Tax disputes pending before the Authority of Advance Ruling (AAR) will not be covered under the Vivad Se Vishwas scheme, which aims at settling pending direct tax disputes in the country.

The Central Board of Direct Taxes (CBDT) issued a set of 55 questions and answers on Thursday to clarify various aspects of the tax amnesty scheme, which allows taxpayers to settle disputes by paying interest and penalty.

The scheme was announced in the budget to bring down pending litigation and a bill to give it shape was approved by Lok Sabha.

“After introduction of Vivad se Vishwas in Lok Sabha, several queries have been received from the stakeholders seeking clarifications in respect of various provisions contained in the scheme…The FAQs contain clarifications on scope/eligibility, calculation of disputed tax, procedure related to payment of disputed tax and consequential benefits to the declarant,” the CBDT said in a statement.

The apex direct taxes body said the scheme will not be available for disputes pending before AAR, but in cases where a writ is filed against AAR order and such AAR order determines the total income of the assessee, taxpayers can avail themselves of the scheme.

Disputes relating to wealth, securities transaction, commodity transaction taxes and equalisation levy will not be covered under the amnesty scheme, as the purview of the scheme is limited to income tax disputes, it said.

The CBDT explained how the scheme would work in cases where appellate forum has set aside the assessment and settlement of disputes relating to fees under section 234E/F, applicability to waiver applications of interest under section 234A/B/C and settlement of tax deducted at source disputes. It also stated via illustrations calculation of liability under the scheme in various scenarios.

The CBDT said that where an assessee has not filed objections before the dispute resolution panel against the draft order and the final assessment order is not passed by assessing officer on or before the specified date, which is January 31, 2020, such assesses can avail themselves of the scheme.

It said two appeals in different tax appellate fora – Income Tax Appellate Tribunal or Commission (appeals) – for the same year can be settled together, but the amount that the taxpayer will have to pay up will be an aggregate of disputed tax amounts in both cases. It said the cases where enhancement notices were issued by commissioner (appeals) prior to January 31, 2020, would be eligible under the scheme.

In cases where the dispute relates to reduction of minimum alternate tax (MAT) credit or reduction of loss or depreciation in an assessment year, the appellant shall have an option either to include the amount of tax related to such MAT credit or loss or depreciation in the amount of disputed tax and carry forward the MAT credit or loss or deprecation, or to carry forward the reduced tax credit or loss or depreciation.

Source : Times of India