TAXVANI

Purchase of Property in the name of Son eligible for Capital Gain Exemption: ITAT

In an assessee-friendly ruling, the Income Tax Appellate Tribunal (ITAT), Delhi bench has recently allowed capital gain exemption under section 54 of the Income Tax Act, 1961 to the assessee for the purchase of new property in the name of his son’s name. The Tribunal, while delivering the order, observed that the exemption is allowable since the capital gain from the sale of the old asset was used for investing in the name of a person who has a direct relationship with the assessee.

Before the authorities, the assessee claimed that has purchased the new house in the name of the youngest son. According to the assessee, the purchase of property in the name of the son was acquired by the assessee himself through the consideration received from the sale deed of an earlier old property. The bank statement and the cheque issued to the builder as well as the confirmation received from the builder demonstrated that the payment was made by the assessee for purchase of new property within the stipulated time as prescribed under section 54.

The Tribunal observed that the benefit of the income tax act and its provisions related to exemption and deduction has to be taken into account while computing the income of the assessee and it is the proper procedure on the part of the Assessing Officer to follow all the aspect of taxation within the corners of Income Tax Act.

“As regards the name under whom the property is purchased, it can be seen that the son of the assessee is a direct relation and as per the Hon’ble Delhi High Court decision in case of CIT(A) Vs. Kamal Vahal 351 ITR 4 where the assessee purchased a new house in name of his wife, the claim under Section 54 is held valid. Thus, the exemption could not be denied if the entire investment had come out of the proceeds of an old property. Thus, the order of the CIT(A) is not justified in light of the decision in case of Kamal Vahal,” the Tribunal said.

Read more at: https://www.taxscan.in/purchase-property-name-son-eligible-capital-gain-exemption-itat/51948/

Refer: ITA NO. 2754/DEL/2019

3 Infosys employees arrested in Bengaluru for taking bribes to process I-T refunds

Three Infosys employees, attached to the Income Tax department's Centralised Processing Centre (CPR) in Bengaluru, were arrested for allegedly taking bribes from taxpayers for the speedy processing of their tax refund, police said on Sunday.

The Central government had approached Infosys to develop a “next generation tax filing system” in January 2019. The system was to reduce income tax processing time from 63 days to just one day, ET reported.

Police arrested Renukakunta Kalyan Kumar, aged about 26 years, Deveeswar Reddy, 28 years old, and Prakash, who is also 26 years old, in connection with the crime. They are currently in judicial custody.

According to the police, the main accused, Renukakunta, was attached to the CPC's data division and had allegedly demanded money over the phone for processing their income tax refund claims at the earliest. He then allegedly collected the money through his friends, from some major taxpayers, whom he had contacted. The police also alleged that the accused had brazenly found the personal information, and then contacted those who had high tax returns.

The Electronics City police have registered a case of cheating and criminal breach of trust against the accused. The police suspect that the trio may have made up to Rs 15 lakh so far as commission from taxpayers. The police had recovered about Rs 3 lakh from the scamsters, and were trying to determine since when they have begun their operations, Times of India reported.

He would allegedly charge taxpayers 4% of the refund money as his commission, the police added.

The scam came to light when one of the taxpayers refused to pay the money to the Infosys employee. He shared the audio recording of his conversation with the main accused with Income Tax officials. The department held an internal inquiry, and then approached the police.

Refer:https://www.thenewsminute.com/

Any Amount Paid in pursuance of a Declaration made under Vivad se Vishwas Scheme shall not be Refundable under any Circumstances: CBDT

The Central Board of Direct Taxes ( CBDT ) has clarified that any amount paid pursuance of a declaration made under Vivad se Vishwas Scheme shall not be refundable under any circumstances.

The CBDT clarified issues related to the procedure that the DA shall determine the amount payable by the declarant within fifteen days from the date of receipt of the declaration and grant a certificate to the declarant containing particulars of the tax-arrear and the amount payable after such determination.

The declarant shall pay the amount so determined within fifteen days of the date of receipt of the certificate and intimate the details of such payment to the DA in the prescribed form. Thereafter, the DA shall pass an order stating that the declarant has paid the amount. It may be clarified that 15 days is an outer limit.

The DAs shall be instructed to grant a certificate at an early date enabling the appellant to pay the amount on or before 31 st March 2020 so that he can take benefit of reduced payment to settle the dispute. and thereupon the DA shall pass an order stating that the declarant has paid the amount.

The CBDT also said that under the amended procedure no appeal is required to be withdrawn before the grant of certificate by DA. The appellant is required to withdraw appeal or writ or special leave petition pending before the appellant forum and submit proof of withdrawal with an intimation of payment to the DA as per the same clause.

As per clause 6, subject to the provisions of clause 5, the DA shall not institute any proceeding in respect of an offense or impose or levy any penalty or charge any interest under the Income-tax Act in respect of tax arrears. This shall be reiterated in the order under section 5(2) passed by DA and DA can amend his order to rectify any patent error.

As per clause 4(7), no appellate forum or arbitrator, conciliator or mediator shall proceed to decide any issue relating to the tax arrears mentioned in the declaration in respect of which order is passed by the DA or the payment of sum determined by the DA.

The CBDT further said that once the declaration is filed under Vivad se Vishwas, and for financial difficulties, payment is not made accordingly, the declaration be null and void.

The CBDT also clarified that the demand in case of an assessee has been reduced partly or fully by giving appeal effect to the order of appellate forum, the amount payable under Vivad se Vishwas be adjusted after getting the proof of payment of the amount payable, the AO shall pass order under the relevant provisions to create demand in case of assessee against which the amount payable shall be adjusted.

Read more at: https://www.taxscan.in/any-amount-paid-pursuance-declaration-made-under-vivad-se-vishwas-scheme-shall-refundable-under-any-circumstances-cbdt/51749/

Punjab and Haryana HC grants Bail to Advocate allegedly involved in GST Scam

The Punjab and Haryana High Court has granted bail to an Advocate who was allegedly involved in registering bogus firms for performing GST scam.

A secret information was received about the applicants Rajesh Mittal, Inder Partap Singh and Manish that they were creating bogus firms and by transacting with bigger firms, they were getting huge amounts of money deposited in the account numbers of the said fake bogus firms so as to save GST and are thus causing huge loss to the State Exchequer on account of loss of revenue. The information further contained that the accused were moving about in a car along with laptops and were waiting for someone near T-point railway line grain market., Chandni Bagh, Panipat District. The police swung into action and were able to apprehend the aforesaid accused Rajesh Mittal, Inder Pratap Singh and Manish. On searching the car, Laptops, Cheque Books, Fake stamps of ETO, Fake rubber-stamps of DTC and Files of bogus firms were also recovered.

The car was found to be registered in the name of Vipul Jindal, who happens to be ‘jija’ (brother-in-law) of Rajesh Mittal. During the course of the investigation, the police were able to unearth the entire racket of evasion of GST.

It was found that Rajesh Mittal was the kingpin who issued bogus bills purported to have been issued by one M/s Lalit Trading Company, which was in fact out of business. Such bogus bills were issued in favour of 18 firms in respect of a bogus transaction of sale of yarn. The said 18 firms had been got incorporated/registered by associating persons of the status of rickshaw pullers etc. and were not actually businessmen. It was further found that in the bills issued by M/s Lalit Trading Company in favour of the said 18 bogus firms (non-functional firms), GST was also shown to have been charged.

The Advocate arrested in connection, Satnarain, had submitted that his services were hired by Rajesh Mittal for the purpose of getting some firms registered and he had rendered professional consultancy and assistance in the matter of incorporation/ registration of firms and had charged some nominal professional fee which cannot be said to be part and parcel of the alleged scam of evasion of GST. Justice Guruvinder Singh Gill while disposing of the petition held, “In view of the aforesaid discussion, the complicity of the kingpin Rajesh Mittal and also of Manish, owner of M/s Ansh Hospitality and of petitioner Inder Partap Singh, owner of M/s Shree Bala Ji Wooltax, is clearly evident. Keeping in view the enormity of the scam and the colossal loss caused to the State exchequer, which has lost GST, this Court does not find any ground for grant of bail. The petitions on their behalf, as such, are dismissed. As far as the petitioner Satnarain is concerned, it is not disputed that he is an Advocate by profession. It appears that he had rendered his professional services and assistance for the purpose of incorporation of the firms. At this stage, it cannot be said that he had joined hands with Rajesh Mittal or as the beneficiary of any amount other than his professional fee. In any case, since he has already been behind bars since the last about 8 months, his further detention will not serve any useful purpose. The petition on his behalf, as such, is accepted and the petitioner-Satnarain is ordered to be released on regular bail on his furnishing bail bonds/surety bonds to the satisfaction of learned trial Court/Chief Judicial Magistrate/Duty Magistrate concerned.”

Taxscan had earlier reported about the ruling of the Punjab and Haryana High Court itself wherein it ruled immunity from Arrest of Chartered Accountant or Advocates who had filed Returns but are not beneficiary or part of fraud without any Corroborative Evidence.

Read more at: https://www.taxscan.in/punjab-haryana-hc-grants-bail-advocate-allegedly-involved-gst-scam/50976/

CBDT to Felicitate Outstanding Work of Income Tax Officers in E-Assessmen

The Central Board of Direct Taxes (CBDT), in order to appreciate and encourage the outstanding work of the Income Tax Officers or officials in e-assessment, Central Board of Direct Taxes (CBDT) will felicitate the Income Tax Officer and the criteria are specified for the purpose of felicitation.

The felicitation started from January 2020 onwards and every month the best performing Income Tax Officer The Central Board of Direct Taxes (CBDT), in order to appreciate and encourage the outstanding work of the Income Tax Officers or officials in e-assessment, Central Board of Direct Taxes (CBDT) will felicitate the Income Tax Officer and the criteria are specified for the purpose of felicitation. achieving excellence in the prime areas such as collection, investigation, audit, administration, and innovation in the organizational functioning will be selected for felicitation.

The Committee of Commissioners will undertake the selection process. The committees will be formed in each region and the name of the officers will be displayed in the respective regions. The following 5 categories of officers will be selected for felicitation:

Investigator of the month,

Revenue collector of the month,

Administrator of the month,

Auditor of the month, and

Innovator of the month.

Apart from monthly selection, at the end of each financial year, the said Committee shall also select one or team of Officers in each of the above-mentioned committees.

Further, these officers will be felicitated on the Income Tax Day, in a public function which is organized in the region and the name along with a photograph of such officers will be displayed on the ‘wall of fame’ in Income Tax Achieve or at any prominent place at NADT every year. Further, the outstanding work of the officers will be documented for the purpose of training.

The outstanding work of the Income Tax Officers will be considered for the inclusion in ‘Let us share’, provided that there must be selected by the committee for this purpose.

.Thus for this purpose, various criteria are been fixed such as nomination criteria, eligibility, nomination procedure, selection procedure, etc.

Read more at: https://www.taxscan.in/cbdt-felicitate-outstanding-work-income-tax-officers-e-assessment/49984/

Bail rejected as assessee booked for serious allegation of wrongful availment of ITC of more than Rs. 40.53 Crores

GST : Where assessee for offences punishable under section 132(1)(b), (c) and (d) was in custody and serious allegation against him was that he had wrongfully availed input tax credit of Rs. 40.53 crores, application for grant of bail deserved to be dismissed

■■■

[2020] 114 taxmann.com 164 (Rajasthan)

HIGH COURT OF RAJASTHAN

Bharat Raj Punj

Central Goods & Service Tax Commissionerate*

ABHAY CHATURVEDI, J.

S.B. CRIMINAL MISC. BAIL APPLICATION NO. 16341 OF 2019

DECEMBER 6, 2019

Section 132 of the Central Goods and Services Tax Act, 2017/Section 132 of the Rajasthan Goods and Services Tax Act, 2017 - Offences - Punishments for certain offences - Assessee for offences punishable under section 132(1)(b), (c) and (d) was in custody for last more than two months - Serious allegation against assessee was that he had wrongfully availed input tax credit of more than Rs. 40.53 crores involved on supply of goods - Assessee filed application for grant of bail - Whether looking to over all facts that there were serious allegations against assessee of wrong availment of input tax credit of more than Rs. 40.53 crores involved on supply of goods and matter was still at stage of investigation, assessee was not entitled for grant of bail - Held, yes - Whether bail application deserved to be dismissed - Held, yes [Paras 6 and 7] [In favour of revenue]

(NR)

P.P. Choudhary, Sr. Counsel, Sanjay Jhanwar, Kunal Jaiman, Sandeep Kapoor, Ms. Apoorva Pandey, G.G. Kashyap, R.P. Khurana, Rahul Lakhwani, and Atul Saxena, for the Petitioner. Siddharth Ranka, for the Respondent.

ORDER

1. The present Misc bail application under section 439 Cr.P.C. is preferred by the Accused/petitioner in the matter of Complaint Case No. IV(6)78/AE/Alwar/2019/Part-II dated 22.10.2019 registered at Central Goods and Services Tax Commissionerate, Alwar (Raj.) for the offences under sections 132 (1)(b)(c) & (d) of the Central Goods Services Tax Act, 2017 (hereinafter referred to as 'Act of 2017').

2. Heard learned counsel for the parties.

3. Learned counsel for the petitioner submitted that the accused petitioner has been falsely implicated in this case as no offence under section 132(1)(b)(c) & (d) of the Act, 2017, is made out. It is further submitted that the Department has invoked the provision of section 132 of the Act of 2017, without first determining the tax liability and thereby concluded that the petitioner has committed the alleged offence. No show cause notice was issued to the petitioner. The allegations made against the accused petitioner goes to show that bailable offence is made out as provided under section 132(4) read with section 132(5) of the Act. In this connection, learned counsel for the petitioner drawn the attention of the Court to the arrest memo. It was submitted that in the arrest memo, the word 'fraudulently' has been mentioned which shows that the offence alleged to have been committed by the accused petitioner is bailable offence. It was further submitted that the period under investigation for the alleged offence is from July, 2017 to March, 2018 when the petitioner was not Managing Director of the Company. The petitioner was never involved in the day-to-day affairs of the Company and the same was managed by his father, Shri Brij Raj Punj. The petitioner was never aware of the commission of offence. There is no cogent evidence to connect the accused petitioner with the alleged offence. It was also submitted that out of the alleged demand by the department, the company already revised the credit by way of issuing Credit Note and as a result the position has become neutral. The Company has already paid an additional amount of Rs. 4 crore without there being any demand by the department. It was further submitted that the petitioner has no criminal antecedents and he is in custody for the last more than two months. He implored the Court to draw the bail application.

4. On the other hand, learned counsel for the respondent-Department has opposed the bail application and submitted that the petitioner-Company has availed GST Input Tax Credit of Rs.40.53 crores on the basis of invoices issued by the bogus company without receipt of any goods and wrongly availed inadmissible input tax credit of more than Rs. 40.53 Crores involved on supply of goods valued at Rs.225.19 crores without receiving the goods. It was further submitted that if the amount of input tax credit wrongly availed or utilized exceeded Rs.5 crores, such offences are punishable with imprisonment for a term which may extend to five years and with fine and such offences are cognizable and non-bailable. It was further submitted that the investigation in the case is in progress and still not completed. It was submitted that the petitioner being Deputy Managing Director of the Company at the relevant time is deemed to be involved in all activities of the Company. It was submitted that the bail applications of the co-accused persons were dismissed earlier. It was vehemently submitted that allegation made against the petitioner is of serious nature and affect overall economy of the country and in such matters court should not be lenient.

5. I have considered the submissions raised at the Bar and perused the material placed before the Court.

6. Looking to the over all facts and circumstances of the case, gravity of the offence specially the fact that there are serious allegations against the petitioner of wrong availment of input tax credit of more than Rs. 40.53 Crores involved on supply of goods, the matter is still at the stage of investigation and having regard to the seriousness of the offence and without expressing any opinion on the merits of the case, I am not inclined to grant benefit of bail to the accused-petitioner.

7. Consequently, the bail application filed under Section 439 Cr.P.C. is dismissed.

Exp. incurred by builder on brokerage and commission on booking of properties allowable; SLP dismissed

Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of (Brokerage expenses) - Assessee, a builder, incurred expenditure towards brokerage and commission - Assessing Officer disallowed said expenditure on ground that during relevant year conveyance of sale deeds were not executed - Tribunal, however, held that expenses incurred on brokerage and commission on booking of properties being a finance/selling expenses were allowable in full - High Court upheld Tribunal's order - Whether, on facts, SLP filed against order of High Court was to be dismissed - Held, yes[In favour of assessee]

Refer:[2020] 114 taxmann.com 98 (SC) in the case of
Principal Commissioner of Income Tax-3

v.
DLF Home Developers Ltd.

Faceless tax assessment system prone to errors: HC

The Madras High Court in a recent order has opined that the faceless tax-assessment system “can lead to erroneous assessment, if officers are not able to understand the transactions and statement of accounts of an assessee without a personal hearing”.

The court, however, said electronic-assessment — introduced to curb cases of corruption and harassment of tax payers by officials— was a laudable initiative.

The HC made the observations while hearing a writ petition filed by a Coimbatore-based chit fund company against certain additions made by the assessing officer, over cash deposits of Rs 67.37 lakh made by the company during the demonetisation period.

The judge remarked that the assessing officer should have at least called for an explanation in writing before concluding that the amount collected and deposited by the petitioner was unusual.

The judge opined that the assessment proceeding under the changed scenario would require determination of facts by proper exchange and flow of correspondence between the tax payer and the assessing officer. “Since the assessment proceedings no longer involve human interaction and is based on records alone, the assessment proceeding should have commenced much earlier so that before passing assessment order, the respondent assessing officer could have come to a definite conclusion on facts after fully understanding the nature of business of the petitioner,” states the order.

According to the tax department’s case, Salem Sree Ramavilas Chit Company was unable to explain the cash deposits. The petitioner contended that this was subscribers’ money which it could not deposit with banks before the announcement of demonetisation. It said this was explained in the details furnished on February 17, 2017, in compliance with the requirements of the Reserve Bank of India.

“In my view, the petitioner has prima facie demonstrated that the assessment proceeding has resulted in distorted conclusion on facts,” the high court said. It set aside the tax department’s order on the additions and asked the assessing officer to pass a fresh order within 60 days.

The finance ministry introduced the faceless assessment in October last year. Of the 58,322 cases selected under this so far, it has served digitally signed notices on 48,000 people.

Read more at:
https://economictimes.indiatimes.com/news/economy/policy/faceless-tax-assessment-system-prone-to-errors-hc/articleshow/74204415.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Revised ‘Direct Tax Vivad se Vishwas Bill, 2020’ February 19, 2020 3329 Views

Tax disputes consume time, energy and resources both on the part of the Government as well as taxpayers. Moreover, they also deprive the Government of the timely collection of revenue.

The Finance Minister, Smt. Nirmala Sitharaman, in her budget speech, has proposed to bring a scheme similar to the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 to reduce the litigation in the direct taxes. This will not only benefit the exchequer to recover the blocked revenue but also the taxpayers to save time, energy and resources to be spent on unwanted litigations.

The Finance Minister has introduced the Direct Tax Vivad se Vishwas Bill, 2020 ('the Scheme') in the Lok Sabha on 05-02-2020 for dispute resolution related to direct taxes. As per media report, numerous of changes are made in the bill.

The highlights of the revised bill are discussed in the below paragraphs:

1) Who can avail the benefit under this scheme?

A taxpayer can avail of the benefit under the scheme in respect of Income-tax appeals pending before the appellate forum as on 31-01-2020. These appeals could be filed either by the taxpayer or by the Income-tax authority.

The following person shall also be eligible for the benefit under this scheme:

a) A person in whose case writ/special leave petition is pending before the High Court or the Supreme Court.

b) A person in whose case, an order has been passed by the Assessing Officer or appellate forum and time limit for filing an appeal against such order has not expired on or before 31-01-2020.

c) A person who has filed an objection with the Dispute Resolution Panel (DRP) under section 144C and no direction has been issued by DRP on or before 31-01-2020.

d) A person against whom directions have been issued by DRP on or before 31-01-2020 but the Assessing Officer has not yet passed an assessment order in pursuance of such directions.

e) A person who has filed an application for revision under section 264 and such application is pending on or before 31-01-2020.

2) How much tax is payable under the scheme?

The scheme provides two schedules for the payment of taxes:

Type of case	Amount payable up to 31-03-2020	Amount payable on or after 01-04-2020

*Cases relating to disputed tax, interest chargeable and penalty on such disputed tax*
If an appeal is filed by a taxpayer, in whose case search and seizure have occurred, and the disputed tax does not exceed Rs. 5 crores.	Amount of disputed tax plus 25% of disputed tax.	Amount of disputed tax plus 35% of disputed tax
If an appeal is filed by a taxpayer, in any other case.	Amount of disputed tax.	Amount of disputed tax plus 10% of disputed tax
If an appeal is filed by the department, in cases where search and seizure have occurred, and the disputed tax does not exceed Rs. 5 crores.	50% of disputed tax plus 12.5% of disputed tax	50% of disputed tax plus 17.5% of disputed tax
If an appeal is filed by the department, in any other case.	50% of disputed tax	50% of disputed tax plus 5% of disputed tax
Note: Where 25% or 35% or 17.5% or 12.5% or 10% or 5% of disputed tax, as the case may be, exceeds the total of interest and penalty, such excess amount shall be ignored.
*Cases relating to disputed interest, penalty and disputed fee*
If an appeal is filed by the taxpayer	25% of disputed interest, penalty or fee	30% of disputed interest, penalty or fee
If an appeal is filed by the department	12.5% of disputed interest, penalty or fee	15% of disputed interest, penalty or fee

3) What is disputed tax or interest or penalty?

A. 'Disputed Tax' in relation to an assessment year shall have the following meanings:

Nature of case	Disputed Tax

Where appeal, writ petition or special leave petition is pending before the appellate forum on or before 31-01-2020	Amount of tax (including surcharge and cess but excluding interest) payable if such appeal was to be decided against taxpayer
Where appeal, the writ petition has been passed on or before 31-01-2020 and time limit for filing appeal against such order has not expired	Amount of tax (including surcharge and cess but excluding interest) payable by the taxpayer after giving effect to such order
Where objections are pending before the DRP	Amount of tax (including surcharge and cess but excluding interest) payable by the taxpayer if DRP was to confirm variation proposed in the draft order
Where DRP issued directions but the Assessing Officer didn't pass an order on or before 31-01-2020	Amount of tax (including surcharge and cess but excluding interest) would have been payable by taxpayer had the order been passed by the Assessing Officer.
Where an application for revision under section 264 filed by the taxpayer is pending	Amount of tax (including surcharge and cess but excluding interest) payable by the taxpayer if the application was to be rejected
Where CIT(A) has issued an enhancement notice under section 251	Amount of tax (including surcharge and cess but excluding interest) payable by the taxpayer in respect of enhancement proposed in additions to amount payable relating to the disputed issue.
In cases where disputed tax is related to reduction of MAT/AMT credit or loss or depreciation, the taxpayer has an option either to include amount of tax (including surcharge and cess but excluding interest) related to loss in amount of disputed tax or carry forward the reduced MAT/AMT credit or loss or depreciation, in a manner to be prescribed.

B. 'Disputed interest' means any interest determined under the provisions of the Act (not being an interest charged or chargeable on disputed tax) against which appeal has been filed and pending before the appellate forum.

C. 'Disputed penalty' means any penalty determined under the provisions of the Act (not being a penalty levied or leviable on disputed income or disputed tax) against which appeal has been filed and pending before the appellate forum.

D. 'Disputed fee' any fee which is determined as per the provisions of the Act against which appeal has been filed and pending before the appellate forum.

4) How to file the declaration under the scheme?

Declaration under the scheme shall be filed before the designated authority. The relevant form for filing of such declaration shall be notified subsequently.

Upon receiving the declaration, the designated authority shall determine the amount payable by the taxpayer and grant a certificate within 15 days from the date of receipt of the declaration.

5) When the disputed amount has to be paid under the scheme?

The taxpayer shall be required to pay the determined amount within 15 days from the date of receipt of the certificate and also required to intimate the same to the designated authority in the prescribed form. In case the taxpayer has already made payment before filing of declaration, the excess amount paid by him shall be refunded. However, no interest shall be granted under provisions of section 244A.

In case a taxpayer has filed an appeal or petition before the appellate forum, he is required to withdraw such appeal/petition and furnish proof of such withdrawal along with the intimation of payment. The taxpayer also needs to withdraw the proceedings, if any, initiated by him for arbitration, conciliation or mediation. He is further required to furnish an undertaking waiving his right, whether direct or indirect, to seek or pursue any remedy or any claim in relation to the tax arrears. Upon receipt of such intimation, the designated authority shall pass an appropriate order.

6) Filing declaration does not amount to conceding tax position

It will be clarified in the bill that where any tax dispute has been settled under this scheme, it shall not be lawful to contend that the Income-tax authority or declarant has agreed in the decision on the disputed issue by settling it under this scheme.

7) What shall be the effect of the scheme on pending appeals?

Once taxpayer files declaration under the scheme, any appeal pending before the ITAT or CIT(A), in respect of the disputed income/disputed interest/disputed penalty/disputed fee, shall be deemed to have been withdrawn from the date on which certificate is issued by the designated authority.

No appellate forum or arbitrator, conciliator or mediator shall proceed to decide any issue relating to the tax arrears mentioned in the declaration in respect of which an order has been passed by the designated authority or the payment of a sum by the declarant has been made under the scheme.

The declaration made under the scheme shall be presumed not to have been made in the following circumstances:

a) If any material particulars furnished in the declaration is found to be false at any stage;

b) Taxpayer violates any of the conditions referred to in the scheme; or

c) Taxpayer acts in any manner which is not in accordance with the undertaking given by him while filing his declaration.

Once the declaration is presumed not to have been made, all the proceedings and claims which were withdrawn earlier shall be deemed to have been revived.

8) When the benefit of the scheme is not available?

This scheme shall not be available in respect of the following circumstances:

a) Tax arrears relating to an assessment year in respect of which an assessment has been made under section 153A or section 153C of the Act (assessment in case of search or seizure). However, the cases, where disputed tax does not exceed Rs. 5 crores, shall be eligible for the benefit of this scheme.

b) Tax arrears relating to an assessment year in respect of which prosecution has been instituted on or before the date of filing of the declaration;

c) Tax arrears relating to any undisclosed income from a source located outside India or an undisclosed asset located outside India;

d) Tax arrears relating to assessment or reassessment made on the basis of information received under an agreement referred to in section 90 or section 90A of the Act;

e) Any person in respect of whom an order of detention has been made under the provisions of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 on or before the filing of declaration. However, if such detention order has been revoked by the Advisory Board or set aside by a court of competent jurisdiction then such a person can file a declaration under the scheme;

f) Any person in respect of whom prosecution for any offence punishable under the following Acts or such person has been convicted of any such offence:

■ The Indian Penal Code (IPC),

■ The Unlawful Activities (Prevention) Act, 1967,

■ The Narcotic Drugs and Psychotropic Substances Act, 1985,

■ The Prevention of Corruption Act, 1988,

■ The Prevention of Money Laundering Act, 2002,

■ The Prohibition of Benami Property Transactions Act, 1988

g) Any person against whom enforcement of any civil liability has been instituted on or before the filing of the declaration; or

h) Any person notified under section 3 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 on or before the filing of declaration.

It must be noted that only those cases shall be excluded from this scheme where department has launched prosecution under IPC or for enforcement of any civil liability.

Refer:https://www.taxmann.com/fileopennew.aspx?Id=222330000000020266&mode=home&Page=CIRNO

Investment should be made within six calendar months & not 180 days for claiming benefit of section 54EC

Section 54EC, read with section 263, of the Income-tax Act, 1961 - Capital gains - Not to be charged on investment in certain bonds (Computation of time period) - Assessment year 2011-12 - Whether for purpose of section 54EC, term 'month' means calendar month and not period of 30 days - Held, yes - Assessee sold two properties vide sale deed, dated 15-2-2011 and deposited capital gain amount in REC Bond on 30-8-2011 - Whether six calendar months from date of sale deed would complete on 31-8-2011 and, therefore investment made by assessee on 30-8-2011 was within period of six months and assessee was entitled to benefit of section 54EC - Held, yes

Refer:[2020] 113 taxmann.com 586 (Kolkata - Trib.)

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