Circular No 9/2020 Income tax
F No. JT(A)/1/2020-TPL
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
Circular No 9/2020 Income tax
FAQs on Direct Tax Vivad se Vishwas Act 2020
Dated 22nd April 2020
Sub.: Clarifications on provisions of the Direct Tax Vivad se Vishwas Act, 2020 – reg.
During the Union Budget, 2020 presentation, the ‘Vivad se Vishwas’ Scheme was announced to provide for dispute resolution in respect of pending income tax litigation. Pursuant to Budget announcement, the Direct Tax Vivad se Vishwas Bill, 2020 (the Bill) was introduced in the Lok Sabha on 5th Feb, 2020. Subsequently, based on the representations received from the stakeholders regarding its various provisions, official amendments to the Bill were proposed. These amendments sought to widen the scope of the bill and reduce the compliance burden on taxpayers.
2. After introduction of the bill in Lok Sabha, several queries were received from the stakeholders seeking clarifications in respect of various provisions contained therein. Government had considered these queries and had dccided to clarify the same in fonn of answcrs to frequently asked questions (FAQs) vide circular no 7 of 2020 dated 41h March 2020. These clarifications were, however, subject to approval and passing of the bill by the Parliament and receiving assent of the Hon ‘ble President of India.
3. The Bill has since been passed by the Parliament and has also received the assent of the Hon ‘ble President of India and has now been enacted as The Direct Tax Vi vad Se Vishwas Act, 2020 ( Viva(/ se Vishwas). The objcctive of Vivad se Vis/lWas is to inler alia reduce pending income tax litigation, generate timely revenue for the Government and benefit taxpayers by providing them peace of mind, cel1ainty and savings on account of time and resources that would otherwise be spent on the long-drawn and vexatious litigation process.
4. 55 questions containcd in circular no 7 of 2020 arc reissued under this circular with following modi Rcations
(i) Vivad se Vis/lWas refelTed to Direct Tax Vivad se Vishwas Bill, 2020 in circular no 7. Howcver, in this circular it refers to The Direct Tax Vivad Se Vishwas Act, 2020;
(ii) Since clauses of the Bill have now become sections in the Vivad Se Vis/lWas, the reference to “clause” in circular no 7 has been replaced with “section”;
(iii) Reference to declaration form in circular no 7 has been replaced with referencing of relevant fonn, since rules and forms have now been notified; and
(i v) Answer to question no 22 has been modified to renect the COlTCCt intent of the law. It has now been clarified that where only notice for initiation of prosecution has been issued without prosecution bcing instituted, the assessee is eligiblc to file declaration under Viva(/ se Vi.\·hwas. However, where the prosecution has been instituted with respect to an assessment year, the assessec is not eligible to file declaration for that assessment year under Vivad se Vis/lWas, unlcss the prosecution is compounded before filing the declaration.
5. Section 10 and II of the Vivad se VislHvas empowers the Board or the Central Government to issue directions or orders in public interest or to remove difficulties. This circular is such direction/order issued under section 10 and section II of the Vivad se VislHvas. Thus answers to some of the questions in this circular extend the application of Vivad se Vishwas in public interest or to remove difficulties, under section 10 and section II of Vivad se Vishwas.
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