REGULATORY UPDATES PRESS RELEASE, DATED 29-08-21
CBDT extends last date for making payment without additional charge under ‘Vivad se Vishwas’ by one month
Editorial Note: The CBDT, considering the difficulties being faced in issuing and amending Form no 3, has decided to extend the last date of payment of the amount (without any additional amount) under ‘Vivad se Vishwas’ from 31-08-21 to 30-09-21. However, the last date for making payment (with additional amount) hasn’t been changed. It would besame as notified earlier, i.e., 31-10-21.
CIRCULAR NO. 16/2021, DATED 29-08-2021
CBDT extends due dates for filing of various forms
Editorial Note: Due to the difficulties reported by the taxpayers & other stakeholders, the CBDT has issued Circular No. 16/2021 for extending the due dates for e-filing of certain forms under the Income-tax Act, 1961. The due date for filing of application for registration or approval under Section 10(23C), 12A, 35 and 80G also stands extended to 31st March 2022.
NOTIFICATION F.NO. 370142/47/2021-TPL, DATED 28-08-2021
CBDT releases draft Rule & Forms to implement amendments made by TLA 2021; invites public comments
Editorial Note: The CBDT has proposed to insert a new Rule 11UE along with Forms 1 to 4 which specify the conditions to be fulfilled and the process to be followed to give effect to the amendments made by the Taxation Law (Amendment) Act, 2021 [TLA 2021]. TLA 2021 has been enacted to provide relief to certain entities impacted by the retrospective amendments made by the Finance Act 2012 relating to indirect transfer of assets situated in India.
PRESS RELEASE, DATED 27-08-2021
Income-Tax Dept. conducts searches in Rajkot and Visakhapatnam
Editorial Note: The Income-tax dept. has carried out search operations on group based in Rajkot and Visakhapatnam. Group based in Rajkot is among Gujarat’s prominent real estate builders & developers and is actively engaged in real estate, construction and land trading businesses. The search and seizure operation has resulted in detection of concealment of income in excess of Rs. 300 crore.
NOTIFICATION NO. G.S.R. 578(E), DATED 18-08-2021
CBDT notifies Rules prescribing ‘any other person’ to verify ITR & appear before authorities for Co./LLP
Editorial Note: The CBDT has inserted two new Rules, i.e., Rule 12AA & Rule 51B to the Income-tax Rules, 1962. Rule 12AA prescribes ‘any other person’ who shall verify Income-tax Returns in case of companies and Limited Liability Partnership (LLP). Similarly, Rule 51B prescribes ‘any other person’ who shall be treated as authorised representative before any income-tax authority.
President Ram Nath Kovind gives assent to the Taxation Laws (Amendment) Act, 2021
Editorial Note : The Taxation Laws (Amendment) Bill, 2021has received the assent of the President, Shri Ram Nath Kovind, on 13th August, 2021. The Taxation Laws (Amendment) Act, 2021 (No. 34 of 2021) has revoked the retrospective applicability of the amendments made in Section 9 by the Finance Act, 2012
CIRCULAR NO. 1/2021-22/439, DATED 9-8-2021
NFAC issues SOPs for Penalties under Faceless Penalty Scheme, 2021
Editorial Note: National Faceless Assessment Centre, Delhi, has issued Standard Operating Procedures (SOPs) with the approval of CBDT for completing the penalties under the Faceless Penalty Scheme, 2021.
NOTIFICATION NO. G.S.R. 551(E), DATED 10-08-2021
CBDT notifies Rule for computation of tax relief on Book Profits increased due to APA/Secondary Adjustments
Editorial Note: The Finance Act, 2021 has inserted a sub-section (2D) to Section 115JB to provide that AO, on an application by the assessee, shall re-compute book profit of the past years and tax payable thereon if assessee’s current year’s income has increased due to repatriation on account APA or secondary adjustment. The CBDT has notified Rule 10RB prescribing manner for computation of relief in tax payable under section 115JB(1) due to operation of newly inserted sub-section (2D) of section 115JB.
NOTIFICATION NO. G.S.R. 514(E), DATED 29-07-2021
CBDT omits certain rules & Forms; Board to specify e-filing of forms which are prescribed in Appendix II
Editorial Note: The CBDT has omitted certain rules and forms notified in Appendix II. However, any proceedings pending before income-tax authority or court shall be continued & disposed of in accordance with such rules and forms.
Further, the PDGIT (Systems) /DGIT (Systems) may specify any of the Forms, returns, statements, etc., prescribed in Appendix II, which shall be furnished electronically.
NOTIFICATION NO. G.S.R. 545(E), DATED 09-08-2021
CBDT notifies rules to compute exemption & income taxable at concessional rates in hands of specified fund
Editorial Note: The CBDT has inserted two new rules, i.e., Rule 21AI and 21AJ in the Income-tax Rules, 1962. Rule 21AI provides for manner for computation of exempt income of specified fund for the purposes of section 10(4D). Whereas Rule 21AJ deals with determination of income of specified fund attributable to units held by non-residents undersection 115AD(1A).Specified funds means Category III AIF, located in IFSC, and in which all units other than unit held by a sponsor or manager are held by non-residents.
PRESS RELEASE, DATED 09-8-2021
‘Vivad Se Vishwas’ scheme settles Rs. 99,756/- crore of disputed tax amount: FinMin
Editorial Note : The Union Minister of State for Finance Shri Pankaj Chaudhary in a written reply to a question in Lok Sabha has shared the status of declarations filed under Vivad Se Vishwas Scheme. A total of Rs. 99,756 crore of disputed tax amount has been settled as per declaration filed under the Scheme.
NOTIFICATION NO. S.O. 3138(E) & S.O. 3139(E), DATED 04-08-2021
CBDT notifies certain entities for exemption under section 10(46)
Editorial Note: The Central Board of Direct Taxes (CBDT) has notified ‘National Council of Science Museums’ and ‘Real Estate Regulatory Authority’ for the purposes of the clause (46) of section 10 of the Income-tax Act, 1961.
NOTIFICATION NO. S.O. 3114(E), DATED 03-08-2021
CBDT notifies ‘Ontario Inc.’ as pension fund for Sec. 10(23FE) exemption.
Editorial Note: The Central Board of Direct Taxes (CBDT) has notified pension funds namely, Ontario Inc., for the purpose of exemption under section 10(23FE). The notified funds shall be eligible to claim exemption in respect of investment made in India on or before 31-03-2024 subject to prescribed conditions.
RECENT JUDICIAL RULINGS ON INCOME TAX
SECTION 10(23C)(vi) OF THE INCOME-TAX ACT, 1961 – EDUCATIONAL INSTITUTIONS
Notification No. SO 3015(E), dated 5-11-2019 came into effect from 5-11-2019 – Aurora Educational Society v. Principal Commissioner of Income Tax (Central), Hyderabad – [2021] 128 taxmann.com 380 (Hyderabad – Trib.)
SECTION 14A OF THE INCOME-TAX ACT, 1961 – EXPENDITURE INCURRED IN RELATION TO INCOME NOT INCLUDIBLE IN TOTAL INCOME
General: Disallowance under section 14A read with rule 8D cannot exceed exempt income earned by assessee during year – Jaswantlal J. Shah v. ACIT, Central Circle-32, Mumbai – [2021] 128 taxmann.com 378 (Mumbai – Trib.)
SECTION 23 OF THE INCOME-TAX ACT, 1961 – INCOME FROM HOUSE PROPERTY – ANNUAL VALUE
Others: Where Tribunal upheld additions on account of deemed rental income from two properties of assessee in earlier assessment years 2008-09 and 2009-10, in absence of any change in facts, same was to upheld during year as well – Jaswantlal J. Shah v. ACIT, Central Circle-32, Mumbai – [2021] 128 taxmann.com 378 (Mumbai – Trib.)
SECTION 68 OF THE INCOME-TAX ACT, 1961 – CASH CREDIT
Bank Deposits: Where assessee had received certain amount in cash in her bank account, since assessee had not given any evidence to prove that this was not her turnover, Assessing Officer was justified in treating entire deposits as assessee’s turnover and assuming net profit thereupon at rate of 5 per cent – Smt. Uma Mandal v. Income Tax Officer, Ward 5(4), Jaipur – [2021] 128 taxmann.com 369 (Jaipur – Trib.)
Reassessment: Where Assessing Officer issued a reopening notice against assessee on ground that an information was received that assessee had deposited certain amount in cash in her bank account but did not file return ofincome,since Assessing Officer reopened assessment after recording due reasons and after following due process and such information available before Assessing Officer was relevant and afforded a nexus to formation of prima facie belief that income chargeable to tax had escaped assessment in hands of assessee, impugned reopening notice was justified – Smt. Uma Mandal v. Income Tax Officer, Ward 5(4), Jaipur – [2021] 128 taxmann.com 369 (Jaipur – Trib.)
SECTION 69C OF THE INCOME-TAX ACT, 1961 – UNEXPLAINED EXPENDITURE
Bogus Purchases: Where Assessing Officer on basis of an information received from Sales Tax Department that assessee had obtained bogus purchase bills of certain amount from various dealers who were declared as hawala operators made addition to income of assessee, since Assessing Officer accepted sales declared by assessee and without purchases there could not be sales, addition on account of gross profit embedded in such bogus purchases was to be restricted to 6 per cent – Jaswantlal J. Shah v. ACIT, Central Circle-32, Mumbai – [2021] 128 taxmann.com 378 (Mumbai – Trib.)
Bogus Purchases: Where post search operation upon company in which assessee was a director, assessee admitted certain undisclosed income of company on basis of incriminating material found and seized during search, since income/entries in such seized material belonged tocompany, impugned additions made in hands of assessee on account of such undisclosed income of company was unjustified and same was to be deleted – Joint Commissioner of Income Tax Central Circle 1(3), Hyderabad v. Narayana Reddy Vakati – [2021] 128 taxmann.com 377 (Hyderabad – Trib.)
SECTION 127 OF THE INCOME-TAX ACT, 1961 – INCOME-TAX AUTHORITIES – POWER TO TRANSFER CASES
Prior intimation of transfer: Where case of assessee was transferred from one Assessing Officer to another Assessing Officer within same city, in view of provisions of sub-section (3) of section 127, there was no statutory requirement for notice or prior intimation to be given to assessee before order of transfer – Jaswantlal J. Shah v. ACIT, Central Circle-32, Mumbai – [2021] 128 taxmann.com 378 (Mumbai – Trib.)
SECTION 144B OF THE INCOME-TAX ACT, 1961 – FACELESS ASSESSMENT
Personal hearing : Where assessee requests for a personal hearing before passing final assessment order under section 143(3), read with section 144B, officer in-charge, under provisions of clause (viii) of section 144B(7), would have to, ordinarily, grant apersonal hearing – LemonTree Hotels Ltd. v. National Faceless Assessment Centre Delhi – [2021] 128 taxmann.com 409 (Delhi)
SECTION 241 OF THE INCOME-TAX ACT, 1961 – REFUND – POWER TO WITHHOLD, IN CERTAIN CASES
Condition Precedent: SLP dismissed against High Court ruling that in absence of any cogent reasons justifying withholding of refund due to assessee under section 143(1), approval granted by Principal Commissioner for withholding such refund under section 241A was unjustified – Additional Commissioner of Income-tax v. Ericsson India (P.) Ltd. – [2021] 128 taxmann.com 418 (SC)
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