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.

Income Tax Department issues ₹64,700 Cr Refund in Current Fiscal, says FM Nirmala Sitharaman

There is a marked increase in the number of the income tax return filed through e-filing. The number of e-Returns submitted for Assessment Year 2018-19 is 6,49,39,586 as against 5,47,30,304 e-Returns filed for the Assessment Year 2017-18, thereby marking a remarkable increase of 18.65% over previous Assessment Year.

A total of 7.19 crore Income Tax Returns (ITRs) have been processed in the Financial Year 2018-19. The total amount of refund released in Financial Year 2018-19 is Rs. 1,61,457.6 Crore.

The Government has accorded high priority to issue refunds for all taxpayers including small taxpayers. Less than 0.5% of ITRs are selected for scrutiny, the majority of ITRs are processed expeditiously and refunds are issued. With greater adoption of information technology in processing of ITRs and emphasis on less intrusive verification, the time taken to process ITRs is constantly reducing. Refunds amounting to Rs. 64,700 crores have already been issued in this Financial Year till 18.06. 2019. The Government has made it mandatory from March, 2019 to issue income-tax refunds through ECS only, therefore, expediting direct credit of refunds to bank accounts. Further, all field authorities have been instructed to issue refunds up to Rs 5,000 without any adjustment against outstanding demand, if any.

The Government has initiated several measures to educate the taxpayers to e-file their ITRs. Outreach measures, including training in e-filing, conducting workshops and awareness programmes, are being undertaken by the Income Tax Department. Aayakar Seva Kendras (ASKs) have been established in all regional offices to address taxpayers’ concerns and guide them in e-filing their ITRs. The official website of the Income Tax Department offers step by step guidance on how to e-file the ITRs. The Government is also utilizing print media, audio and visual media as well as social media to educate people to file their ITRs through e-filing. Regular advertisements are placed in Newspapers and News Portals in internet each year during peak e-filing periods to educate and encourage taxpayers to submit their ITRs online. A total of 26.9 crore SMS and e-mails were sent to taxpayers in Financial Year 2018-19 reminding them for timely submission of ITRs and other important requirements.

Recently, in January, 2019, the Government has approved Integrated E-filing & Centralized Processing Centre (CPC) 2.0 Project of the Income Tax Department. The details of the CPC 2.0 Project are:

CPC 2.0 Project envisages pre-filling of ITRs by the Income-tax Department and its acceptance by the taxpayer so as to improve accuracy of information contained in the Return and drastically reduce the existing turnaround time taken in processing of Returns and issuance of refunds.

CPC 2.0 Project will process ITRs in a consistent, uniform, rule driven, identity blind manner. This would ensure fairness in tax treatment to all taxpayers irrespective of their status.(iii) The CPC 2.0 Project would significantly improve transparency and accountability of Income-tax Department as processing of returns and issuance of refunds would take place without any interface with the Department.

CPC 2.0 Project would adhere to international best practices and standards. It would keep the taxpayer informed by providing processing status update, speedy communication using mobile app, email, SMS and through website of the Income-tax Department.

CPC 2.0 Project envisages setting up of integrated contact centres for taxpayer’s assistance and undertaking outreach programs involving taxpayers and other stakeholders through digital media in an effective manner. Thus,

CPC 2.0 Project besides promoting the Government objective of promoting voluntary tax-compliance culture would also smoothen the process of e-filing and processing of ITRs and will also bring about a significant enhancement in services to the taxpayers.

This was stated by the Union Minister of Finance & Corporate Affairs, Nirmala Sitharaman in a written reply to a question in Lok Sabha today.

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CBDT Chief Slams Dept For Lackadaisical Attitude Towards Redressing Taxpayers’Grievances

Hon’ble PC Mody, the Chairman of the CBDT, has taken a stern view regarding the lackadaisical attitude of the department in the matter of addressing grievances of the taxpayers. He has pointed out that the rights and dignity of the taxpayer have to be safeguarded while enforcing higher standards of accountability on officers and staff. He has directed the senior officers of the department to personally ensure that all grievances of taxpayers are satisfactorily addressed in a timely manner.

Chairman, CBDT &
Special Secretary to the Government of India
Ministry of Finance/Department of Revenue
Central Board of Direct Taxes
North Block. New Delhi –110001


Tele : 23092648 &Telefax : 23092544

New Delhi, 21st June, 2019

Sub. : Timely and proper redressal of Public Grievances

As you all are aware, Grievance Redressal is a major aspect of the department’s public relations exercise as also one of the primary focus areas of the Government and it is monitored at the highest level. It is important for safeguarding the right s and dignity of the taxpayer on one hand while enforcing higher standards of accountability on officers and staff at the other.

2. It has been re-iterated from time to time through written and verbal injunctions that all the Pr. Chief Commissioners. Chief Commissioners I Director Generals and their subordinate officers shall ensure that grievance redressal is one of their focus areas. It has also been conveyed that the senior officers shall personally monitor specified number of grievances and will ensure that the same are resolved in their Regional Charge within the prescribed time of 30 days. In almost every video-conference the issue of expeditious resolution of grievances is also being highlighted by the Board.

3. However. inspite of all these efforts by the Board it is seen that the total number of pending grievances on CPGRAMS as on 20.06.20 19 is 2647 out of which 885 grievances are pending for more than 30 days. Likewise 34026 cases of e-Nivaran are still pending for resolution. These figures are a cause of serious concern and point to a lackadaisical attitude in the effective redressal of the grievance by the concerned authority.

4. Therefore. 1 would like you to ensure that all officers under your jurisdiction are directed to take requisite steps so as to reduce the avenues of grievances. Necessary steps must also be taken to redress all cases of CPGRAMS pending for more than 30 days. All e-Nivaran cases must also be resolved in a systemic manner adhering to the given time lines.


(P. C. Mody)

All Pr. Chief Commissioners of Income Tax/

Pr. Directors General of Income Tax
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HC set-aside order as AO concluded reassessment before assessee could file objections to reasons recorded

Section 147, read with section 148, of the Income-tax Act, 1961 - Income escaping assessment - Non-disclosure of primary facts (Objections of assessee) - Assessment year 2013-14 - Assessing Officer issued notice to initiate reassessment - Assessee requested to furnish reasons recorded for reopening - On day of furnishing reasons, re-assessment order was passed by Assessing Officer - Assessee filed preliminary objections on 27-12-2018 - Whether since assessee was not provided breathing time to furnish objections, and Assessing Officer proceeded to conclude re-assessment in hasty manner, impugned re-assessment was to be set aside - Held, yes [Para 7] [In favour of assessee/Matter remanded]

Refer:[2019] 106 23 (Karnataka)
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Where computer system of Income-tax Department could not rectify duplication of entry in old TAN and new TAN resulting in TDS mismatch, department could not withhold refund payable to assessee

Section 237 of the Income-tax Act, 1961 - Refund - General (TDS mismatch due to system error) - Assessment years 2007-08 to 2010-11 - Assessee had deducted and deposited TDS on payment under old TAN as well as new TAN due to human error - It resulted in TDS mismatch - Computer system could not rectify said error as well as duplication of entry - Whether department could not withhold refund payable to assessee; department should release refund amount payable to assessee - Held, yes

Refer:[2019] 106 22 (Bombay)
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MCA likely to amend LLP Act to track down shell companies

Recently, the Ministry of Corporate Affairs (MCA) has found that a number of companies that were converted into LLPs have doubled after the Government enhanced disclosure norms on companies with a view to crack down shell companies.
Since its inception, the MCA has tightened noose on the shell companies however, a few loopholes still remains intact,therefore, the MCA is looking to bring measures to amend the LLP Act whereby only small companies would be allowed to convert into LLPs.
Why such companies opted for conversion?
There is no denial that exemption provided to the LLPs under the LLP Actare more as compared to that of Companies. Due to enhanced disclosure norms, the Companies find it easy to convert into LLPs to enjoy the exemptions available to LLPs. The following exemptions to the LLP are:
    i. No Board Meeting: Unlike companies, the LLPs need not to require hold board meetings in a year.
   ii. No Annual General Meeting: Holding an AGM is a statutory requirement under the Companies Act whereas in case of LLP, no need to hold any AGM.
  iii. No Statutory Auditor: The Companies Act is compelled the Companies to appoint its statutory auditor of the year for period of 5 years. On the contrary, the LLP is exempted to have statutory audit unless turnover and contribution doesn't exceed in a financial year.
In the backdrop, the MCA had identified more than 16,500 shell companies and blacklisted more than 30,000 directors from the corporate sector. Various disclosure requirements have also been introduced by MCA which ACTIVE— Form for verification of physical address of registered office of Companies, DIR—3 KYC for annual KYC of the directors of the company, DPT—3 for disclosure of acceptance of deposits by the companies, MSME—1 form for reporting overdue by companies to MSME, etc. These disclosures have been introduced to trace down shell companies. MCA's move to tighten noose on LLPs will further plug in the loop holes that are used by companies for certain activities such as tax evasion, tax—avoidance and money laundering.
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Tax department may not get to reopen cases beyond 4 years

Only exception in case of a grave tax offence; proposal being discussed; final call to be taken soon.
These provisions are governed by Section 149 of the Income Tax Act. However, when it comes to issuing a notice for the extended period of six years, certain conditions apply. An officer can reopen a case only if a taxpayer has failed to file a return or hasn’t provided documents or information or disclosed all material facts necessary for assessment.
Detailed guidelines have been laid down for reopening assessments to ensure taxpayers are not unnecessarily harassed, which include recording the taxpayer’s satisfaction. Taxpayers can also challenge department’s bid to reopen assessments.

However, there is a growing view within sections of the tax department that reopening assessments for the extended period is problematic. “This provision has led to unnecessary litigation,” said the official cited above.

There have also been instances of assessing officers reopening cases to widen the ambit of any ongoing assessments on the grounds of non-disclosure of information.

Tax experts say that doing away with the extended assessment period will not only help achieve tax certainty for taxpayers, it will also help the department by improving chances of recovery.

“There could be instances where the taxpayer himself might not be traceable after such a long time,” said Amit Maheshwari, partner, Ashok Maheshwary & Associates LLP. “With advanced analytical tools and a much more proactive tax department, this reduction in the time limit for reopening is definitely achievable.”
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E-ACTIVE temporarily stopped for Tagging Non-Compliant Companies: MCA

The Ministry of Corporate Affairs ( MCA ) has informed that the facility to file the E-ACTIVE forms have been temporarily stopped to complete tagging of non-compliant companies and Directors. However, the same shall be restored soon with a facility to file with fees, the Ministry said in a statement.

“The Tagging of non-compliant Companies/Directors for not filing eForm Active(INC-22A) is in progress. To facilitate completion of the activity, e-filing of the form (ACTIVE) has been suspended temporarily. The same would be restored soon for filing purposes with fee as provided under the relevant rules once the Tagging activity is complete. Stakeholders may kindly take note and plan accordingly,” it said.

In February, the Ministry of Corporate Affairs had issued Companies (Incorporation) Amendment Rules, 2019 and Companies (Registration offices and Fees) Amendment Rules, 2019 which came into force from 25.04.19 with a view to enable common public to be aware of KYC (Know Your Company) status of the companies and their directors.

In the Rules, it has been mentioned that every company incorporated on or before the 31st December 2017 shall file the particulars of the company and its Registered Office, in E-Form ACTIVE (Active Company Tagging Identities and Verification).

Any company which has not filed its due financial statements under section 137 or due annual returns under section 92 or both with the Registrar shall be restricted from filing e-Form-ACTIVE unless such company is under management dispute and the Registrar has recorded the same on the registrar.

Companies which have been struck off or are under the process of striking off or under liquidation or amalgamated or dissolved, as recorded in the register, shall not be required to file e Form ACTIVE.

In case a company does not intimate the said particulars, the Company shall be marked as “ACTlVE-non-compliant” on or after the due date is liable for action under section 12 (9) of the Act.

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Missed the claim in the income tax return, check out the possible remedies!

Recently, the government introduced several measures to move towards a tax compliant regime and to widen the tax base. Timely filing of income tax returns has been one of the top priorities on the radar of the government. To align with this stance, the government has introduced various provisions in the Income tax Act (the Act), such as denying the carry forward of losses on belated return, late filing fees for belated return, and similar such measures.

As per section 80A(5) of the Act, if the claim for deductions under section 10A or section 10AA or section 10B or section 10BA or under any provisions of Chapter C – "Deduction in respect of certain incomes" is not made in the income tax return, no deduction shall be allowed to the taxpayer. The Finance Act, 2018 has substituted section 80AC of the Income-tax Act with effect from 1 April 2018 (assessment year 2018-19) which provides that no deduction under Chapter C – "Deduction in respect of certain incomes" shall be allowed unless the income tax return is filed on or before the due date.

Therefore, it is extremely important that income tax return is filed on or before the due date for claiming incentive deductions under the Act. However, situations may arise where a taxpayer may end up not claiming eligible deduction in the return or may claim incorrect amount of deduction in the income tax return. In such a situation, the taxpayer may want to make fresh claim or modify its claim respectively. In such an event, the possible remedies could be as under:

Revised Return

The most feasible option before the taxpayer is to make fresh claim or modify the claim by filing a revised return. Revised return can be filed if taxpayer has made either any omission or any wrong statement in the original return. The time limit for filing revised return is before the end of the relevant assessment year or the completion of assessment, whichever is earlier.

Claim during the assessment proceedings

In a situation where claim is not made by filing revised return, taxpayer may make claim during the course of the assessment proceedings. However, the tax officer may not admit fresh claim made during the course of the assessment proceedings by relying on the decision of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. v. CIT [2006] 157 Taxman 1/284 ITR 323 (SC). The apex court in Goetze (India) Limited had held that the taxpayer cannot make a claim for deduction during the course of the assessment proceedings except by way of filing a revised return.

In this connection, reference may be made to the CBDT Circular No.14-XL (35) dated 11 April 1955. In the aforesaid Circular, CBDT has clarified that the officers of the department must not take advantage of the ignorance of taxpayer as to his right. The officers should draw attention of taxpayers to any refunds or reliefs to which they appear to be clearly entitled but which they have omitted to claim for some reason or other.

Reference is also made to Article 265 of the Constitution of India, which states that revenue department can collect only legitimate taxes due from the taxpayer.

In cases, where a taxpayer wants to modify a claim already made in the return, the decision of Goetze India Limited may not apply based on various judicial precedents Pr. CIT v. Oracle (OFSS) BPO Services Ltd. [2019] 102 396 (Delhi High Court); Solaris Bio Chemicals Ltd. v. Dy. CIT [2012] 25 182/53 SOT 195 (URO) (Delhi Tribunal); CITv. Natraj Stationery Products (P.) Ltd. [2009] 177 Taxman 168/312 ITR 22 (Delhi High Court).

Reference can also be made to the judicial precedents Manohar Reddy Basani v. ITO [2018] 94 321/171 ITD 279 (Hyderabad - Tribunal); CIT v. Abhinitha Foundation (P.) Ltd. [2017] 83 100/249 Taxman 37/396 ITR 251 (Madras High Court) wherein it was held that deduction cannot be denied to the taxpayer merely because it was not claimed in the income tax return.

Claim during the appellate proceedings
It is pertinent to note that the Hon'ble Supreme Court in the case of Goetze (India) Ltd. has observed that its decision is limited to the power of the assessing authority to admit new claim made during the course of the assessment proceedings and does not impinge on the power of the Income-tax Appellate Tribunal. The courts in various judicial precedents have held that a taxpayer may raise additional claims before the appellate authorities i.e. Commissioner of Income tax (Appeals) CIT v. Pruthvi Brokers & Shareholders (P.) Ltd. [2012] 23 23/208 Taxman 498/349 ITR 336 (Bombay High court); CIT v. Gokuldass & Co. [2002] 122 Taxman 849/253 ITR 633 (Rajasthan High Court) or Income tax Appellate Tribunal National Thermal Power Company Ltd. v. CIT [1998] 229 ITR 383 (Supreme Court); Jute Corpn. of India Ltd. v. CIT [1990] 53 Taxman 85/187 ITR 688 (Supreme Court); Pruthvi Brokers & Shareholders (P.) Ltd. (supra); Orissa Cement Ltd. v. CIT [2001] 117 Taxman 625/250 ITR 856 (Delhi High Court); Ooppootil Kurien & Co. (P.) Ltd. v. CIT [2003] 132 Taxman 530/[2004] 266 ITR 409 (Kerala High Court) and these appellate authorities have the powers to consider the claim raised by the taxpayer.

From the above discussions, it may be observed that even if a taxpayer fails to make claim in the return, the same may be made by filing a revised return or during the course of assessment/appellate proceedings. The best alternative may be to file the revised return, wherever possible, as other alternatives may lead to prolonged litigation.

Refer:[2019] 104 262 (Article)
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No denial of exemption to school merely because it earned profit from selling books and uniforms to students

Where assessee, a society, was running a school and during year it had sold books and uniform to its students and earned a certain profit on purchase and sale of books and uniform and Assessing Officer denied exemption under section 10(23C)(iiiad) to assessee on plea that purchase and sale of books and uniform was not educational activity, exemption under section 10(23)(iiiad) could not be denied to assessee as selling of books and uniform to students was part of educational activity only

Refer:[2019] 104 164 (Delhi - Trib.)
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ICAI waives off condonation fee on all applications forms filed between between 01st April 2019 to 30th June 2019

ICAI’s Members and Student services have been made online, in digitized form on a new platform which works on a Self Service Mode on the Self Service portal (SSP). Application forms are available online now barring a few which will also be available shortly. Kindly visit e-services on

ICAI has decided to waive off delay condonation fee on all application forms with transaction dates between 01st April 2019 to 30th June 2019 and submitted online by 31st July 2019.

The platform stabilization is underway & progressing to provide a user friendly interface. In the interim, all stakeholders are requested to kindly bear with us and continue to extend their support. We are thankful to ICAI family for understanding the implementation challenges.

The members and students are re-assured that SSP life Cycle Portal will be in full stream in next few days time and we regret for inconvenience caused to you.

In case of query may call on 0120-4648888 or email and
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