Proposed amendments to Income-tax Rules, 1962 - Inviting comments of stakeholders

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 13th June, 2018

PRESS RELEASE

Proposed amendments to Income-tax Rules, 1962 - Inviting comments of stakeholders

Income-tax Rules, 1962 (I.T.Rules) prescribe Form No.36 for filing an appeal to the Income Tax Appellate Tribunal (ITAT). Further, a memorandum of crossobjections to the ITAT can be filed in Form No.36A.

The existing Form No.36 and Form No 36A have not been revised since long. These Forms are required to be rationalised to make them more informative and also to capture information regarding amount disputed in pending appeals before ITAT, which is vital for formulating the policy of the department for litigation management.

In view of the above, a draft notification proposing amendments in Form No. 36, Form No.36A and Rule 47 of the IT Rules has been uploaded on the website of the Income Tax Department www.incometaxindia.gov.in for comments from stakeholders and general public. 

The comments and suggestions on the draft notification may be sent by 2nd July, 2018 electronically at the email address ts.mapwal@nic.in.

(Surabhi Ahluwalia)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT.

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Revision in PAN application fee

Refer to Circular No.: NSDL/TIN/2018/012 dated Jun 13, 2018, related to Revised PAN application fees .

Income Tax Department (ITD) has decided to revise the PAN application fee to be collected from applicants.

The PAN applicants shall now have the option to get a physical PAN card or an e-PAN card while submission of PAN application.

Following is the revised PAN application fees - applicable from June 16, 2018 (i.e., EOD of June 15, 2018).

FEES AND CHARGES

TIN-FC shall collect the fees as per the following schedule from deductors/collectors/ filers/Accounts Officers/applicants along-with GST and other levies as applicable:

Sr. No	Particulars	Fees (Rs.)	GST @ 18%*(Rs.)	Total (Rs.)	Amount to be charged (Rs.)
		1	2	3	4
PAN Applications – Applicant opts for physical PAN Card
1	Dispatch of physical PAN Card in India (Communication address is Indian address)	91	16.38	107.38	107
2	Dispatch of physical PAN Card outside India (where foreign address is provided as address for communication)	862	155.16	1017.16	1017
PAN Applications – Applicant opts for only e-PAN Card (No physical card requested)
1	Communication address is Indian Address	61	10.98	71.98	72
2	Communication address is foreign address	61	10.98	71.98	72
TAN applications
1	TAN Applications	55	9.9	64.9	65
	e-TDS/e-TCS/Form 24G & AIR/SFT
1	0-100 records	42.37	7.63	50	50
2	101-1000 records	178	32.04	210.04	210
3	More than 1000 records	578.5	104.13	682.63	683

NOTE:- If applicant opt for only e-PAN Card, then it would be mandatory to provide customer email ID in the PAN application for such cases.

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S. 271(1)(c) Penalty:Merely using the words that there is concealment of income and / or furnishing inaccurate particulars of income is not sufficient. The same should be particularized

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

INCOME TAX APPEAL NO. 1363 OF 2015

WITH

INCOME TAX APPEAL NO. 1358 OF 2015

WITH

INCOME TAX APPEAL NO. 1359 OF 2015

Commissioner of Income Tax2 .. Appellant

v/s.

M/s. L & T Finance Ltd. ..Respondent

Mr. Suresh Kumar for the appellant

Mr. Niraj Sheth i/b Atul Jasani for the respondent

CORAM : M.S. SANKLECHA & SANDEEP K. SHINDE, J.J.

DATED : 4th JUNE, 2018.

P.C.

1. These three Appeals under Section 260A of the Income Tax Act, 1961 (the Act) challenge the common order dated 19th March, 2015 passed by the Income Tax Appellate Tribunal (the Tribunal). The impugned order is in respect of Assessment Years 1995-96, 1996-97 and 1997-98.

Thus, the three appeals.

2. The Revenue has urged only the following identical reframed question of law in all three appeals for our consideration:

(i) Whether in the facts and circumstances of the case and in law, the Tribunal was justified in deleting the penalty levied under Section 271(1)(c) of the Act?

3. The respondent assessee had claimed depreciation in respect of the assets acquired / purchased from the lessee and given back on lease basis popularly called “sale and lease back”. In quantum proceedings, the Tribunal by order dated 30th April, 2014 has held the respondent assessee entitled to claim depreciation on the assets used on sale and lease back basis. This by following the decision of the Supreme Court in ICDS Ltd. Vs. Commissioner of Income Tax, 350 ITR 527.

4. Being aggrieved by the order dated 30thApril, 2014 of the Tribunal in quantum proceedings, the Revenue had filed three appeals being Income Tax Appeal Nos.1625 of 2014, 1670 of 2014 and 1694 of 2014 in this Court. On 8th March, 2017 all the three appeals were admitted on identical substantial question of law, which reads as under :

“1. Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in allowing depreciation on assets given on sale and lease back basis when the transactions were purely financial transactions?”

5. In the meantime, pending disposal of the quantum appeal by the Tribunal, the Deputy Commissioner of Income Tax imposed penalty under Section 271(1)(c) of the Act by three separate orders all dated 29th March, 2011 in respect of the Assessment Years 1995-96, 1996-97 and 1997-98.

This by following the decision of the Delhi High Court in the case of Commissioner of Income Tax Vs. Zoom Communication Pvt. Ltd. 371 ITR 570. Finally, the Tribunal by the impugned order dated 19th March, 2015 allowed the respondent’s appeals in penalty proceedings. This by holding that on merits it had by its order dated 30th April, 2014 in quantum proceedings for all the three years, held that the respondent assessee is entitled to the claim of depreciation on its assets as claimed. Thus, deleted the penalty.

6. The Revenue seeks admission of these appeals from the impugned order dated 19th March, 2015 deleting penalty under Section 271(1)(c) of the Act on the ground that the appeals in the quantum proceedings have been admitted by this Court.

It is a settled position in law that mere rejection of a claim made by the assessee would not ipso facto result in penalty under Section 271(1)(c) of the Act.

In fact, in Commissioner of Income Tax Vs. Reliance Petroproducts Pvt. Ltd.2010 (11) SCC 762, the Apex Court observed that “Merely because theassessee’s had claimed the expenditure, which claim was not accepted or not acceptable to the Revenue, that by itself would not in our opinion attract penalty under Section 271(1)(c)”.

Before penalty can be imposed under Section 271(1)(c) of the Act, the Revenue in terms thereof must be satisfied that the assessee had concealed particulars of income or furnished inaccurate particulars of his income.

In case, where an assessee makes a complete disclosure of facts it then cannot be said to have concealed the particulars of income or furnished inaccurate particulars of income.

Thus, mere making a claim for benefit under a particular provision of law would not attract penalty under Section 271(1)(c) of the Act if there is absence of concealment and / or furnishing of inaccurate particulars of income. This has been so held by the Apex Court in Reliance Petroproducts Pvt. Ltd. (supra).

7. We called upon Mr. Suresh Kumar, learned Counsel appearing for the Revenue to show us a finding by the Authorities under the Act that there has been concealment of particulars of income or furnishing inaccurate particulars of income on the part of the respondent assessee.

In fact, we perused the orders of the Assessing Officer imposing penalty as well as the order of the Commissioner of Income Tax (Appeals) [CIT(A)] upholding the penalty and also the impugned order of the Tribunal. In none of these orders there is any whisper of the alleged particulars of income which has been concealed or what particulars of income which have been filed is inaccurate.

Mere using the words that there has concealment of income and / or furnishing inaccurate particulars of income would not in the absence of same being particularized, lead to imposition of penalty. It is only when the specified officer of the Revenue is satisfied that there has been concealment of particulars of income or furnishing inaccurate particulars of income that the occasion to explain the conduct in terms of Explanation I to Section 271(1)(c) of the Act would arise.

8. In the facts of the present case, we are dealing with the assessments relating to Assessment Years 1995-96, 1996-97 and 1997-98.

The position in law at that point of time was not clear. It is not a case of the Revenue that the respondent assessee has claimed depreciation in the face of a statutory provision or a binding decision of a Court, prohibiting the assessee from claiming depreciation in respect of the assets on sale and lease back basis. Till such time as the Apex Court rendered its decision in ICDS Ltd. (supra) in an Income Tax case, the position was not clear. Therefore, at the relevant time, when the assessee made a claim for depreciation, there was no statutory provision or a decision contrary to the stand taken by the assessee which has been shown to us.

It is pertinent to note that in the order dated 30th April, 2014 in quantum proceedings, the Tribunal has read the decision in case of ICDS Ltd. (supra) of the Apex Court covering the issue in favour of the assessee even in case of finance lease. Thus, the issue in respect of claim made is clearly debatable.

It is further to be noted that it is not the case of the revenue in the absence of particularization that the basis of the claim was by suppression / concealment of income or filing of inaccurate particulars of income. Once suppression or filing of inaccurate particulars is absent, no penalty is imposable only for making a claim not acceptable to the Revenue.

9. Further, reliance by the impugned order dated 19th March, 2015 upon the decision of the Delhi High Court in Zoom Communication Pvt. Ltd. (supra) is based on the fact that the claim made by the assessee therein was without any foundation. Further, in the above case, it was pointed that it was apparent that the respondent therein was not acting bona fide while making claim for deduction. Moreover, the same had not been added back in the computation of income due to oversight.

Thus, prima facie there was inaccurate filing of particulars of income. Moreover, the assessee in the above case was unable to explain to the satisfaction of the Authorities as to the circumstances which led to the mistake in having made a claim for deduction, which was not added back while computing the income. It was in these circumstances, the penalty upon an assessee under Section 271(1)(c) of the Act was upheld.

10. The present facts are completely different. The claim made by the respondent assessee was bona fide and not in the face of a statutory provision or any binding decision. In fact, the issue raised herein stands covered in favour of the respondent assessee by the decision of the Apex Court in Reliance Petroproducts Pvt. Ltd. (supra) where it has been observed that making of incorrect claim in law would not by itself amount to concealment of income or giving inaccurate particulars of income.

The words concealment or giving inaccurate particulars of income have to be read strictly before the penalty provisions under Section 271(1)(c) of the Act can be invoked. In the present facts, the Revenue has not been able to show even remotely that there is any concealment of income or filing of inaccurate particulars of income.

11. In the aforesaid circumstances, the question as proposed stands concluded against the appellant revenue by the decision of the Apex Court in Reliance Petroproducts Pvt. Ltd. (supra). In the above view, the question as proposed does not give rise to any substantial question of law. Thus, not entertained.

12. Accordingly, all the three appeals are dismissed. No order as to costs.

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CBDT dedicates fortnight for pending appeal effect

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 7th June, 2018

PRESS RELEASE

CBDT dedicates fortnight for pending appeal effect – rectification matters Redressal of public grievances and taxpayer service is an area of top priority for the CBDT and the Income Tax Department. In this connection, a fortnight from 1st June to 15th June, 2018 has been dedicated for expeditious disposal of pending appeal effect and rectification matters. The Assessing Officers have been directed to accord top priority to such matters and to give special attention to this area of work so that grievances arising on this count may be resolved at the earliest. 

All taxpayers, local chapters of ICAI and Bar Associations are requested to use this opportunity to get their pending issues under appeal effect and rectification resolved during this fortnight.

(Surabhi Ahluwalia)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT.

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CBDT issues reward schemes for Income Tax Informants

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 1st June, 2018

PRESS RELEASE

Revised Income Tax Informants Reward Scheme, 2018

With the objective of obtaining people’s participation in the Income Tax Department’s efforts to unearth black money and reduce tax evasion, a new reward scheme titled “Income Tax Informants Reward Scheme, 2018” has been issued by the Income Tax Department, superseding the earlier reward scheme issued in 2007.

Under the revised scheme, a person can get reward up to Rs. 50 lakh for giving specific information in prescribed manner to the designated officers of Investigation Directorates in Income Tax Department about substantial evasion of tax on income or assets in India which are actionable under the Income-tax Act, 1961.

Further, Government of India had earlier introduced Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, in order to investigate and assess income and specific assets kept in foreign countries by people taxable in India, recover tax on it and take other actions like penalty and prosecution. With the objective of attracting and encouraging people to give information about such income and assets actionable under Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, reward up to Rs. 5 crore has been introduced in the new reward scheme. The amount has been kept high to make it attractive to potential sources in foreign countries. Under this Scheme, a person can get reward for giving specific information in prescribed manner about substantial tax evasion on income and assets abroad which are actionable under Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

Information under this scheme has to be given in prescribed manner to the Director General of Income Tax (Investigation) or an officer whom he may authorize in this behalf. Foreigners will also be eligible for reward under this scheme. Identity of the persons giving information will not be disclosed and strict confidentiality shall be maintained.

Details of the revised reward scheme are available in the Income Tax Informants Reward Scheme, 2018, copy of which is available in Income Tax offices and on the official website of Income Tax Department www.incometaxindia.gov.in .

(Surabhi Ahluwalia)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT.

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GST mop-up at Rs 94,016 crore in May

The mop-up from Goods and Services Tax (GST) in May stood at Rs 94,016 crore, better than the monthly average collections last fiscal, but below the record Rs 1.03 lakh crore collected in the previous month. However, as many as 62.47 lakh businesses filed their summary sales return GSTR-3B in May, higher than 60.47 lakh filed in April. Finance Secretary Hasmukh Adhia said that the total GST collection for May is higher compared to average monthly collection of Rs 89,885 crores of 2017-18. (PTI)

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Explain removal of 1 lakh companies from RoC, action against directors: HC to MCA

The Delhi High Court has sought a formal explanation from the Ministry of Corporate Affairs for its twin circulars of September 2017 that deregistered over 1 lakh companies for failure to file annual returns for three years and disqualified their directors. The court also temporarily revived the identification numbers of the disqualified directors to allow them to function in other active companies.

The directives were challenged in the court by two directors of five private companies struck off from the register of companies who said they were constrained in functioning as directors in three of their other companies that were active.

 “... issues raised in this writ petition require adjudication and are of grave importance so far as the working of the spirit, intent and objects of the Companies Act, 2013, more specifically the manner in which the respondents would operate Sections 164 and 248 of the enactment,” a two-judge bench comprising the acting chief justice Gita Mittal and justice C Hari Shankar said in their order.

The ministry, through circulars issued on September 6 and 12, 2017, removed over 1 lakh companies that had failed to file their annual returns and other documents from the register of companies in a crackdown on shell entities.

Over 3.5 lakh directors of such companies were disqualified with retrospective effect from April 1, 2014. Their director identification numbers (DINs) were deactivated, preventing them from acting in this capacity in other companies.

In the first such instance of its kind, the high court also revived the DINs of directors affected by the government’s move. “Their DINs will be revived forthwith,” the court said.

The order, allowing directors to function in other active companies for now, is expected to open the floodgates for other similarly placed individuals to move the courts for appropriate relief. The petition, filed through lawyers GP Madaan and Ishan Madaan, contended that the Companies Act of 2013 could not have been applied retrospectively to remove their companies from the register without first giving them a hearing under the 2016 rules.

It argued that the move to disqualify them retrospectively made all their earlier actions suspect under law. Besides, it would prevent them from filing papers for other companies which were otherwise active, adding to the already existing sick units.

The directors raised several important law points, including whether the 2013 law could penalise them for acts done before it came into force.

Companies can be struck off the register only after due notice, they argued. In this case, no such opportunity was given to the companies, they said.

The directors were not only disqualified from the companies struck off the list, but also new ones under Sections 164 (2) and 167 of the 2013 act. They contested the legality of Section 164 on the ground that it was borrowed from Section 274 (1) (g) of the Companies Act, 1956, which applied only to public limited companies. (Economic Times)

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Chartered Accountant is no more the person eligible for doing valuation of unquoted shares and securities

MINISTRY OF FINANCE 

(Department of Revenue) 

(Central Board of Direct Taxes) 

NOTIFICATION 

New Delhi, the 24th May, 2018 

INCOME-TAX S.O. 2087(E).—In exercise of the powers conferred by sub-section (2) of section 56 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:
1. (1) These rules may be called the Income-tax (6th Amendment), Rules, 2018.
    (2) They shall come into force from the date of their publication in the Official Gazette.

2. In the Income-tax Rules, 1962 (hereinafter referred to as the principal rules), in rule 11U, clause (a) shall be omitted.

3. In the principal rules, in rule 11UA, in sub-rule (2), in clause (b), the words “or an accountant” shall be omitted.

[Notification No. 23/2018/F. No.370142/5/2018-TPL]
PRAVIN RAWAL,
Dir. (Tax Policy and Legislation)

Note.- The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii) vide notification number S.O.969(E), dated the 26th March, 1962 and last amended by the Income-tax (Fifth Amendment) Rules, 2018, vide notification number S.O. 1558 (E), dated 11th April, 2018.

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Missed the March 31 deadline to file income tax return? Here's what you can do

March 31, 2018 was the deadline to file income tax returns (ITR) for the financial year 2015-16 and 2016-17. In case you haven't filed your ITR for FYs 2015-16 and 2016-17, you cannot file a belated return anymore.

If you have not filed your returns for these two FYs, read on to find out what you can do now:

File a Condonation of delay request for specific cases:
The income tax department can allow taxpayers to file returns post the deadline for specific cases. "The Central Board of Direct Taxes (CBDT) has issued a circular in this regard where if the taxpayer has tax refund pending or wish to carry forward his losses and missed the deadline of filing of tax returns, then he can file an application to the Income tax commissioner or the prescribed authority," explains Abhishek Soni, CEO, tax2win.in, a tax-filing firm.

These are the parameters based on which applications can be accepted or rejected by the income tax department:
a) The claim is correct and genuine
b) Case is based on genuine hardship on merits
c) Income is not assessable in the hands of any other person under the Income Tax Act
d) The refund has arisen as result of excess tax deducted or tax collected at source, advance tax or self-assessment tax.

The time limit to file such application is six years from the end of the assessment year for filing the return. (Assessment year is the year immediately following the financial year). Therefore, for such taxpayers who have missed the deadline of March 31, 2018, can file such application by 31 March 2023 (for FY 2015-16) and 31 March 2024 (for FY 2016-17) . In case of belated tax refund, no interest will be paid by the department to you.

The application will have to be disposed by the department within six months from the end of the month in which the application is received as far as possible.

If taxes are also payable by youIf you have not paid taxes for FYs 2015-16 and 2016-17, then experts advice that one should at least pay all your taxes and interest along with it as applicable under section 234A, 234B or 234C, even if they cannot file the ITR post March 31, 2018.

If all taxes are paid but return not filedIf the taxes you are supposed to pay have been cleared but if you have not filed your ITR before March 31, 2018, then you do not have the option to file their ITR now or to apply for condonation of delay. However, the department can issue a notice under section 271F for levying of penalty on non-filing of ITR. The maximum penalty in such a case is Rs 5,000. No penalty will be levied if there is a genuine reason for such non-compliance and if the income tax officer is satisfied with the reasons, adds Soni.

Actions that tax department might take against youFor non-filing of return, the department can take various actions against you. This includes issuing a notice or in the worst case scenario, you might get prosecuted and get a maximum jail term of seven years.

Naveen Wadhwa, DGM, Taxmann.com says "If TDS has been deducted from your income and you have not filed your ITR, then department can issue you a notice under 142 (1) (i) for non-filing of returns. A penalty may also be levied by the assessing officer of Rs 5,000 for non-filing of income tax returns."
Every taxpayer is required to file ITR if his/her total income exceeds the basic exemption limit. The department can issue you a notice under section 148 for income escaping the assessment for non-filing of ITR. You will be required to respond to that notice on the income tax e-filing website as well as file your ITR to comply with the notice issued by the tax officer.

Penalties under such case will be levied for under-reporting of incomes. For FY 2015-16, a penalty of 100-300 percent of the tax payable amount will be levied as per the discretion of the assessing officer. For FY 2016-17, a penalty of 50 percent of the tax payable amount will be charged, adds Wadhwa.

Soni says, "If a person has at least paid his taxes along with interest even if he/she cannot file the ITR after March 31, 2018 then in such a case, chances are he/she might not be liable to pay penalty for under-reporting of income."

Read more at:economictimes.indiatimes.com

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Income tax department wants to know a little bit more about you

The income tax department wants more information from you about your finances and business. The new income-tax return forms released by the Central Board of Direct Taxes (CBDT) for filing returns for the financial year 2017-18 have several new columns. These new forms for various categories of taxpayers are Sahaj (ITR1) , Form ITR-2, Form ITR-3, Form Sugam -ITR-4, Form ITR-5, Form ITR-6, Form ITR-7, and Form ITR-V.

By collecting more specific information from taxpayers — from seeking details about allowances of salaried persons not exempt from tax to matching direct and indirect tax numbers of businesspersons — the income tax department aims to check tax evasion.
“There are more than 25 key changes in the new ITR forms than in the previous ones. Some of these changes clearly suggest that the focus of new ITR forms is to get more information from unlisted companies, trusts and taxpayers who have opted for presumptive taxation scheme. Further, the ITR forms also require the business entities to report the GST transaction which would help the department to independently reconcile the transactions reported by them in income-tax return and GST returns,” said Naveen Wadhwa of Taxmann.com.

Below are the details of some of the extra information income tax department seeks from taxpayers.

1. The new Sahaj form wants you to disclose specific details about your salary. It seeks an assessee's salary details in separate fields and in a breakup format such as allowances that are not exempt, value of perquisites, profit in lieu of salary and deductions claimed under section 16. Though these details are provided in the Form 16 of a salaried employee, now they have to be mentioned in the tax return for clarity of deductions.

2. The new Sahaj form also seeks details about income from property such as gross rent received/ receivable/ letable value; tax paid to local authorities; annual value; interest payable on borrowed capital; and income chargeable under the head house property.

3. Under the ITR-4, assessees who have presumptive income from business and profession will have to furnish their GST registration number and its turnover. This is aimed at checking tax evasion by comparing direct and indirect tax numbers.

4. Instead of the simple (ITR)-1 form, non-resident Indians (NRIs) will have file returns using the ITR-2 which seeks more information. NRIs will also have to provide details of one foreign bank account for refunds.
5. Certain types of taxpayers are now required to mention registration number of the firm of chartered accountant which has done audit for the tax return.

6. Businesses will have to disclose income from property.

7. Firms are required to quote Aadhaar number of their partners or members. Similarly, in case of a trust, Aadhaar number of related functionaries have to be mentioned.
Read more at:economictimes.indiatimes.com

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