INCOME TAX REGULATORY UPDATES
NOTIFICATION NO. 118/2021/F. NO. 370142/47/2021-TPL, DATED 01-10-2021
CBDT notifies rules for implementing amendments made in provisions of indirect transfer of Indian assets
Editorial Note: Taxation Laws (Amendment) Act, 2021 provided that no tax demand shall be raised on basis of amendment to Section 9 of Income-tax Act vide Finance Act, 2012 for any offshore indirect transfer of Indian assets before 28-05-2012. The CBDT has notified Rule 11UE and Rule 11UF for implementing this amendment. Rule 11UE provides for specified conditions to claim relief and Rule 11UF provides form and manner of furnishing undertaking for withdrawal of pending litigation, claiming no cost, damages, etc.
NOTIFICATION NO. G.S.R. 723(E), DATED 06-10-2021
Govt. notifies PM CARES for Children Scheme, 2021
Editorial Note: The Govt has notified PM CARES for Children Scheme, 2021 effective from 06-10-2021. The upfront lumpsum consideration in the account shall become Rs. 10 lakh when the accountant holder attains the age of 18 years.
MNEs will be subject to a minimum 15% tax rate from 2023; two-pillar solution agreed by 136 countries
Editorial Note: On 08-10-2021, the major reform of the international tax system was finalized as the OECD will ensure that Multinational Enterprises (MNEs) will be subject to a minimum 15% tax rate from 2023. This landmark deal was agreed by 136 countries and jurisdictions out of 140, representing more than 90% of global GDP.
NOTIFICATION NO. S.O. 4207(E), DATED 11-10-2021
CBDT exempts certain non-residents from furnishing ITR subject to fulfillment of conditions
Editorial Note: The Central Board of Direct Taxes (CBDT) has exempted certain non-resident persons from the requirement of furnishing of return of Income under section 139, subject to fulfillment of prescribed conditions. The benefit of exemption is available from Assessment Year 2021-22 onwards.
NOTIFICATION NO. G.S.R. NO. 737(E), DATED 13-10-2021
CBDT extends provisions of Rules 11UE & 11UF to Sec. 119 of Finance Act, 2012
Editorial Note: The TLA, 2021 has amended secti The TLA, 2021 has amended section 119 of the Finance Act, 2012 to provide that this Section shall cease to apply to the person who fulfils certain conditions, such as withdrawal or furnishing of undertaking for withdrawal of pending litigation etc. Later, theCBDT has notified final rules 11UE and 11UF to provide for the Form, manner and specified conditions in order to be eligible to claim relief under TLA 2021.
PRESS RELEASE, DATED 14-10-2021
Over 2 crore returns filed on new e-filing portal of Income-tax: CBDT
Editorial Note: The e-filing portal of the Income Tax Department (www.incometax.gov.in) has marked receipt of more than 2 crore Income Tax returns as on 13th October 2021. The new portal was launched on 7th June, 2021 and in the initial period taxpayers had reported glitches and difficulties in the functioning of the portal. However, the performance of the portal has substantially stabilized.
NOTIFICATION NO. G.S.R. 723(E), DATED 06-10-2021
Govt. notifies PM CARES for Children Scheme, 2021
Editorial Note: The Govt has notified PM CARES for Children Scheme, 2021 effective from 06-10-2021. The upfront lumpsum consideration in the account shall become Rs. 10 lakh when the accountant holder attains the age of 18 years.
MNEs will be subject to a minimum 15% tax rate from 2023; two-pillar solution agreed by 136 countries
Editorial Note: On 08-10-2021, the major reform of the international tax system was finalized as the OECD will ensure that Multinational Enterprises (MNEs) will be subject to a minimum 15% tax rate from 2023. This landmark deal was agreed by 136 countries and jurisdictions out of 140, representing more than 90% of global GDP.
NOTIFICATION NO. S.O. 4207(E), DATED 11-10-2021
CBDT exempts certain non-residents from furnishing ITR subject to fulfillment of conditions
Editorial Note: The Central Board of Direct Taxes (CBDT) has exempted certain non-resident persons from the requirement of furnishing of return of Income under section 139, subject to fulfillment of prescribed conditions. The benefit of exemption is available from Assessment Year 2021-22 onwards.
NOTIFICATION NO. G.S.R. NO. 737(E), DATED 13-10-2021
CBDT extends provisions of Rules 11UE & 11UF to Sec. 119 of Finance Act, 2012
Editorial Note: The TLA, 2021 has amended secti The TLA, 2021 has amended section 119 of the Finance Act, 2012 to provide that this Section shall cease to apply to the person who fulfils certain conditions, such as withdrawal or furnishing of undertaking for withdrawal of pending litigation etc. Later, the CBDT has notified final rules 11UE and 11UF to provide for the Form, manner and specified conditions in order to be eligible to claim relief under TLA 2021.
NOTIFICATION GSR NO. 750, DATED 21-10-2021
Govt. notifies Sovereign Gold Bond Scheme 2021-22
Editorial Note: The Government has notified Sovereign Gold Bond Scheme 2021-22. The Sovereign Gold Bonds will be issued in 4 tranches from November 2021 to March 2022. They will be sold through Scheduled Commercial banks, designated Post Offices, Stock Holding Corporation of India Ltd. (SHCIL), the authorized stock exchanges, and Clearing Corporation of India Limited (CCIL) or any other entity as may be approved by RBI.
CIRCULAR NO. 19/2021, DATED 26-10-2021
Sec. 10 (23FE) exemption is available only if source of investment in India is not from any borrowings: CBDT
Editorial Note: Sec. 10(23FE) exemption is available only if source of investment in India is not from any borrowings: CBDT
CIRCULAR NO. 18/2021, DATED 25-10-2021
Benefit of Sec. 36(1)(vii) available even if sugarcane price fixed by State Govt is more than price fixed by Central Govt
Editorial Note: The Central Board of Direct Taxes (CBDT) has clarified that the phrase ‘price fixed or approved by the Government’ in section 36(1) (xvii) includes price fixation by State Government through State-level Acts/Orders or other legal instruments that regulate
the purchase price for sugarcane. It also includes State Advised Price, which may be higher than the Statutory Minimum price/Fair and remuneration price fixed by Central Government.
NOTIFICATION NOS. S.O. 4443(E), S.O. 4444(E), DATED 25-10-2021
Govt. notifies Special Courts for Manipur, Goa, and Karnataka under Income-tax & Black Money Act
Editorial Note: The Central Government has notified the Special Courts for the State of Manipur, North Goa, South Goa, and Karnataka for the purposes of section 280A(1) of the Income-tax Act, 1961 and section 84 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015
ORDER F.NO.225/155/2020/ITA-II, DATED 26-10-2021
CBDT authorizes DGIT (Systems) to upload assessee’s financial information in Form 26AS
Editorial Note: The CBDT has authorized the Director-General of Income-tax (Systems) to upload various financial information related to the assessee in Form 26AS, within three months from the end of the month in which the information is received by her/him. Such financial information includes Foreign remittance reported in Form 15CC, info. of TDS statement, interest on income-tax refund, etc.
PRESS RELEASE, DATED 26-10-2021
Tax Dept. conducts searches in ‘Punjab’; unaccounted income of Rs. 150 crore found
Editorial Note: The Income-tax Department has carried out search and seizure operations in the cases of two groups based in Punjab. The group is engaged in Cycle business and was found to be involved in suppression of income by showing bogus intra-group transactions within group concerns. The search action has led to detection of unaccounted income of about Rs. 150 crore
Delhi High Court notifies rules for video conferencing; allows public to view court proceedings
Editorial Note: The Delhi High Court has notified ‘High Court of Delhi Rules for Video Conferencing for Courts 2021’. Video conferencing facilities may be used at all stages of judicial proceedings and proceedings conducted by the Court. The rules also allowed persons who are not parties to the case to view the proceedings.
RECENT JUDICIAL RULINGS ON INCOME TAX
SECTION 9 OF THE INCOME-TAX ACT, 1961 – INCOME – DEEMED TO ACCRUE OR ARISE IN INDIA
Business profits – Repair and maintenance services : Where assessee was rendering services by way of monitoring under-sea cable systems to company (TSL), standby maintenance charges received by assessee from TCL could not be assessed as FTS but as its ‘business income’ and receipts of standby maintenance charges from TCL had to be calculated on basis of apportionment of cable length in India vis-a-vis worldwide cable length – Reliance Globalcom Ltd. v. Deputy Commissioner of Income-tax (IT) 4(1)(1), Mumbai – [2021] 131 taxmann.com 260 (Mumbai – Trib.)
SECTION 37(1) OF THE INCOME -TAX ACT, 1961 – BUSINESS EXPENDITURE – ALLOWABILITY OF
Provident fund, contribution to unrecognized provident funds : Notice issued in SLP filed against order of High Court that contribution made towards superannuation fund was to be treated as business expenditure and, thus, same was to be allowed as deduction under section 37(1) even though said fund was unapproved under Employee’s Provident Funds Act, 1952 –
Commissioner of Income-tax, Chennai v. Tamilnadu Maritime Board – [2021] 131 taxmann.com 251 (SC)
SECTION 48 OF THE INCOME-TAX ACT, 1961 – CAPITAL GAINS – COMPUTATION OF
Deductions – Freehold conversion charges : Where assessee owner/inherent-lessee of a leased land entered into an agreement to sell said land and there was a clear condition in agreement to sale that said land should be converted by assessee from leasehold into freehold to perfect ownership title of buyer in land and agreed sale consideration was inclusive of amount of freehold conversion charges, such conversion charges towards improvement of title to land or for removing impediment in transfer/sale of land which were borne by assessee seller was to be deducted while computing LTCG chargeable to tax on sale of land by assessee – Sanjay Majumdar v. Principal Commissioner of Income-tax, Allahabad – [2021] 131 taxmann.com 265 (Allahabad – Trib.)
SECTION 194J OF THE INCOME-TAX ACT, 1961 – DEDUCTION OF TAX AT SOURCE – FEES FOR PROFESSIONAL OR TECHNICAL SERVICES
Where assessee was held to be an ‘assessee in default’ as it had entered into an agreement with Karnataka Industrial Area Development Board (KIADB) for acquiring land for implementation of Bangalore Metro Rail Project and made payment, but did not deduct tax at source, in view of fact that Liability to deduct tax would arise only if payment was made towards service charges by assessee which attracts tax liability, matter was to be remanded back to Tribunal to determine said aspect – Bangalore Metro Rail Corporation Ltd. v. Deputy Commissioner of Income-tax, Circle-16(1) – [2021] 131 taxmann.com 322 (Karnataka)
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