INCOME TAX REGULATORY UPDATES APRIL 2022
ORDER F.NO. 187/4/2021-ITA-I, DATED 10-03-2022
Cases not created on ITBA due to technical bugs/not having PAN to be excluded from Faceless Penalty Scheme: CBDT
Editorial Note :The CBDT has notified an exclusion to the cases where penalty shall not be imposed in a faceless manner. The Board has notified that penalty proceedings, in cases where pendency couldn’t be created on ITBA because of technical reasons or cases not having a PAN, shall remain outside the purview of Faceless Penalty Scheme 2021
CBDT releases MLI synthesised text for India- Iceland DTAA
Editorial Note : The Central Board of Direct Taxes (CBDT) has released the synthesised text for India- Iceland DTAA., incorporating the changes made by the MLI on the basis of respective positions taken by both the countries. The MLI provisions that are applicable are included in boxes in the relevant provisions of convention.
PRESS RELEASE, DATED 12-03-2022
8.10% interest rate recommended by EPF Board for Financial Year 2021-22; lowest in 4 decades
Editorial Note : The Central Board of Trustees, EPF, has recommended an 8.10% annual rate of interest credited on EPF accumulations in members’ accounts for the financial year 2021-22. This is the lowest interest rate in at least four decades.
CIRCULAR NO. 4/2022, DATED 15-03-2022
CBDT issues circular on TDS from salaries for the Financial Year 2021-22
Editorial Note :The Central Board of Direct Taxes (CBDT) has issued circular for deduction of tax at source from salaries. CBDT has explained the obligation of employers with regard to deduction of tax at source from salaries under section 192 of the Income-tax Act, 1961 for the Financial Year 2021-22 in a comprehensive manner.
ORDER F NO. 187/3/2020, DATED 17-03-2022
CBDT excludes cases getting time-barred on 31-03-22 from the Faceless Assessment regime
Editorial Note : The CBDT has notified another exclusion to cases where Assessment Order not to be passed under faceless assessment regime. The Board has notified that cases pending with Jurisdictional Assessing Officer as on 15-3-2022 or thereafter, for which the time limit for completion expires on 31-03-2022, shall be out of the purview of faceless assessment under section 144B if such cases cannot be completed within limitation period due to technical or procedural constraints.
CIRCULAR NO. 5/2022, DATED 16-03-2022
CBDT allows manual filing of Form no 3CF for an applicant seeking approval under Sec. 35
Editorial Note : Due to the non-availability of Form no. 3CF on the e-filing portal, the CBDT has allowed the applicants seeking approval under section 35(1)(ii)/(iia)/(iii) to file Form no 3CF physically. The Form can be filed manually till 30-09-2022 or till the availability of the Form for electronic filing on the e-filing website.
PRESS RELEASE, DATED 17-03-2022
Net Direct Tax collections for Financial Year 2021-22 increased by 48.41%: CBDT
Editorial Note : The figures of net Direct Tax collections for the Financial Year 2021-22, as of 16.03.2022, have shown an increase of 48.41% compared to the corresponding period of Financial Year 2020-21. The Net collections for the Financial Year 2021-21 are Rs. 13,63,038.3 crore as compared to Rs. 9,18,430.50 crore over the preceding financial year.
CIRCULAR NO. 6/2022, DATED 17-03-2022
CBDT condones delay in filing of Form 10-IC for Cos opted for Sec. 115BAA in AY 2020-21
Editorial Note :The CBDT has condoned the delay in filing Form 10-IC for Assessment Year 2020-21, which was required to be filed for Companies opting for the concessional tax regime under section 115BAA (subject to fulfilment of certain conditions).
UK suspends exchange of tax information with Russia and Belarus
Editorial Note : The Financial Secretary to the Treasury of the United Kingdom (UK), Lucy Frazer, has announced that the UK is freezing tax cooperation with Russia and Belarus. The UK is suspending all exchange of tax information with Russia and Belarus as part of the UK’s wider response to the Russian invasion of Ukraine
NOTIFICATION NO. S.O. 1440(E), DATED 28-03-2022
CBDT extends date of passing order under the Benami Act if limitation period falls between 20-03-2020 to 30-06-2021
Editorial Note : In exercise of the powers conferred by section 3(1) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions)
Act, 2020, the Central Board of Direct Taxes (CBDT) has extended the date of passing of any order under section 26(3) of the Benami Act to 30-09-2022. The extension has been given in those cases where the due date to pass the order falls between 20-03-2020 to 30-06-2021.
NOTIFICATION NO. S.O. 1400(E), DATED 28-03-2022
CBDT notifies Faceless Jurisdiction of Income-tax Authorities Scheme, 2022
Editorial Note : Section 130 empowers the Central Govt. to make a scheme to exercise powers and performance of certain functions, vesting jurisdiction with the Assessing Officer, the exercise of power to transfer cases or exercise of jurisdiction in case of change of incumbency in a faceless manner. Exercising such power, the Govt. has notified Income-tax Authorities Scheme, 2022, effective from 28-03-2022
NOTIFICATION NO. G.S.R. 229(E), DATED 29-03-2022
CBDT prescribes fees to be levied on person who fails to link PAN with Aadhaar by 31-03-22
Editorial Note : Every person who has been allotted PAN as of July 1, 2017, and is eligible to obtain an Aadhaar number shall link his PAN with Aadhaar by March 31, 2022. If the assessee fails to do so, the PAN allotted to the person shall be made inoperative.
A fee of Rs. 500 is levied if PAN-Aadhaar is linked by June 30, 2022, and Rs. 1000 in any other case.
NOTIFICATION NO. 18/2022, DATED 29-03-2022
CBDT notifies e-Assessment of Income Escaping Assessment Scheme, 2022
Editorial Note : Section 151A empowers the Central Government to notify the faceless Scheme to issue a reassessment notice, its sanction, and passing of order under section 148A. The CBDT has notified e-Assessment of Income Escaping Assessment Scheme, 2022, effective from 29-03-2022. The Scheme shall be applicable for assessment, reassessment or recomputation under section 147 and issuing notice under section 148.
Interest rates for small saving schemes unchanged for quarter April-June 2022: FinMin
Editorial Note : The interest rate for various small saving schemes for the first quarter of the Financial Year 2022-23, i.e., 01-04-2022 to 30-06-2022, shall remain unchanged from the current interest rates applicable for the fourth quarter of the Financial Year 2021-22.
NOTIFICATION NO. 20/2022, DATED 30-03-2022
Provisions of TCS u/s 206C(1G) not applicable to a non-resident Individual who is visiting India: CBDT
Editorial Note : Section 206C(1G) provides the collection of tax at source (TCS) from remittance under the Liberalized Remittance Scheme and on sale of an overseas tour package. The CBDT has notified that provisions of TCS under Section 206C(1G) shall not apply to an individual who is not a resident in India under section 6 and who is visiting India.
NOTIFICATION G.S.R NO. 231(E), DATED 30-03-2022
CBDT notifies ITR forms applicable for Assessment Year 2022-23
Editorial Note : The Central Board of Direct Taxes (CBDT) has notified Income-tax Return (ITR) Forms applicable for filing return of income for the Assessment Year 2022-23.
CIRCULAR NO. 8/2022, DATED 31-03-2022
CBDT extends due date of filing Form 10AB to seek registration/approval under Sec. 10(23C), 12A or 80G
Editorial Note : The application for registration or approval under Sections 10(23C), 12A or 80G is to be made in Form No. 10AB. Considering the difficulties in electronic filing of such a Form, the CBDT has decided that Form no. 10AB may be filed on or before September 30 2022, if the same is required to be filed by September 29 2022.
PRESS RELEASE, DATED 31-03-2022
Income-tax Dept. conducted search on ‘Hero Motocorp’; bogus expenses of more than Rs. 800 crore detected
Editorial Note : The Income-tax Department has conducted a search and seizure operation on a leading automobile manufacturer group on March 23, 2022. Various incriminating documents and digital evidence were found and seized during the search operation. Expenditure aggregating to more than Rs. 800 crore has been booked in the guise of purchasing services from a shell entity.
PRESS RELEASE, DATED 31-03-2022
CBDT signs 62 Advance Pricing Agreements in the Financial Year 2021-22
Editorial Note : The Central Board of Direct Taxes (CBDT) has entered into 62 Advance Pricing Agreements (APA) in FY 2021-22 with Indian taxpayers.
This includes 13 Bilateral APAs (consequent to Mutual Agreement between India and its treaty partners) and 49 Unilateral APAs. With this, the total number of APAs since the inception of the APA program has gone up to 421
RECENT JUDICIAL RULINGS ON INCOME TAX
SECTION 9 OF THE INCOME TAX ACT, 1961 – INCOME – DEEMED TO ACCRUE OR ARISE IN INDIA
Subscription received from Indian subscribers by Singapore-based co. for its CRM portal services is not ‘royalty’ u/s. 9(1)(vi) or Article 12 of DTAA – Salesforce.com Singapore Pte. v. Deputy Director of Income-tax, Circle-2(2) (International Taxation), New Delhi – [2022] 137 taxmann.com 3 (Delhi – Trib.)
SECTION 10(10D) OF THE INCOME-TAX ACT, 1961 – INSURANCE POLICY, SUM RECEIVED UNDER
Reassessment : Where reopening notice was issued on ground that amount of interest/bonus received by assessee on premature surrender of pension plan/annuity policies of LIC which was claimed as exempt under section 10(10D) by assessee was actually not exempted as per provision of section 80CCC(2), since no new/fresh tangible material came into possession of Assessing Officer subsequent to intimation under section 143(1), impugned reopening notice issued against assessee after four years from relevant year was unjustified – Ami Ashish Shah v. Income-tax Officer – [2021] 126 taxmann.com 236 (Gujarat)
SECTION 10(23C) OF THE INCOME-TAX ACT, 1961 – CHARITABLE/RELIGIOUS INSTITUTIONS
Explanation 2 : Explanation (2) inserted after Explanation 1 under section 10(23C) which provides that calculation of income required to be applied or accumulated during previous year shall be made without any set-off or deduction or allowance of any excess application of any of year preceding previous year is applicable from 1-4-2022 and will, accordingly, apply in relation to assessment year 2022-23 and subsequent assessment years – Deputy Commissioner of Income-tax,
(Exemption) v. UTI Institute of Capital Markets – [2022] 136 taxmann.com 258 (Mumbai – Trib.)
SECTION 11 OF THE INCOME-TAX ACT, 1961 – CHARITABLE OR RELIGIOUS TRUST – EXEMPTION OF INCOME FROM PROPERTY HELD UNDER
Application of income : A trust could be allowed to carry forward deficits of earlier years and set it off against surplus of subsequent years – Deputy Commissioner of Income-tax, (Exemption) v. UTI Institute of Capital Markets – [2022] 136 taxmann.com 258 (Mumbai – Trib.)
SECTION 80-IB OF THE INCOME-TAX ACT, 1961 – DEDUCTIONS – PROFITS AND GAINS FROM INDUSTRIAL UNDERTAKINGS OTHER THAN INFRASTRUCTURE D E V E L O P M E N T UNDERTAKINGS
Housing project : Assessee was entitled to deduction under section 80-IB on proportionate basis in respect of flats measuring less than 1500 square feet in a housing project developed by assessee – Commissioner of Income-tax v. Varun Developers – [2021] 126 taxmann.com 235 (Karnataka)
Housing project :Assessee would be entitled to deduction under section 80-IB(10) in respect of two flats even when they were combined and were measuring more than 1500 square feet after combining – Commissioner of Income-tax v. Varun Developers – [2021] 126 taxmann.com 235 (Karnataka)
SECTION 92B OF THE INCOME-TAX ACT, 1961 – INTERNATIONAL TRANSACTION – MEANING OF
Pledging shares with lender as collateral for loan to AE is an international transaction with AE & arm’s length compensation is to be determined for it – Virgo Valves & Controls Ltd. v. Deputy Commissioner of Income-tax – [2022] 137 taxmann.com 1 (Mumbai – Trib.)
SECTION 145 OF THE INCOME-TAX ACT, 1961 – METHOD OF ACCOUNTING – SYSTEM OF ACCOUNTING
Where assessee real estate builder and a developer, followed project completion method of accounting and offered its income to tax in subsequent assessment year 2007-08 instead of adopting percentage completion method and offering income in relevant assessment year 2006-07 as viewed by revenue, since either method of accounting finally lead to same results in terms of profits and, therefore, revenue neutral for assessment year in question, assessee was to be allowed to adopt project completion method – Commissioner of Income-tax v. Varun Developers – [2021] 126 taxmann.com 235 (Karnataka)
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