Vivad se Vishwas 2020, Form-4 is not found correct to be processed for issuance of Form-5

This query is : Resolved

Chartered Accountant (Querist)
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04 March 2025 As per CBDT Order dated 27.06.2024 [issued in F.No. 173/03/2021-ITA-I(Pt.2)] The last date to make payment under Form 4 under DTVSV 2020 was 28.02.2022, One of my client opted for DTVSV 2020 but payment in case of my client was made on 19/03/2022, The status on IT Portal in my client's case was still showing "Awaiting Signed Form 5 from CIT", Therefore I e-mailed office of P-CIT to issue Form-5 and they replied that payment was made beyond the due date hence Form-4 is not found correct to be processed for issuance of Form-5 on the other hand my appeal was pending in ITAT of which Order has been passed u/s 250 of Income Tax Act,1961 The appeal is dismissed on the grounds that the appellant had opted for the Vivad se Vishwas Scheme, settling the tax dispute.
What are further consequences and their solutions?

Asha Kanta Sharma online

Asha Kanta Sharma online

(Expert)
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12 August 2025 This is a very specific and tricky legal-tax situation involving timelines under the Vivad se Vishwas Scheme (DTVSV) 2020, where there's a mismatch between payment timing and legal consequence.

🔍 Summary of Your Situation:
Particulars Details
Scheme opted Vivad se Vishwas 2020 (DTVSV)
Form-4 filed ✅ Yes
Payment date ❌ Made on 19.03.2022, after extended due date of 28.02.2022
Portal status "Awaiting Signed Form-5 from CIT"
AO/P-CIT response Form-4 not valid since payment made after due date
ITAT appeal status Dismissed because you opted for VSV scheme
Problem No Form-5 issued (which gives conclusive proof of dispute settlement), but appeal has been dismissed assuming VSV was validly settled

⚠️ Consequences:
❌ 1. No Legal Settlement Under DTVSV
Since payment was made late, Form-4 is void and Form-5 is not issuable, as per CBDT Order dated 27.06.2024 and the scheme rules.

Legally, you have not settled the dispute under VSV, because payment was not within permitted timelines.

❌ 2. Appeal Dismissed as "Settled" – But It’s Not
The ITAT dismissed the appeal on the wrong assumption that DTVSV settlement was complete.

You now have no Form-5 and no appeal remedy.

✅ What Are Your Options Now?
🟠 Option 1: File a Miscellaneous Application (MA) before ITAT
You can file a Miscellaneous Application under Section 254(2) of the Income Tax Act before the same ITAT Bench that passed the dismissal order.

Why?
There is a clear error apparent from record: the ITAT assumed the case was settled under VSV, which is factually incorrect since Form-5 was not issued.

Relief can be sought to recall the dismissal order, reinstate the appeal, and restore the case to hearing.

Timeline:
Section 254(2) allows filing within 6 months of the order. If it’s passed recently (say post-April 2025), you are within time.

🟠 Option 2: Request for Condonation / Reopen DTVSV Route
This is more uncertain.

You can write a detailed condonation request to the Principal Commissioner (P-CIT) or CBDT explaining the late payment and seek permission to regularize Form-4.

But given the strict nature of DTVSV deadlines and the CBDT’s latest order dated 27.06.2024, it is very unlikely they will accept this unless there is:

A CBDT circular issued granting further condonation, or

You have strong medical/emergency reason for the delay (with documentary proof).

✅ Recommended Course of Action:
Step Action
1 File MA before ITAT under Section 254(2) to restore the appeal
2 Attach evidence that VSV failed due to late payment
3 In parallel, write to P-CIT/CBDT for condonation (if delay is minor & justifiable)
4 Prepare for appeal hearing if ITAT allows MA

📌 Supporting Precedents
Several courts have allowed MA under Section 254(2) in cases where appeals were dismissed due to procedural assumptions or errors, especially when Form-5 was not issued under VSV.

This strengthens your position to reopen the appeal, which is your most viable legal route.

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