Income Tax Dept warns public against cash dealings of Rs 2 lakh or more saying that the receiver of the amount will have to cough up an equal amount as penalty.

CBDT Directive Reg Processing Of Returns U/s 143(1) Having Refund Claims

The Directorate of Income-tax (Systems) has issued an important directive dated 12.09.2019 on the subject of functionality for processing of returns having refund claims which were not processed within the time allowed u/s 143(1) due to some technical or other reasons


ITBA-Processing Instruction No 9
DIRECTORATE OFINCOME TAX(SYSTEMS)
ARA Center, Ground Floor, E-2, [aandewalan Extens ion,
New Delhi -11 0055
F.No. System/ITBA/ Instruction/ITR Processing/177/16-17/
To,
Dated: 12.09.2019
All Principal Chief Commiss ioners of Income-tax/ CCsIT
All Principal Director Generals of Income Tax /DGsIT
All Principal Commissioners of lncome-tax/Csl’T/Cs IT(Admin &TPS)
All Principal Directors of Income Tax/Ds IT
Sir/Madam,

Subject: –Functionality for processing of returns having refund claims which were not processed within the time allowed ujs 143(1) due to some technical or other reasons- reg.

This is in reference to the subject mentioned above.

2. References from the field formations and tax payers have been received in this Directorate informing that due to some technical reason or otherwise but not attributable to the assessee, the valid returns filed by tax payers, could not be processed within the time prescribed under section 143(1) of the Act. Due to which, refund due to the assessee could not be issued.

3. To mitigate the genuine hardship being faced by the tax payers on this issue, the CBDT, in exercise of powers conferred on it, under section 119 of the Act, has relaxed the time frame prescribed in second proviso to sub section (1) of section 143 till 31.12.2019, vide Order under sect ion 119 of the Act dated 05.08.2019 issued through File N0225/194/2019/ITA-I1. Therefore all concerned are requested to forward such references/ proposals at the earliest to this directorate, for the enablement of processing of such time barred returns. The proposals for the enablement of time barred processing must reach to the Directorate of Systems, New Delhi by 30.11.2019 so that these references can be processed well with in the time period ending on 31.12.2019. It is also to clarify that in each such case, the processing rights will be enabled by the ITBA team and subsequently, the processing action has to be performed by the respective assessing officer. All references must be sent alongwith administrative approval of concerned PCCIT/ CCIT to this Directorate. In the absence of administ rative approval of CCIT, such reference s will not be considered.
The following scheme and validation are prescribed in the above said Order.
Pre-Conditions:
(i) Valid return for the assessment years is filed under permitted time limit u/ s 139 or 142 (1).
(ii) Assessee has claimed refund in return of income.
(iii) On computation, the resultant outcome is refund.
(iv) The returns of income should not have been remained unprocessed due to any reason attributable to the concerned assessee.
(v) The returns of income should not be under Scrutiny assessment in view of provisions of sub- section (1D) of section 143 of the Act .
Processes to be followed :
(i) Prior administrative approval of concern ed Pr.CCIT/CCIT must be obtained for processing of such eligible time-barred returns.
(ii) Once administrative approval is accorded by the concerned PCCIT/ CCIT, the concerned Pr.CIT/ CIT would make reference to the Pro DGIT (Systems). to provide necessary enablement in system to the assessing officer on case to case basis.
4. In view of above Instruction from CBDT. the field formations are requested to follow following process :-
(a) For the cases up to A.Y. 2006-07: Cases for these years will not be Processed in System, The AO can process such time-barred re turns manually after obtaining prior approval of concern ed Pr.CCIT/ CCIT and thereafter upload the int imation u/s 143(1) in ITBA through manual order upload functionality as explained in ITBA Assessment Instruction No 9 dated 07.05.201B. The administrative approval of Pr.CC IT/CCIT may ITBA-Processing Instruction No 9 be communicated by the PCITfCIT to the Pro DGIT(Systems) alongwith amount of refund claimed so that necessary enablerncnt in system to upload such intimation may be acti vated. The refund determined in the processing will be issued through refund banker
(b) For the cases of A. Yr. 2007-08 to 2015-16: Cases of these years will be required to be processed in AST. The administ rative approval of Pr.CCIT/CCIT may be communicated by th e PCIT/CIT to the Pro DGIT(Systems) so that necessary enablement in system to upload such intimation may be activated. Thereafter concerned assessing officer will be able to process such time time bar red returns. The re fund arising out of processing will be issued th rough refund banker.
(c) Cases of A. Yrs. 2016-1 7 &2017-18 : For the AYrs . 2016-17 &2017-18 all the Paper returns and  e-filed returns pushed to AO by CPC-ITR are required to be processed at ITBA as per process described in ITBA Processing Instructions issued so far. If any such return is not processed, the process given in Para (b) is required to be followed. After which the necessary enablement will be activated in system. The AO are required to enter or modify the data and send the return to CPC-ITR for final computation and issuance of refund.
(d) For the e-flled cases which were not transferred to AO and remained unprocessed at CPC-ITR :
Cases in which valid unprocessed returns of income are lying with CPC, Bengaluru and the assessing officer is in receipt of request from the assessee seeking refund, the AO is required to verify that all the pre-conditio ns as per CBDT Inst ructions are com plied an d obtain th e approval of Pr.CClTfCIT to process such time-barred returns. Thereafter, the reference along with approval of Pro CCITfCCIT will have to be forwarded to CPC for further necessary action. The AO has to ensure that no assessment order (Manual or otherwise) is passed in such cases. Thereafter CPC•ITR will process such cases and issue refund as per extant procedure,
5. The navigation path for processing of such returns is given as under:
(a) In AST• For th e return of A Yr. 2007-08 to 2015-16: To process such cases, AO has to fetch the re quis ite return through the path “AST > Processing > Processing u/s 143(1)’.
(b) In ITBA- For the AYrs. 2016-17 &2017-18 : ITR Processing> Return Receipt Register > View RRR/nter Return Details
(c) Returns prior to A Yr. 2007-08: These returns are required to be processed manually after getting approval of Pro CCITfCCIT and upload in ITBA through manual order upload functionali ty through the path – Go to Assessment home page> Menu Manual Order Upload
6. The complete proced ure is elaborated in the user manual for the funct ionality which is available on ITBA forthe convenience of the users. This may be circulated amongst all ITBA-Processing Instruction No 9 officers working in your charge. With this, the var ious re presentations received from field format ions in th is regard sta nd disp osed off.
7. In case of any tec hnical difficulty being observed, users may immediately contact the ITBAhelpd esk .
A. URL of helpd csk of ITBA: http_:/ /itbahelpdesk.incometa x.net
B. Helpd esk number –0120-28112 00
C. Email id : itba.helpdesk@jncomet ax.goy.in
8. It is further emphasized that a ll such cases should be examined on priority and re fer ence as per prescribed procedure be sent to this Direc torate or to CPC-ITR as the case may be , as soon as possible. It is expect ed that all officers may henceforth use the aforesaid process, wherever required, while redressing the grievance of tax payers seeking refund where relevant returns could not be processed due to reasons not attributable to the assessee.
9. This is issued with the prior approval of ProDGIT (Systems).
Yours sincerely,
(Sukesh Kumar Jain)
Commissioner of Income Tax (ITBA)
Directorate of Systems, New Delhi
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E-assessment Scheme, 2019

The CBDT has vide Notification dated 12th September, 2019 brought into force the much awaited E-assessment Scheme, 2019. The objective of the scheme is to curb corruption by making tax filing and their review faceless. The e-assessment scheme makes it mandatory for all communication between tax department and taxpayers to be done online.


MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 12th September, 2019
(INCOME-TAX)

S.O. 3264(E).–In exercise of the powers conferred by sub-section (3A) of section 143 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following Scheme, namely:__
1. Short title and commencement.–– (1) This Scheme may be called the E-assessment Scheme, 2019.
(2) It shall come into force on the date of its publication in the Official Gazette.
2. Definitions .–– (1) In this Scheme, unless the context otherwise requires, ––
(i) “Act” means the Income-tax Act, 1961 (43 of 1961);
(ii) “addressee” shall have the same meaning as assigned to it in clause (b) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);
(iii) “assessment” means assessment of total income or loss of the assessee under sub-section (3) of section 143 of the Act;
(iv) “authorised representative” shall have the same meaning as assigned to it in sub-section (2) of section 288 of the Act;
(v) “automated allocation system” means an algorithm for randomised allocation of cases, by using suitable technological tools, including artificial intelligence and machine learning, with a view to optimise the use of resources;
(vi) “automated examination tool” means an algorithm for standardised examination of draft orders, by using suitable technological tools, including artificial intelligence and machine learning, with a view to reduce the scope of discretion;
(vii) “Board” means Central Board of Direct Taxes constituted under the Central Board of Revenues Act, 1963 (54 of 1963);
(viii) “computer resource” shall have the same meaning as assigned to them in clause (k) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);
(ix) “computer system” shall have the same meaning as assigned to them in clause (l) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);
(x) “computer resource of assessee” shall include assessee’s registered account in designated portal of the Income-tax Department, the Mobile App linked to the registered mobile number of the assessee, or the email account of the assessee with his email service provider;
(xi) “digital signature” shall have the same meaning as assigned to it in clause (p) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);
(xii) “designated portal” means the web portal designated as such by the Principal Chief Commissioner or Principal Director General, in charge of the National e-assessment Centre;
(xiii) “e-assessment” means the assessment proceedings conducted electronically in ‘e-Proceeding’facility through assessee’s registered account in designated portal;
(xiv) “electronic record” shall have the same meaning as assigned to it in clause (t) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);
(xv) “electronic signature” shall have the same meaning as assigned to it in clause (ta) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);
(xvi) “email” or “electronic mail” and “electronic mail message” means a message or information created or transmitted or received on a computer, computer system, computer resource or communication device including attachments in text, image, audio, video and any other electronic record, which may be transmitted with the message.;
(xvii) “hash function” and “hash result” shall have the same meaning as assigned to them in the Explanation to sub-section (2) of section 3 of the Information Technology Act, 2000 (21 of 2000);
(xviii) “Mobile app” shall mean the application software of the Income-tax Department developed for mobile devices which is downloaded and installed on the registered mobile number of the assessee;
(xix) “originator” shall have the same meaning as assigned to it in clause (za) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);
(xx) “real time alert” means any communication sent to the assessee, by way of Short Messaging Service on his registered mobile number, or by way of update on his Mobile App, or by way of an email at his registered email address, so as to alert him regarding delivery of an electronic communication;
(xxi) “registered account” of the assessee means the electronic filing account registered by the assessee indesignated portal;
(xxii) “registered e-mail address” means the e-mail address at which an electronic communication may be delivered or transmitted to the addressee, including-
(a) the email address available in the electronic filing account of the addressee registered in
designated portal;or
(b) the e-mail address available in the last income-tax return furnished by the addressee;or
(c) the e-mail address available in the Permanent Account Number database relating to the
addressee;or
(d) in the case of addressee being an individual who possesses the Aadhaar number, the e-mail
address of addressee available in the database of Unique Identification Authority of India;or
(e) in the case of addressee being a company, the e-mail address of the company as available on the
official website of Ministry of Corporate Affairs;or
(f) any e-mail address made available by the addressee to the income-tax authority or any person
authorised by such authority.
(xxiii) “registered mobile number” of the assessee means the mobile number of the assessee, or his authorised representative, appearing in the user profile of the electronic filing account registered by the assessee in designated portal;
(xxiv) “video telephony” means the technological solutions for the reception and transmission of audio-video signals by users at different locations, for communication between people in real-time.
(2) Words and expressions used herein and not defined but defined in the Act shall have the meaning respectively assigned to them in the Act.
3. Scope of the Scheme.–– The assessment under this Scheme shall be made in respect of such territorial area, or persons or class of persons, or incomes or class of incomes, or cases or class of cases, as may be specified by the Board.
4. E-assessment Centres.– (1) For the purposes of this Scheme, the Board may set up-
(i) a National e-assessment Centre to facilitate the conduct of e-assessment proceedings in a centralised manner, which shall be vested with the jurisdiction to make assessment in accordance with the provisions of this Scheme;
(ii) Regional e-assessment Centres as it may deem necessary to facilitate the conduct of e-assessment
proceedings in the cadre controlling region of a Principal Chief Commissioner, which shall be vested with the jurisdiction to make assessment in accordance with the provisions of this Scheme;
(iii) assessment units, as it may deem necessary to facilitate the conduct of e-assessment, to perform the function of making assessment, which includes identification of points or issues material for the determination of any liability (including refund) under the Act, seeking information or clarification on points or issues so identified, analysis of the material furnished by the assessee or any other person, and such other functions as may be required for the purposes of making assessment;
(iv) verification units, as it may deem necessary to facilitate the conduct of e-assessment, to perform the function of verification, which includes enquiry, cross verification, examination of books of accounts, examination of witnesses and recording of statements, and such other functions as may be required for the purposes of verification.
(v) technical units, as it may deem necessary to facilitate the conduct of e-assessment, to perform the function of providing technical assistance which includes any assistance or advice on legal, accounting, forensic, information technology, valuation, transfer pricing, data analytics, management or any other technical matter which may be required in a particular case or a class of cases, under this Scheme;and
(vi) review units, as it may deem necessary to facilitate the conduct of e-assessment, to perform the function of review of the draft assessment order, which includes checking whether the relevant and material evidence has been brought on record, whether the relevant points of fact and law have been duly incorporated in the draft order, whether the issues on which addition or disallowance should be made have been discussed in the draft order, whether the applicable judicial decisions have been considered and dealt with in the draft order, checking for arithmetical correctness of modifications proposed, if any, and such other functions as may be required for the purposes of review,
and specify their respective jurisdiction.
(2) All communication among the assessment unit, review unit, verification unit or technical unit or with the assesse or any other person with respect to the information or documents or evidence or any other details, as may be necessary for the purposes of making an assessment under this Scheme shall be through the National e-assessment Centre.
(3) The units referred to in sub-paragraphs (iii), (iv), (v) and (vi) of paragraph (1) shall have the following authorities, namely:–
(a) Additional Commissioner or Additional Director or Joint Commissioner or Joint Director, as the case may be;
(b) Deputy Commissioner or Deputy Director or Assistant Commissioner or Assistant Director, or Income-tax Officer, as the case may be;
(c) such other income-tax authority, ministerial staff, executive or consultant, as considered necessary by the Board.
5. Procedure for assessment.––(1) The assessment under this Scheme shall be made as per the following procedure, namely:__
(i) the National e-Assessment Centre shall serve a notice on the assessee under sub-section (2) of section 143, specifying the issues for selection of his case for assessment;
(ii) the assessee may, within fifteen days from the date of receipt of notice referred to in sub-clause (i), file his response to the National e-assessment Centre;
(iii) the National e-assessment Centre shall assign the case selected for the purposes of e-assessment under this Scheme to a specific assessment unit in any one Regional e-assessment Centre through an automated allocation system;
(iv) where a case is assigned to the assessment unit, it may make a request to the National e-assessment Centre for __
(a) obtaining such further information, documents or evidence from the assesse or any other person,
as it may specify;
(b) conducting of certain enquiry or verification by verification unit;and
(c) seeking technical assistance from the technical unit;
(v) where a request for obtaining further information, documents or evidence from the assessee or any other person has been made by the assessment unit, the National e-assessment Centre shall issue appropriate notice or requisition to the assessee or any other person for obtaining the information, documents or evidence requisitioned by the assessment unit;
(vi) where a request for conducting of certain enquiry or verification by the verification unit has been made by the assessment unit, the request shall be assigned by the National e-assessment Centre to a verification unit through an automated allocation system;
(vii) where a request for seeking technical assistance from the technical unit has been made by the assessment unit, the request shall be assigned by the National e-assessment Centre to a technical unit in any one Regional eassessment Centres through an automated allocation system;
(viii) the assessment unit shall, after taking into account all the relevant material available on the record, make in writing, a draft assessment order either accepting the returned income of the assessee or modifying the returned income of the assesse, as the case may be, and send a copy of such order to the National eassessment Centre;
(ix) the assessment unit shall, while making draft assessment order, provide details of the penalty proceedings to be initiated therein, if any;
(x) the National e-assessment Centre shall examine the draft assessment order in accordance with the risk management strategy specified by the Board, including by way of an automated examination tool, whereupon it may decide to –
(a) finalise the assessment as per the draft assessment order and serve a copy of such order and notice
for initiating penalty proceedings, if any, to the assessee, alongwith the demand notice, specifying
the sum payable by, or refund of any amount due to, the assessee on the basis of such assessment;
or
(b) provide an opportunity to the assessee, in case a modification is proposed, by serving a notice
calling upon him to show cause as to why the assessment should not be completed as per the draft
assessment order;or
(c) assign the draft assessment order to a review unit in any one Regional e-assessment Centre, through an automated allocation system, for conducting review of such order;
(xi) the review unit shall conduct review of the draft assessment order, referred to it by the National e-assessment Centre whereupon it may decide to__
(a) concur with the draft assessment order and intimate the National e-assessment Centre about such
concurrence;or
(b) suggest such modification, as it may deem fit, to the draft assessment order and send its
suggestions to the National e-assessment Centre;
(xii) the National e-assessment Centre shall, upon receiving concurrence of the review unit, follow the procedure laid down in sub-paragraph (a) or sub-paragraph (b) of paragraph (x), as the case may be;
(xiii) the National e-assessment Centre shall, upon receiving suggestions for modifications from the review unit,
communicate the same to the Assessment unit;
(xiv) the assessment unit shall, after considering the modifications suggested by the Review unit, send the final
draft assessment order to the National e-assessment Centre;
(xv) The National e-assessment Centre shall, upon receiving final draft assessment order, follow the procedure laid
down in sub-paragraph (a) or sub-paragraph (b) of paragraph (x),as the case may be;
(xvi) The assessee may, in a case where show-cause notice under sub-paragraph (b) of paragraph (x) has been
served upon him, furnish his response to the National e-assessment Centre on or before the date and time
specified in the notice;
(xvii) The National e-assessment Centre shall,-
(a) in a case where no response to the show-cause notice is received, finalise the assessment as per the
draft assessment order,as per the procedure laid down in sub-paragraph (a) of paragraph (x);or
(b) in any other case, send the response received from the assessee to the assessment unit;
(xviii) The assessment unit shall, after taking into account the response furnished by the assessee, make a revised
draft assessment order and send it to the National e-assessment Centre;
(xix) The National e-assessment Centre shall, upon receiving the revised draft assessment order,-
(a) in case no modification prejudicial to the interest of the assessee is proposed with reference to the draft
assessment order, finalise the assessment as per the procedure laid down in sub-paragraph (a) of
paragraph (x);or
(b) in case a modification prejudicial to the interest of the assessee is proposed with reference to the draft
assessment order,provide an opportunity to the assessee, as per the procedure laid down in subparagraph
(b) of paragraph (x);
(c) the response furnished by the assessee shall be dealt with as per the procedure laid down in paragraphs
(xvi),(xvii), and (xviii);
(xx) The National e-assessment Centre shall, after completion of assessment, transfer all the electronic records of
the case to the Assessing Officer having jurisdiction over such case., for –
(a) imposition of penalty;
(b) collection and recovery of demand;
(c) rectification of mistake;
(d) giving effect to appellate orders;
(e) submission of remand report, or any other report to be furnished, or any representation to be made, or
any record to be produced before the Commissioner (Appeals), Appellate Tribunal or Courts, as the
case may be;
(f) proposal seeking sanction for launch of prosecution and filing of complaint before the Court;
(xxi) Notwithstanding anything contained in paragraph (xx), the National e-assessment Centre may at any stage
of the assessment, if considered necessary, transfer the case to the Assessing Officer having jurisdiction
over such case.
6. Penalty proceedings for non-compliance.– (1) Any unit may, in the course of assessment proceedings, for noncompliance
of any notice, direction or order issued under this Scheme on the part of the assessee or any other person,
send recommendation for initiation of any penalty proceedings under Chapter XXI of the Act, against such assesse or any
other person, as the case may be, to the National e-assessment Centre, if it considers necessary or expedient to do so.
(2) The National e-assessment Centre shall, on receipt of such recommendation, serve a notice on the assessee or any
other person, as the case may be, calling upon him to show cause as to why penalty should not be imposed on him under
the relevant provisions of the Act.
(3) The response to show –cause notice furnished by the assessee or any other person, if any, shall be sent by the
National e-assessment Centre to the concerned unit which has made the recommendation for penalty.
(4) The said unit shall, after taking into consideration the response furnished by the assesse or any other person, as the
case may be, –
(a) make a draft order of penalty and send a copy of such draft to National e-assessment Centre;or
(b) drop the penalty after recording reasons, under intimation to the National e-assessment Centre.
(5) The National e-assessment Centre shall levy the penalty as per the said draft order of penalty and serve a copy of the
same on the assessee or any other person, as the case may be.
7. Appellate Proceedings.– An appeal against an assessment made by the National e-assessment Centre under this
Scheme shall lie before the Commissioner (Appeals) having jurisdiction over the jurisdictional Assessing Officer and any
reference to the Commissioner (Appeals) in any communication from the National e-assessment Centre shall mean such
jurisdictional Commissioner (Appeals).
8. Exchange of communication exclusively by electronic mode.–– For the purposes of this Scheme,-
(a) all communications between the National e-assessment Centre and the assessee, or his authorised
representative, shall be exchanged exclusively by electronic mode;and
(b) all internal communications between the National e-assessment Centre, Regional e-assessment Centres
and various units shall be exchanged exclusively by electronic mode.
9. Authentication of electronic record.–– For the purposes of this Scheme, an electronic record shall be authenticated
by the originator by affixing his digital signature in accordance with the provisions of sub-section (2) of section 3 of the
Information Technology Act, 2000 (21 of 2000):
Provided that in case of the originator, being the assesse or any other person, such authentication may also be done by
electronic signature or electronic authentication technique in accordance with the provisions of sub-section (2) of section
3A of the said Act:
10. Delivery of electronic record.––(1) Every notice or order or any other electronic communication under this Scheme
shall be delivered to the addressee, being the assessee, by way of-
(a) placing an authenticated copy thereof in the assessee’s registered account;or
(b) sending an authenticated copy thereof to the registered email address of the assessee or his authorised
representative;or
(c) uploading an authenticated copy on the assessee’s Mobile App;and
followed by a real time alert.
(2) Every notice or order or any other electronic communication under this Scheme shall be delivered to the addressee,
being any other person, by sending an authenticated copy thereof to the registered email address of such person, followed
by a real time alert.
(3) The Assessee shall file his response to any notice or order or any other electronic communication, under this Scheme,
through his registered account, and once an acknowledgement is sent by the National e-assessment Centre containing the
hash result generated upon successful submission of response, the response shall be deemed to be authenticated.
(4) The time and place of dispatch and receipt of electronic record shall be determined in accordance with the provisions
of section 13 of the Information Technology Act, 2000 (21 of 2000).
11. No personal appearance in the Centres or Units.––(1) A person shall not be required to appear either personally or
through authorised representative in connection with any proceedings under this Scheme before the income-tax authority
at the National e-assessment Centre or Regional e-assessment Centre or any unit set up under this Scheme.
(2) In a case where a modification is proposed in the draft assessment order, and an opportunity is provided to the
assessee by serving a notice calling upon him to show-cause as to why the assessment should not be completed as per the
such draft assessment order, the assessee or his authorised representative, as the case may be, shall be entitled to seek
personal hearing so as to make his oral submissions or present his case before the income-tax authority in any unit under
this Scheme, and such hearing shall be conducted exclusively through video conferencing, including use of any
telecommunication application software which supports video telephony, in accordance with the procedure laid down by
the Board.
(3) Any examination or recording of the statement of the assessee or any other person (other than statement recorded in
the course of survey under section 133A of the Act) shall be conducted by an income-tax authority in any unit under this
Scheme, exclusively through video conferencing, including use of any telecommunication application software which
supports video telephony in accordance with the procedure laid down by the Board.
(4) The Board shall establish suitable facilities for video conferencing including telecommunication application software
which supports video telephony at such locations as may be necessary, so as to ensure that the assessee, or his authorised
representative, or any other person referred to in sub-paragraph (2) or sub-paragraph (3) is not denied the benefit of this
Scheme merely on the consideration that such assessee or his authorised representative, or any other person does not
have access to video conferencing at his end.
12. Power to specify format, mode, procedure and processes.––(1) The Principal Chief Commissioner or the Principal
Director General, in charge of the National e-assessment Centre shall lay down the standards, procedures and processes
for effective functioning of the National e-assessment Centre , Regional e-assessment Centres and the unit set-up under
this Scheme, in an automated and mechanised environment, including format, mode, procedure and processes in respect
of the following, namely:__
(i) service of the notice, order or any other communication;
(ii) receipt of any information or documents from the person in response to the notice, order or any other
communication;
(iii) issue of acknowledgment of the response furnished by the person;
(iv) provision of “e-proceeding” facility including login account facility, tracking status of assessment,
display of relevant details, and facility of download;
(v) accessing, verification and authentication of information and response including documents submitted
during the assessment proceedings;
(vi) receipt, storage and retrieval of information or documents in a centralised manner;
(vii) general administration and grievance redressal mechanism in the respective Centres and units.
[Notification No. 61/2019/F.No. 370149/154/2019-TPL]
ANKUR GOYAL, Under Secy.
Refer:http://itatonline.org
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CBDT prescribes Cost Inflation Index for FY 2019-20

CENTRAL BOARD OF DIRECT TAXES has prescribed 289 as the cost inflation index for the financial year 2019-20 vide Notification No. 63/2019 dated 12th September 2019.


Refer:https://taxpedia.net 
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CBDT issues norms for launching Prosecution under Direct Tax Laws

The Central Board of Direct Taxes ( CBDT )vide circular No. 24/2019 dated 09/.09/2019 has issued norms for identification and processing of cases for prosecution under Direct Tax Laws. 
The prosecution is a criminal proceeding. Therefore, based upon evidence gathered, offence and crime as defined in the relevant provision of the Act, the offence has to be proved beyond a reasonable doubt. To ensure that only deserving cases get prosecuted the Central Board of Direct Taxes in exercise of powers under section 119 of the Act lays down the following criteria for launching prosecution in respect of the following categories of offences. 

i. Offences u/s 276B: Failure to pay tax to the credit of Central Government under Chapter XII-D or XVII-B. 
Cases where non-payment of tax deducted at source is Rs. 25 Lakhs or below, and the delay in the deposit is less than 60 days from the due date, shall not be processed for prosecution in normal circumstances. In case of exceptional cases like habitual defaulters, based on particular facts and circumstances of each case, prosecution may be initiated only with the previous administrative approval of the Collegium of two CCIT/DGIT rank officers as mentioned in Para 3. 

ii. Offences u/s 276BB: Failure to pay the tax collected at source. 
Same approach as in Para 2.i above. 

iii. Offences u/s 276C(1): Wilful attempt to evade tax, etc. 
Cases where the amount sought to be evaded or tax on under-reported income is Rs. 25 Lakhs or below, shall not be processed for prosecution except with the previous administrative approval of the Collegium of two CCIT/DGIT rank officers as mentioned in Para 3. Further, prosecution under this section shall be launched only after the confirmation of the order imposing a penalty by the Income Tax Appellate Tribunal. 

iv. Offences u/s 276CC: 
Failure to furnish returns of income. Cases where the amount of tax, which would have been evaded if the failure had not been discovered, is Rs. 25 Lakhs or below, shall not be processed for prosecution except with the previous administrative approval of the Collegium of two CCIT/DGIT rank officers as mentioned in Para 3. 

For the purposes of this Circular, the constitution of the Collegium of two CCIT/DGIT rank officers would mean the following- 
As per section 279(1) of the Act, the sanctioning authority for offences under Chapter XXII is the Principal Commissioner or Commissioner or Commissioner (Appeals) or the appropriate authority. For proper examination of facts and circumstances of a case, and to ensure that only deserving cases below the threshold limit as prescribed in Annexure get selected for filing of prosecution complaint, such sanctioning authority shall seek the prior administrative approval of a collegium of two CCIT/DGIT rank officers, including the CCIT/DGIT in whose jurisdiction the case lies. The Principal CCIT(CCA) concerned may issue directions for a pairing of CCsIT/DGIT for this purpose. In case of disagreement between the two CCIT/DGIT rank officers of the collegium, the matter will be referred to the Principal CCIT(CCA) whose decision will be final. In the event that the Pr.CCIT(CCA) is one of the two officers of the collegium, in case of disagreement the decision of the Pr.CCIT(CCA) will be final.

Read more at: https://www.taxscan.in/cbdt-issues-norms-launching-prosecution-direct-tax-laws/37972/
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Government to tweak Income Tax Act, won’t replace it with direct tax code

The draft legislation has proposed significant relief for taxpayers
Tax experts said the timing of policy changes is vital as businesses may not prefer to have radical changes in law to coincide with economic uncertainty


The government is unlikely to replace the Income Tax Act with the direct tax code, and will only incorporate select suggestions from the draft law to avoid creating more uncertainty for businesses amid an economic slowdown.

Some suggestions in the draft legislation, submitted to finance minister Nirmala Sitharaman on 19 August, will find their way into the Income Tax Act, 1961 through amendments in the next budget session of Parliament, said a person privy to the discussions in the government.

This will make the law modern and capable of dealing with new business models by incorporating global best practices without creating any uncertainty among businesses, the person said on condition of anonymity.

The idea of replacing the close to six-decade-old law is less appealing to the government now as this would involve unsettling well-established jurisprudence, which could create uncertainty for businesses that are grappling with a deep economic downturn. The finance ministry has not made public the report of the expert panel. The panel has proposed significant relief for taxpayers, including an across-the-board 25% tax rate for both local and foreign companies, and changes in personal income tax slabs, Mint reported on 19 August.

While the new ideas proposed in the report may be adopted in the Income Tax Act, replacing it with a new statute for the sake of simplification was not an easy task, the person said.

Besides, a lot of sub-rules, exemptions and carve-outs included in the law that have arguably made the Act complex are meant to take care of specific needs of industries and sections of people. “If the law is made too simple, it may become inequitable too," said the person. “Besides, even if you make the law simple, it will not stay so for long in a dynamic economy," added the person.

Tax experts said the timing of policy changes is vital as businesses may not prefer to have radical changes in law to coincide with economic uncertainty. “Better the devil you know than the unknown one. Taxpayers now know how to navigate the current law," said a tax expert, who did not wish to be identified.

The Manmohan Singh-led government had attempted to introduce a new direct tax code at the beginning of this decade, but eventually almost all of its proposals including the General Anti Avoidance Rules were incorporated in the Income Tax Act itself.

The finance ministry’s idea is to calibrate the existing Income Tax Act in the light of insights from the comprehensive review made by the expert panel so that it is capable of dealing with the latest trends in movement of capital and profits across borders.

A second person privy to the discussions in the government, who also spoke on condition of anonymity, said one of the priorities of the Narendra Modi-led government is to moderate certain existing anti-abuse provisions that may have hurt the taxpayer more than intended.

On the other hand, changes in tax rates have been a continuous process, executed through annual Finance Acts. The second Finance Act of 2019 passed as part of the full budget for the current fiscal has already taken forward the Modi administration’s agenda of making taxation more progressive, with the tax incidence going up with rising income levels.

The government raised the surcharge levied on income tax outgo of individuals with earnings more than ₹2 crore, in two slabs. That has led to those earning in the range of ₹2-5 crore paying 39% tax on income exceeding ₹2 crore and those earning more than ₹5 crore paying 42.7% on the income exceeding ₹5 crore.
Refer:https://www.livemint.com
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CBDT Excludes Bogus Penny Stocks Scam Cases From Benefit Of Low-Tax Effect Circular

The CBDT has vide Circular No. 23 of 2019 dated 6th September 2019 stated that cases where organised tax-evasion scam is noticed through bogus Long-Term Capital Gain (LTCG)/Short Term Capital Loss (STCL) on penny stocks will be excluded from the benefit of the enhanced monetary limits stipulated in Circular no. 17 of 2019 dated 08.08.2019. The CBDT may by way of special order direct filing of appeal on merit in cases involved in organised tax evasion activity
Circular No. 23 of 2019
F. No. 279/Misc./M-93/2018-ITJ(Pt.)
Government of India
Ministry of Finance
Department of Revenue
Central Board Direct Taxes
Judicial Section
New Delhi, 6th September 2019

Subject: -Exception to monetary limits for filing appeals specified in any Circular issued under Section 268A of the Income-tax Act, 1961-reg
Reference is invited to the Circulars issued from time to time by Central Board of Direct Taxes (the Board) under section 268A of the Income-tax Act,1961 (the Act), for laying down monetary limits and other conditions for filing of departmental appeals before Income Tax Appellate Tribunal (ITAT), High Courts and SLPs/appeals before Supreme Court.
2. Several references have been received by the Board that in large number of cases where organised tax-evasion scam is noticed through bogus Long-Term Capital Gain (LTCG)/Short Term Capital Loss (STCL) on penny stocks and department is unable to pursue the cases in higher judicial fora on account of enhanced monetary limits. It has been reported that in large number of cases, ITATs and High Court have recognized the unique modus operandi involved in such scam and have passed judgements in favour of the revenue.
However, in cases where some appellate fora have not given due consideration to position of law or facts investigated by the department, there is no remedy available with the department for filing further appeal in view of the prescribed monetary limits.
3. In this context, Board has decided that notwithstanding anything contained in any circular issued u/s 268A specifying monetary limits for filing of departmental appeals before Income Tax Appellate Tribunal (ITAT), High Courts and SLPs/appeals before Supreme Court. appeals may be filed on merits as an exception to said circular, where Board, by way of special order direct filing of appeal on merit in cases involved in organised tax evasion activity.
4. Hindi version follows.
(Neetika Bansal)
Director (lTJ)
CBDT, New Delhi

Refer:http://itatonline.org
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CBDT Modifies System For Approval Of Applications U/s 197 For Low TDS U/s 195

The CBDT has vide Office Memorandum dated 2nd September, 2019 specified a modification in the new system of approval in respect of application under section 197 of Income Tax Act

F.No.275/16/2019-IT(B)
Government of India
Ministry of Finance, Department of Revenue
Central Board of Direct Taxes
*****
North Block, New Delhi 2nd September, 2019
Office Memorandum
Subject: Modification in the new system of approval in respect of application under section 197 of Income Tax Act
Reference may be made to the Board’s Instruction No. 7 of 2009 dated 23.12.2009 vide which prior administrative approva l of Commissioner of Income Tax was prescribed for issue of certificate under section 197 of the Income -Tax Act, where the tax forgone exceeded specified thresholds.
Various administrative and systematic difficulties related to such amount of revenue forgone under the newly introduced system of online applicat ion uls 195/197 of the LT. Act 1961 in respect of non-resident taxpayers were brought to the notice of the Board.
To address these difficulties, a proposal for raising the threshold of revenue forgone
was made so as to balance the needs of supervisory control and expeditious grant of certificate .
2. The above matter has been examined in the Board and it has been decided to raise threshold of revenue effect for issue of certificates under section 197/195 needing approval of the Commissioner of Income Tax (IntI. Taxation) to Rs. 10 Crore.
This threshold will be applicable for all stations in respect of all applications of non-resident taxpayers either pending as on date or filed hereafter.
This issues with the approval of the Chairman , CBDT.
(Naveen Kapoor)
Under Secretary to the Govt. of India
Ph. No. 011-23094182
Refer:http://itatonline.org
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CBDT Issues Guidelines For Manual Selection Of Returns For Complete Scrutiny During FY 2019-20

The CBDT has vide directive dated 5th September, 2019 specified the guidelines for manual selection of returns for Complete Scrutiny during the financial-year 2019-20, which is reproduced here under:-

F.No.225/169/2019/ITA-11
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes (ITA-II division)
North Block, New Delhi, the 5th September, 2019
To
All Pr. Chief-Commissioners of Income-tax/Chief-Commissioner of Income-Tax
All Pr. Directors-General of Income tax/Directors-General of Income-tax
Sir/Madam
Subject: Guidelines for manual selection of returns for Complete Scrutiny during the financial-year 2019-20-regarding.-
1. The parameters for manual selection of returns for Complete Scrutiny during financial year 2019-20 are as under.-
(i) Cases involving addition in an earlier assessment year(s) on a recurring issue of law or fact: –
a. exceeding Rs. 25 lakhs in eight metro charges at Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata, Mumbai and Pune while at other charges, quantum of addition should exceed Rs. 10 lakhs;
b. exceeding Rs. 10 crore in transfer pricing cases. and where such an addition:-
1. has become fi ~al as no further appeal has been filed against the assessment order;or
2. has been confirmed at any stage of appellate process in favor of revenue and assessee has not filed further appeal;or
3. has been confirmed at the 1st stage of appeal in favor of revenue or subsequently;even if further appeal of assessee is pending, against such order.
(ii) Cases pertaining to Survey under section 133A of the Income-tax Act, 1961 (‘Act’) excluding those cases where books of accounts, documents, etc. were not impounded and returned income (excluding any disclosure made during the Survey) is not less than returned income of preceding assessment year.
However, where assessee has retracted from disclosure made during the Survey, such cases will be considered for scrutiny.
(iii) Assessments in search and seizure cases to be made under section(s) 153A, 153C, 158BA, 158BC &158BD read with section 143(3) of the Act and also for return filed for assessment year relevant to previous year in which authorization for search and seizure was executed under section 132 or 132A of the Act.
(iv) Cases where registration/approval under various sections of the Act such as 12A,
35(1)(ii)/(iia)/ (iii) , lO(23C), etc . have not been granted or have been cancelled/withdrawn by the Competent Authority, yet the assessee has been found to be claiming tax-exemption/deduction in the return. However, where such orders of withdrawal of registration/approval have been reversed/set-aside in appellate proceedings, those cases will not be selected under this clause.
(v) Cases in respect of which specific information pointing out tax-evasion for the relevant year is given by any law- enforcement /intelligence/regulatory authority or agency . However, before selecting a return for scrutiny under this criterion, Assessing Officer shall take prior administrative approval from jurisdictional Pr. CIT/Pr.DIT/CIT/DIT concerned.
2. Through Computer Aided Scrutiny Selection (CASS), cases are being selected in two categories viz. Limited Scrutiny &Complete Scrutiny in a centralized manner under CASS-2019. CASS is a system-based method for scrutiny selection which identifies the cases through data-analytics and three-hundred sixty degree data profiling of taxpayers and in a non -discretionary manner. The list of these cases is being/has been separately intimated by the Principal DGIT(Systems) to the Jurisdictional authorities concerned for
further necessary action. In respect of cases selected under CASS cycle 2019, the following guidelines are specified.
(i) Cases where returns are selected for scrutiny through CASS but are not verified by the assessee within th e specified peri od of e-fil ing and such ret urns remain unverified before the due date for issue of notice u/s 143(2), shou ld be reopened by issue of notice under section 148 of the Act .
(ii) Cases selected for ‘Limited Scrutiny’but credible specific information has been/is received from any law- enforcement/intelligence/ regulatory authority or agency regarding tax-evasion in such cases, then only issue(s) arising from such information can be exam ined during the course of conduct of assessment proceedings in such ‘Limited Scrutiny’cases, with prior administrative approval of the Pr. CIT/CIT concerned as per the procedure laid down in Board’s letter dated 28.11.2018 issued vide F.No.225/402/2018/ITA-1 1. In such ‘limited Scrutiny’cases, Assessing Officer shall not expand the scope of enquiry/investigation beyond the issue(s) on which the case was flagged for ‘Limited Scrutiny’and the issue(s) arising from the information received from the above referred agency or authority.
3. This may be brought to the notice of all concerned for necessary compliance .
4. Hindi version to follow.
(Rajarajeswari R.)
Under Secretary-ITA.II, CBDT
Refer:http://itatonline.org
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Don’t Share Income Tax e-filing account password with Bankers says Income Tax Dept

Official Account of the Income Tax Department, Government of India has strongly advised that your Income Tax e-filing account password should not be shared with anyone. In case the Bank official requires any documents from your e-filing account,please ensure that the same are generated & provided by you yourself. The IT Dept was replying to a tweet by a user who tweeted as under.


It is observed that many bankers asks the customers to share their Income Tax or GST account user ID and passwords so as to verify the genuineness of the Returns submitted. However this may lead to unwarranted Information Technology related issues, this also is a cause of concern as the information shared may be misused further. This is also unwarranted from the point of view of The Information Technology Act. Bank customers are advised to share the above reply of Income Tax Department with the banks who asks the same.

Refer:https://taxpedia.net/dont-share-income-tax-e-filing-account-password-with-bankers-says-income-tax-dept/
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‘GST return form too complex to meet filing deadline’


‘Small businesses face huge challenge in preparing GSTR-9’

Although the government has postponed the deadline for the filing of annual returns under the Goods and Services Tax (GST) for the fourth time, tax analysts say that the problems with the form are so confounding that most filers won’t be able to meet even the new deadline of November 30.

The GST legislation requires the filing of the GST annual returns by specified categories of taxpayers along with a GST audit if the turnover is more than ₹2 crore in a financial year.

As of July 1, 2019, the third year of GST implementation had started and yet, tax filers had not been able to file the returns even for the first year. The government had extended the due date for filing the returns four times, with the latest being the extension from August 31 to November 30.

One of the biggest pain points for tax filers, according to the analysts, is that the annual return form — the GSTR-9 — asks for a lot of information. Such information was not required to be given in the monthly or quarterly return forms — GSTR-1 and GSTR-3B. Tax filers are thus finding it very difficult to provide that information.

“GSTR-9 is nothing but complexity and confusion galore,” said Ritesh Kanodia, partner, Dhruva Advisors.

“The complexity starts with the level of details required, despite the fact that most of these were waived for monthly return filing. For example, the break-up of credit into input, input services and capital goods, or the break-up of reversals type-wise, reporting of ineligible credit, which may not have been captured in the financials.

“The values derived from the system does not always match with the books and a lot of time is wasted in trying to match them, with the only conclusion that it cannot be done,” Mr. Kanodia added.

Apart from the discrepancies between the data in the various GST forms that have to be submitted, another major issue being faced is the complexity of the annual return filing itself, and the fact that it requires information that is often at odds with the GST law itself.

“The manner in which the said information is to be provided is quite complicated,” said Prashanth Agarwal, partner, indirect tax, PwC India. “Although some of the aspects have been clarified by the government on this, still there are open issues which need clarity.

“There is a need to provide HSN classification for services at a six-digit level whereas the GST law allows companies to maintain the same at a four-digit level as well,” Mr. Agarwal added.

“Hence, companies don’t have this six-digit classification available with them. The government should allow companies to report HSN at the four-digit level.”

Onerous requirement

In what is being seen as an extremely onerous requirement, the annual return also requires tax filers to provide details of the transactions on which GST is not payable. Further, in terms of discrepancies, the power lies with the government. Companies cannot claim more input tax credit (ITC) than had already been claimed in the year, but the government can ask for more tax if it feels it is needed.

“The annual return requires the details of all those transactions in respect of which no GST is payable during the relevant period, which make the entire process more complex,” Rahul Dhuparh, deputy general manager, Taxmann said.

“No additional ITC can be claimed in GSTR-9, though additional tax, if found to be payable while reconciling, must be deposited with the government in cash.

“Due to the complex structure of the annual return, taxpayers are afraid to file it as there is no provision in the law to rectify the annual returns,” he added.

“Small taxpayers, who run their business from multiple registrations, but do not maintain separate books of accounts and do not have information split according to GSTIN registrations, are facing a huge challenge in preparing GSTR-9,” said Archit Gupta, founder and CEO, Cleartax.

“Taxpayers with a turnover of less than ₹5 crore must be allowed to report GSTR-9 on an aggregate basis, instead of GSTIN-wise,” said Mr. Gupta.
Refer:www.thehindu.com/business
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