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. 2 CPC now is Withdrawing Notice u/s 139(9) with the remarks that it has been issued inadvertently.

43.67 lakh biz file initial GST returns for October

New Delhi, Nov 21 (PTI) As many as 43.67 lakh businesses have filed the initial GSTR-3B returns for the month of October -- the highest monthly return filing within due date, GST Network said today.

The last date of GSTR-3B filing, which is the initial sales return, for October was yesterday.

Around 56 per cent of the registered taxpayers filed their GSTR-3B returns for October within due date.

"The number of taxpayers filing their GSTR-3B returns is showing marked improvement month after month with about 43.67 lakh of them filing their GSTR-3B returns for October till November 20, 2017, the highest so far," GSTN said in a statement.

As many as 39.33 lakh returns were filed within due date for September and 28.46 lakh for August and 33.98 lakh for July.

"There is steady rise in the number of taxpayers filing their GSTR-3B returns every month which is encouraging to see.

The trend of taxpayers filing their returns on the last day continues though. Taxpayers are urged to file their returns early to avoid last minute hassles," GSTN CEO Prakash Kumar said.

As many as 14.76 lakh taxpayers filed their returns on the GST Network portal yesterday.

Punjab took the lead once again over all other states in filing the highest number of GSTR-3B returns for October.

About 73.09 per cent of the taxpayers in Punjab filed their GSTR-3B returns for October so far, GSTN said.(PTI)
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ITAT slams AO for denying sec. 54B relief if assessee duly proved that sold land was used for growing crops

Where assessee had provided relevant material which indicated growing of dry crops in two assessment years prior to sale of land, exemption under section 54B was to be granted

Refer:[2017] 87 151 (Pune - Trib.)
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Benami assets: I-T scanning profiles of property registered over Rs 30 lakh

The Income Tax Department is matching the "tax profiles" of all property registrations of above Rs 30 lakh under the provisions of the anti-Benami Act, as action against illicit asset holders is set to intensify, the CBDT chief said today.

Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra said the taxman is also investigating those shell companies and their directors whose operations were recently "debarred" by the government as part of the drive to check black money generation through their abuse.

The top boss of the I-T department said that till now, the taxman has attached 621 properties, including some bank accounts, and the total amount involved in these cases, being probed under the Benami Transactions Act, is about Rs 1,800 crore.

"We will destroy all instruments that are used to convert black money into white. This also includes shell companies. Also, the department is checking the income tax profiles of all properties which have a registry value of over Rs 30 lakh.

"We get this information under the law. If these profiles are found suspicious or incorrect, action will be taken (under the Benami Act)," Chandra said.

He made the remarks while interacting with reporters after inaugurating the Income Tax Department pavilion at the India International Trade Fair (IITF) which began at Pragati Maidan here today.

Chandra said they are taking the Benami assets cases "very seriously" and the tax officials have done a lot of work on this front.

"We have opened 24 units (of the I-T to implement the anti-benami Act) all over the country. We are getting information from different sources," he said.

"Our efforts in this direction are being intensified further," he said.

Chandra said that the taxman is also matching the data "of shell companies which have been debarred recently".

If these companies have some benami proerty or any other financial transaction that the I-T department has received and that is not matching, action will be taken, he said.

After Prime Minister Narendra Modi announced the withdrawal of Rs 500 and Rs 1,000 notes, the two highest value banknotes of the time, from circulation on November 8 last year, the I-T department had warned people against depositing their unaccounted banknotes in accounts maintained by someone else.

Such an act, it had said, would attract criminal charges under the Benami Property Transactions Act, 1988, applicable on both movable and immovable properties.

The I-T department is the nodal department to enforce the Benami Act in the country.

The department started initiating actions under the new Benami Transactions (Prohibition) Amendment Act, 2016 from November 1 last year.

The law provides for a maximum punishment of seven years in jail and a fine.

Refer:Economic Times

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CBDT may shelve plan to seek corporate tax estimates in advance

Giving corporates and professionals a breather, the Central Board of Direct Taxes may junk its proposal directing them to submit their tax payment estimate for the next two quarters in advance.

In September, the CBDT came up with a draft notification directing companies with an annual income of ₹1 crore and professionals with ₹50 lakh income per annum to report estimates of their current income, tax payments and advance tax liability on a voluntary basis.

In case the income estimate is less than the income for the previous corresponding period by ₹5 lakh or 10 per cent, whichever is higher, the assessee was supposed to give another estimate of income as on December 31, before the end of this year.

The CBDT had given 45 days for assessees to prepare the estimate and submit it by November 15. However, the Board has not indicated a date till when it will receive comments on the draft notification and notify the final norms.

Tax experts feel that Board may have put the proposal on the back-burner as it has not notified the final norms even as the deadline for filing the first set of details is just days away.

The CBDT did not respond to a mail sent by BusinessLine seeking clarification.

The proposal might have been put on the back-burner to avoid attracting the wrath of businessmen, especially with the Gujarat election next month and the marked slowdown in the economy.

Moreover, the government has been facing the heat for the pain caused by GST and demonetisation on the economy.

“With less than a week to go, I do not think CBDT will rush with the notification and make people abide by it without giving sufficient time.

“The new norms, even if notified, will not lead to any additional revenue for the government as CBDT collects interest of 1 per cent per month on shortfall in tax payment from professionals and corporates,” said tax expert.

The proposed changes were aimed at getting access to a new set of data on estimated income for the financial year, which will help the tax department identify sectors and regions where tax receipts are lagging, besides boosting the department’s revenue mobilisation steps.

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No addition in absence of proof that ‘Katrina Kaif’ received cash payment for various appearance and shows

Where in case of assessee, AO made addition to her income in respect of cash payments received for various appearances and shows relying upon documents seized in course of search carried out in case of an employee of her managing agency, in view of fact that assessee had categorically denied of having received cash payment, secondly, an affidavit was filed by managing agency denying any cash payment received on assessee's behalf and, finally, a statement was made by searched person herself submitting that she could not state anything about cash receipts in question as documents seized related to period prior to her employment, impugned addition was not sustainable

Refer:[2017] 87 116 (Mumbai - Trib.)
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Aadhaar linking becomes must for insurance policy; check deadlines for PPF, bank account, mobile, PAN

Get ready to link your insurance policy with Aadhaar. In a new development, Insurance Regulatory and Development Authority of India (IRDAI) has made it mandatory to link existing policies and new policies with Aadhaar. The latter is must for both life and general insurance policies like travel, home, heath and motor. While making the announcement, the regulator referred to Central government's gazette notification dated Ist June, 2017, wherein it notified the Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2017 and made Aadhaar and PAN/Form 60 mandatory for availing financial services including insurance and also for linking the existing policies with the same.
It further said, "The Authority clarifies that, linkage of Aadhaar number to Insurance Policies is mandatory under the Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2017."
Lately, Aadhaar has been made necessary for a host of financial services like PPF, NSC, KVP apart from bank accounts, mobile numbers and to avail numerous social security schemes like pension, scholarship and LPG connection. However, before you begin linking your Aadhaar, check the deadlines for various services.
Deadline: Dec 31, 2017If you have been banking on your post office deposits like PPF, make sure you link your 12-digit Aadhaar with it soon. Even other investments like NSC and KVP require Aadhaar verification. "Existing depositors who have not provided Aadhaar number at the time of application for such deposit "shall submit his Aadhaar number to the post office savings bank or deposit office concerned, on or before December 31, 2017," said government notification. In case Aadhaar is not generated, one need to provide the proof of application for enrolment into Aadhaar.
Deadline: Dec 31, 2017Linking Aadhaar-PAN is mandatory for processing of income tax returns (ITRs) for assessment year 2017-18. While earlier the deadline was August 31, the Central Board of Direct Taxes (CBDT) extended the last date to December 31, 2017 for easy compliance by taxpayers. You can link the PAN to Aadhaar by login to the income tax filing website by entering PAN (User ID), password and your date of birth. Now click on 'Profile Settings' tab and select the last option 'Link Aadhaar'. You are required to enter details like name, date of birth and gender as per PAN records and also your Aadhaar number. Enter the captcha code and submit.
Mobile SIM
Deadline: February 2018If you have obtained your phone SIM card a year or a two back, it is unlikely to have been Aadhaar-verified. You can link your Aadhaar with your SIM card by walking into the retail outlet of your telecom operator along with Aadhaar document and link the two by February next year. Failure to do so may see your SIM card getting deactivated by the operator. Here's how you can link it.
Go to your telecom operator shop with Aadhaar Card
Ask them to link Aadhaar number with mobile number by filling up a re-verification form.The operator will send a verification code on the number which you're going to verify.Provide the verification code to the operatorAlso, give your bio-metric expressionsYou'll receive a confirmation message, simply type Y and send it to themIn next 24 hours the verification process will be completed
Bank account/Mutual Funds
Deadline: Dec 31, 2017After Dec 31, 2017, your bank account will cease to be operational if it's not linked with Aadhaar. Also the government won't open any account which doesn't fulfill Aadhaar-based Know Your Customer(KYC) process. The same is needed for investing in a mutual fund. With an Aadhaar-based KYC, you don't need to provide your Id , Address proof and relieves you of in-person verification too. This too needs to be linked till the end of this year. If your bank account is not linked with Aadhaar, you can link Aadhaar with your bank account in various ways.To link it through net banking, you have to follow the following process;Click on the link that says "Aadhaar Seeding Option"Enter your Adhaar number. You will get a screen with a transaction number and the number of days required to complete it. When it is done, you get an alert from your bank saying it is complete.You can also link Aadhaar throug SMS by sending UID (Space) Aadhaar number (Space) to the bank via SMS. When it gets linked, you will get an SMS alert about it.Another way is to visit branch. Give a photocopy of your Aadhaar card to the bank representative. After necessary verification, the account will be linked and customer would be informed via SMS.
Social security Schemes
Deadline: Dec 31, 2017In order to correctly identify various beneficiaries of its social security schemes, government moved ahead with making Aadhaar declaration mandatory for welfare schemes like pension, scholarships etc. Lately, the government extended the September 30 deadline by three months.

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Delhi HC struck down some provisions of ICDS which intend to overrule judicial precedents

Income Computation and Disclosure Standards (ICDS)are intended to prevail over the judicial precedents that are contrary. Section 145 permits Central Government to notify ICDS but not to bring about changes to settled principles laid down in judicial precedents which seek to interpret and explain statutory provisions contained in the Income-tax Act (Act)

• Article 265 of the Constitution of India states that no tax shall be levied or collected except under the authority of law. The Section 145(2) does not permit changing the basic principles of accounting that have been recognized in various provisions of the Act unless, of course, corresponding amendments are carried out to the Act itself.

• In case the ICDS seeks to alter the system of accounting, or to accord accounting or taxing treatment to a particular transaction, then the legislature has to amend the Act to incorporate desired changes.

• The Central Government cannot do what is otherwise legally impermissible. Therefore, the following provisions of ICDS are held as ultra vires and are liable to be struck down:-
(1) ICDS I : It does away with the concept of 'prudence' and is contrary to the Act and to binding judicial precedents. Therefore, it is unsustainable in law.
(2) ICDS II : It pertains to valuation of inventories and eliminates the distinction between a continuing partnerships in businesses after dissolution from the one which is discontinued upon dissolution. It fails to acknowledge that the valuation of inventory at market value upon settlement of accounts on a partner leaving which is distinct from valuation of the inventory in the books of the business which is continuing one.
(3) ICDS III : The treatment of retention money under Paragraph 10 (a) in ICDS-III will have to be determined on a case-to-case basis by applying settled principles of accrual of income.
a. By deploying ICDS-III in a manner that seeks to bring to tax the retention money, the receipt of which is uncertain/conditional, at the earliest possible stage, irrespective of the fact that it is contrary to the settled position, in law, and to that extent para 10 (a) of ICDS III is ultra vires.
b. Para 12 of ICDS III, read with para 5 of ICDS IX, dealing with borrowing costs, makes it clear that no incidental income can be reduced from borrowing cost. This is contrary to the decision of the SC in CIT v. Bokaro Steel Limited [1999] 102 Taxman 94 (SC).
(4) ICDS IV : It deals with the bases for recognition of revenue arising in the course of ordinary activities of a person from sale of goods, rendering of services and use by others of the person's resources yielding interest, royalties or dividends.
a. Para 5 of ICDS-IV requires an assessee to recognize income from export incentive in the year of making of the claim, if there is 'reasonable certainty' of its ultimate collection. This is contrary to the decision of the SC in Excel Industries [2013] 38 100 (SC).
b. As far as para 6 of ICDS-IV is concerned, the proportionate completion method as well as the contract completion method have been recognized as valid methods of accounting under the mercantile system of accounting by the SC in CIT v. Bilhari Investment Pvt. Ltd. [2008] 168 Taxman 95 (SC). Therefore, to the extent that para 6 of ICDS-IV permits only one of the methods, i.e., proportionate completion method, it is contrary to the above decisions, held to be ultra vires.
(5) ICDS VI : It states that marked to market loss/gain in case of foreign currency derivatives held for trading or speculation purposes are not to be allowed that is not in consonance with the ratio laid down by the SC in Sutlej Cotton Mills Limited v. CIT [1979] 116 ITR 1 (SC).
(6) ICDS VII : It provides that recognition of governmental grants cannot be postponed beyond the date of accrual receipt. It is in conflict with the accrual system of accounting. To this extent, it is held to be ultra-virus.
(7) ICDS VIII : It pertains to valuation of securities.
a. For those entities which aren't governed by the RBI to which Part A of ICDS VIII is applicable, the accounting prescribed by the AS has to be followed which is different from the ICDS.
b. In effect, such entities are required to maintain separate records for income-tax purposes for every year, since the closing value of the securities would be valued separately for income-tax purposes and for accounting purposes.
Refer:[2017] 87 92 (Delhi)
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Direct Tax Collections for F.Y. 2017 - 2018 show Growth of 15.2% up to October, 2017

Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi,7th November, 2017.


Direct Tax Collections for F.Y. 2017-2018 show Growth of 15.2% up to October, 2017

The provisional figures of Direct Tax collections up to October, 2017 show that net collections are at
Rs. 4.39 lakh crore which is 15.2% higher than the net collections for the corresponding period of last year. Net Direct Tax collections represent 44.8% of the total Budget Estimates of Direct Taxes for F.Y. 2017-18 (Rs. 9.8 lakh crore). Gross collections (before adjusting for refunds) have increased by
10.7% to Rs.5.28 lakh crore during April-October, 2017. Refunds amounting to Rs. 89,507 crore have been issued during April, 2017 to October, 2017.

(Surabhi Ahluwalia)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT.
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Assessment completed without issue of scrutiny notice was void though assessee had participated in proceedings

Where notice was not issued by Assessing Officer under section 143(2) before passing order under section 143(3) read with section 147, assessment made by him was bad in law

Refer:[2017] 86 275 (Kolkata - Trib.)
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Deadline for linking Aadhaar and PAN extended to December 31

There is good news for taxpayers as the income tax department has extended the deadline to link PAN with Aadhaar by 4 months to December 31. The department had earlier said that tax returns filed without linking of Aadhaar and PAN would not be taken up for processing unless the two were linked by August 31, 2017.

This is a huge relief to those who had filed their income tax returns (ITR) by the due date of August 5, 2017, but were not able to link their PAN with Aadhaar by August 31, 2017.

The revenue department will notify December 31 as the due date for linkage. This comes at a time when the government has granted a similar extension for the furnishing of Aadhaar for availing the benefits of various social welfare schemes.

Also, the Supreme Court is hearing petitions challenging the government's decision on Aadhaar and has posted the matter for next hearing in November.

Section 139 AA (2) of the Income Tax Act says that every person having PAN as on July 1, 2017, and is eligible to obtain Aadhaar, must intimate his Aadhaar number to the tax authorities. However, those categorised as non-resident Indians as per income tax laws, people who are not citizens of India, those above 80 years of age, and residents of Assam, Meghalaya and Jammu and Kashmir had been exempt from this requirement if they do not have Aadhaar or an Aadhaar enrolment ID.
The tax department had on July 31 stated that "unless a finding is made that Aadhaar is constitutionally not valid, tax return filers will need to link their PAN with Aadhaar by August 31, 2017."

Incidentally, December 31 is also the deadline for people to link their bank accounts with Aadhaar.

The Central Board of Direct Taxes (CBDT) in a press release dated July 31, 2017, had extended the deadline to file ITR by 5 days to August 5. Additionally, taxpayers were allowed to link PAN with Aadhaar any time before August 31, 2017 in order for their ITRs to be taken up for processing by the department. The press release of July 31 can be read here .

The deadline for filing ITR was extended because many taxpayers were unable to file their ITRs as they could not link Aadhaar with PAN. The tax department had received several complaints from taxpayers expressing their inability to link the two identification numbers as their names in the Aadhaar and PAN databases were different.

The deadline to link PAN with Aadhaar by August 31, 2017 was meant for those who had filed their ITR by August 5, 2017 but had not linked PAN with Aadhaar. However, if you are not required to file ITR as per income tax laws, i.e., your total income is below the exemption limit of Rs 2.5 lakh in a financial year, the deadline to link the same is yet to be notified by the government.

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