute (s) which are likely to arise, said Dr Aggarwal.
The Sabka Vishwas Scheme announced last year for Indirect Taxes was broad based, allowing everyone to come forward and settle not only the existing dispute but also where he/she anticipates that dispute may arise, said Dr Aggarwal.
Dr D K Aggarwal suggested that scope of this scheme may be extended to all cases where time limit to file appeal has not expired and appeal is pending to be filed as on 31.01.2020.
It is suggested that such cases where objections have been filed and the same is pending before the Dispute Resolution Panel (DRP) as on 31.01.2020 may also be included and eligible under this scheme, said Dr Aggarwal.
An option may be given to settle all disputes where the appeals are pending before assessing officer or inclusion of cases where similar disputes are likely to arise in future, said Dr Aggarwal.
This will encourage people to come out clean once and for all and avoid unnecessary litigation in the future similar issues, said Dr Aggarwal. As per the Scheme, where assessment has been made under section 153A or section 153C of the Income-tax Act, the benefit of Vivad se Vishwas scheme will not be available.
In this regard, it is observed that 6 years prior to the search are assessed under section 153A or section 153C, the year in which search takes place is assessed under section 143(3) and not under section 153A or section 153C.
Accordingly, the year of search will be eligible under the Vivad se Vishwas scheme as the assessment order in respect of the search year is passed under section 143(3) and not under section 153A.
It is suggested that scope may be widened to include such search cases with a little higher rate of tax. This will help in getting rid of a large number of disputes, said Dr Aggarwal.
Under this scheme, inclusion of cases pending before the Commissioner (Appeals) in respect of which notice of enhancement under section 251 of the Income-tax Act has been issued on or before 30.01.2020 is suggested, said Dr Aggarwal.
An option may be given to taxpayers to claim benefit under the scheme keeping in view the tax demand after including the income as proposed for enhancement by the Commissioner of Income Tax (Appeals) -CIT(A).
The above inclusions will go a long way in ensuring grand success of the scheme and putting an end to most of the Vivad, said Dr Aggarwal.