Ministry of Finance
Legislation UpdatesStatutes/Bills/Ordinances

   

On 16-9-2022 the CBDT has issued revised guidelines for compounding of offence under the Income-Tax Act, 1961 to simplify and facilitate compounding of offences under Income Tax Act, 1961 with reference to various offences covered under the prosecution provisions of the Act.

Key Points:

  • Offence punishable under Section 276 of IT Act, 1961 have been made compoundable. Section 276 deals with Removal, concealment, transfer or delivery of property to thwart tax recovery.

  • Offence under Direct Taxes Laws where case of an applicant, who has convicted earlier with imprisonment for less than two years being previously non-compoundable has now been made compoundable.

  • Relaxation of time: Time limit for acceptance of compounding application has been relaxed with the approval of Chief Commissioner of Income Tax from the earlier limit of 24 months to 36 months now. In such cases where relaxation has been provided compounding charges would be @1.5 times more than the normal compounding charges.

  • Complexity in procedure has been simplified now by intimating the applicant that the application is found acceptable or non-acceptable along with compounding charges.

  • Compounding charges for failure to pay Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) @2% per month up to 3 months and 3% per month beyond 3 months have been reduced to 1% and 2% respectively.


*Disha Srivastava, Publication Assistant has reported this brief.

Legislation UpdatesRules & Regulations

   

The Central Board of Direct Taxes has notified Income-tax (26th Amendment) Rules, 2022 to amend Income-tax Rules, 1962.

The amendment inserts a new  Rule 40G in the Income-tax Rules, 1962, relating to Refund Claim under Section 239-A has been inserted. It provides that a claim for refund under section 239-A shall be made in Form No. 29D and must be accompanied by a copy of an agreement or other arrangement referred to in section 239-A. The claim may be presented by the claimant himself or through a duly authorised agent.

In the principal rules, Form No. 29D relating to Application by a person under section 239-A of the Income-tax Act, 1961 for refund of tax deducted has been inserted.

Legislation UpdatesNotifications

   

The Central Government has notified that the provisions of  section 206-C (IG) of the Income Tax Act, 1961 shall not apply to a person (being a buyer) who is a non-resident in terms of section 6 of the Act and who does not have a permanent establishment in India.

Legislation UpdatesRules & Regulations

The Central Board of Direct Taxes notifies Income-tax (Twenty Second Amendment) Rules, 2022 to amend the Income-tax Rules, 1962. The amendment introduces a provision dealing with Application u/s 158AB to defer filing of appeal before Tribunal or jurisdictional High Court.

Key points:

  • Rule 16 which specifies “Declaration under Section 158A” has been renumbered to Rule 15A.
  • New Rule 16 which specifies “Application under section 158AB to defer filing of appeal before the Appellate Tribunal or the jurisdictional High Court” has been inserted:

“The application referred to in sub-section (2) of section 158AB, required to be made before the Appellate Tribunal or the jurisdictional High Court, as the case may be, shall be made in Form No. 8A by the Assessing Officer”

  • In Appendix II a new Form 8A has been inserted.
Legislation UpdatesNotifications

   

The Central Government has specified a token which qualifies to be a virtual digital asset as non-fungible token within the meaning of sub-clause (a) of clause (47A) of section 2 of the Income-tax Act, 1961 but shall not include a non-fungible token whose transfer results in transfer of ownership of underlying tangible asset and the transfer of ownership of such underlying tangible asset is legally enforceable.

Legislation UpdatesRules & Regulations

On June 24, 2022, the Ministry of Finance has notified Goods and Services Tax (Period of Levy and Collection of Cess) Rules, 2022, through which it has extended the time period for levy of compensation cess up to 31st March 2026.

The Goods and Services Tax (Compensation to States) Act, 2017 provides for compensation to states for any loss in revenue due to the implementation of GST. Earlier the Government fixed the last date for levy of GST compensation cess till 1st July 2022, however it has now been extended till 31st March 2026.

Income Tax Appellate Tribunal
Case BriefsTribunals/Commissions/Regulatory Bodies

Income Tax Appellate Tribunal (ITAT), Bangalore: The coram of N.V. Vasudevan (Vice President) and Padmavathy S. (Accountant Member), considered the instant appeal, wherein, the issue that came to the forefront was when can a loss due to embezzlement, be allowed as a deduction during computation of income tax. It was held that the loss should be allowed as a deduction in the year in which the embezzlement was discovered.

Facts and Submissions: Relating to the Assessment Year 2011-12, the matter concerned a District Central Co-operative Bank [Assessee]. The assessee had been conducting the banking business governed by Karnataka State Co-operative Societies Act, 1959 and the rules and regulations of NABARD and RBI Guidelines for Banking activities. The assessee had debited an amount of Rs.7,50,99,000/- as provision for misappropriation in the P&L [profit and loss] account and computed income from business after such deduction.

The assessee had reduced this amount from loans and advances in the balance sheet. It was explained by the assessee that the Co-op Department of Government of Karnataka conducted an enquiry on misappropriation in one of assessee’s branch at Honalli. The assessee submitted that a fraud occurred in the bank and was under enquiry by the Co-operative Societies Enquiry Office as per the provisions of S. 64 of Karnataka Co-operative Societies Act, 1959. It is very difficult to recover the amount misappropriated, as such a recovery depends upon the enquiry report as per the afore-mentioned provision.

The Assessing Officer [A.O.] however, had a contrary opinion after examining the assessee’s claim and held that there was a reasonable prospect of getting the misappropriated amount back since, the bank has already attached the assets of the persons who indulged in fraud.

Aggrieved by the order of the AO, the assessee preferred appeal before the Commissioner Income Tax (Appeals). The CIT(A) deleted the addition made by the AO and held that the assessee is entitled to claim deduction of bad debts purely based on mere write- off. Aggrieved by this decision, the Revenue preferred the instant appeal.

Observations and Decision: Upon perusing the facts and submissions, the Tribunal observed that the CIT(A) had proceeded on an erroneous presumption that the sum claimed as a deduction was on account of write- off bad debts; the presumption being factually wrong because it was a case of embezzlement by the employee of the assessee which resulted in a loss to the bank.

The Tribunal then pointed out that neither A.O. nor the CIT (A) had considered a crucial question as to when a deduction on account of a loss due to embezzlement can be allowed as a deduction. The Tribunal noted that the Central Board of Direct Taxes issued a Circular- No. 35-D (XLVII-20) [F. No. 10/48/65-1T(A-0], dt. 24-11-1965, which specifically pertains to the query raised by the Tribunal. Upon examining clause-1 of the Circular, the Tribunal pointed out that loss due to embezzlement by employees should be treated as a loss incidental to business.

It was thus noted by the Tribunal that there is no doubt that the assessee suffered a loss on account of embezzlement, in the sense that a fraud was carried out in one of its branches. Therefore, as per the afore-mentioned CBDT Circular, the loss by the assessee should be allowed as a deduction.

The Tribunal decided that since the above aspect was not examined by anyone involved in the matter (assessee or A.O. or CIT), it is appropriate that the A.O. considers the matter afresh in the light of the referred CBDT circular, only on the question as to in which year the loss has to be allowed as a deduction. The Tribunal also directed the A.O. to allow deduction in the year in which the embezzlement by the employee was discovered by the assessee.

The appeal of the Revenue was allowed for statistical purposes.

[ACIT v. Davangere District Central Co-op Bank Ltd., 2022 SCC OnLine ITAT 264, decided on 17-06-2022]


Advocates who appeared in this case :

Sanjay Kumar S. K, CIT(DR)(ITAT), for the Revenue;

Suresh Muthukrishnan, CA, for the Assessee.


*Sucheta Sarkar, Editorial Assistant has reported this brief.

Legislation UpdatesNotifications

On 16th June, 2022, the Central Board of Direct Taxes (CBDT) has exempted TDS on lease rentals under Section 194-I of Income Tax Act, 1961 paid to Aircraft Leasing Units vide notification no. 65/2022/F. No. 275/30/2019-IT(B). This will come into force on July 1, 2022.Exemption is applicable on following conditions:

The Lessor must

  • furnish a statement-cum-declaration in Form No. 1 to the lessee giving details of previous years relevant to the ten consecutive assessment years for which the lessor opts for claiming deduction under sub-section (IA) read with section (2) of the section 80LA of the Income-tax Act; and
  • such statement-cum-declaration shall be furnished and verified in the manner specified in Form No.1, for each previous year relevant to the ten consecutive assessment years for which the lessor opts for claiming deduction under sub-section (IA) read with section (2) of the section 80LA of the Income-tax Act.

The Lessee must

  • not deduct tax on payment made or credited to lessor after the date of receipt of copy of statement-cum-declaration in Form No. 1 from the lessor; and
  • furnish the particulars of all the payments made to lessor on which tax has not been deducted in view of this notification in the statement of deduction of tax referred to in sub-section (3) of section 200 of the Income-tax Act read with rule 31A of the Income-tax Rules, 1962.

The above relaxation shall be available to the lessor during the said previous years relevant to the ten consecutive assessment years as declared by the lessor in form 1 which specifies “To be furnished by a unit engaged in the business of leasing of aircraft located in International Financial Services Centre to the Lessee”


*Shubhi Srivastava, Editorial Assistant has reported this brief.

CBDT
Legislation UpdatesNotifications

On 14th June, 2022, Central Board of Direct Taxes notified amendment in Notification S.O. 1790(E) of Income Tax Department, dated 5th June 2017. Effective from 1st April, 2023, this notification seeks to amend Cost Inflation Index (CII) for the Financial Year 2023-24.

With the insertion of serial number 22 in Table of the said Notification, the inflation rate has risen from 317 in the previous assessment year to ‘331’ for 2022-23.

Base year being 2001, the prices of goods and services have been largely affected by the rate at which the inflation index is rising making purchasing power of end users depleting at increasing rate. While government each year officially notifies the CII, it calculates the CII based on previous year rate and Base year.


*Shubhi Srivastava, Editorial Assistant has reported this brief.

CBDT
Legislation UpdatesRules & Regulations

The Central Board of Direct Taxes has notified the Income-tax (30th Amendment) Rules, 2021 vide notification dated 24th September, 2021.

  • The amendment has amended Rule 10D of the Income Tax Act and further extended the applicability of provisions under Rule 10D for assessment years 2020-21 and 2021-22. They shall be deemed to have come into force from the April 1, 2021.
  • Rule 10D of Income tax Rules states that where an eligible assessee has entered into an eligible international transaction and the option exercised by the said assessee is valid, the transfer price declared by the assessee in respect of such transaction shall be accepted by the income tax authorities, if it is in accordance with the circumstances provided in the rule.

 


*Tanvi Singh, Editorial Assistant has reported this brief.

CBDT
Legislation UpdatesNotifications

On September 17, 2021, the Central Board of Direct Taxes (CBDT)  has issued a notification  that no deduction of tax shall be made on the following payment under section 194A of the Income-tax Act, 1961, which specifies, Interest other than “interest on securities”, made by a scheduled bank located in a specified area, to a member of Scheduled Tribe residing in any specified area, as referred to in clause (26) of section 10 of the Income-tax Act, 1961 subject to the following conditions:

 

  • The payer satisfies itself that the receiver is a member of Scheduled Tribe residing in any specified area, and the payment as referred above is accruing or arising to the receiver as referred to in clause (26) of section 10 of the said Act, during the previous year relevant for the assessment year in which the payment is made, by obtaining necessary documentary evidences in support of the same;
  • The payer reports the above payment in the statements of deduction of tax as referred to in sub- section (3) of section 200 of the said Act;
  • The payment made or aggregate of payments made during the previous year does not exceed twenty lakh rupees.
Legislation UpdatesNotifications

On September 17, 2021, the Central Government extends timelines under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.

They are listed below:

(A) where the specified Act is the Incometax Act, 1961 and

(a) the completion of any action relates to passing of any order for imposition of penalty under Chapter XXI of the Incometax  Act,

(i) the 30th day of March, 2022 shall be the end date of the period during which the timelimit specified in, or prescribed or notified under, the Incometax Act falls for the completion of such action; and

(ii) the 31st day of March, 2022 shall be the end date to which the timelimit for completion of such action shall stand extended;

(b) the compliance of any action relates to intimation of Aadhaar number to the prescribed authority under subsection (2) of section 139AA of the Incometax Act, the timelimit for such the compliance of such action shall stand extended to the 31st day of March, 2022.

(B) where the specified Act is the Prohibition of Benami Property Transaction Act, 1988, (45 of 1988) and the completion of any action, relates to issue of notice under subsection (1) or passing of any order under subsection (3) of section 26 of the Benami Act,

(i) the 30th day of June, 2021 shall be the end date of the period during which the timelimit specified in or prescribed or notified under the Benami Act falls, for the completion of such action; and

(ii) the 31st day of March, 2022 shall be the end date to which the timelimit for completion of such action shall stand extended.

CBDT
Legislation UpdatesRules & Regulations

On September 13, 2021, the Central Board of Direct Taxes notifies Income-tax (29th Amendment) Rules, 2021 to amend Income-tax Rules, 1962. The Amendment inserts a provision prescribing income- tax authority under second proviso to clause (i) of sub-section (1) of section 142.

 

The Rule provides:

12F. Prescribed income- tax authority under second proviso to clause (i) of sub-section (1) of section 142.- The prescribed income-tax authority under second proviso to clause (i) of sub-section (1) of section 142 shall be an income-tax authority not below the rank of Income-tax Officer who has been authorised by the Central Board of Direct Taxes to act as such authority for the purposes of that clause.

CBDT
Legislation UpdatesNotifications

The Central Board of Direct Taxes (CBDT) has decided to further extend the due dates for filing of Income Tax Returns and various reports of audit for the Assessment Year 2021-22.

 

The details are as under:

  1. The due date of furnishing of Return of Income for the Assessment Year 2021-22, which was 31st July, 2021 under section 139(1) of the Act, as extended to 30th September, 2021, is hereby further extended to 31st December, 2021;
  2. The due date of furnishing of Report of Audit under any provision of the Act for the Previous Year 2020-21, which is 30th September, 2021, as extended to 31st October, 2021, is hereby further extended to 15th January, 2022;
  3. The due date of furnishing Report from an Accountant by persons entering into international transaction or specified domestic transaction under section 92E of the Act for the Previous Year 2020-21, which is 31st October, 2021, as extended to 30th November, 2021, is hereby further extended to 31st January, 2022;
  4. The due date of furnishing of Return of Income for the Assessment Year 2021-22, which is 31st October, 2021 under sub-section (1) of section 139 of the Act, as extended to 30th November, 2021, is hereby further extended to 15th February, 2022;
  5. The due date of furnishing of Return of Income for the Assessment Year 2021-22, which is 30th November, 2021 under sub-section (1) of section 139 of the Act, as extended to 31st December, 2021 , is hereby further extended to 28th February, 2022;
  1. The due date of furnishing of belated/revised Return of Income for the Assessment Year 2021-22, which is 31st December, 2021 under sub-section (4)/sub-section (5) of section 139 of the Act, as extended to 31st January, 2022,  is hereby further extended to 31st March, 2022;

 

It is also clarified that the extension of the dates as referred to in clauses (9), (12) and (13) of Circular No.9/2021 dated 20.05.2021 and in clauses (1), (4) and (5) above shall not apply to Explanation 1 to section 234A of the Act, in cases where the amount of tax on the total income as reduced by the amount as specified in clauses (i) to (vi) of sub-section (1) of that section exceeds rupees one lakh.

Legislation UpdatesRules & Regulations

On September 06, 2021, the Central Board of Direct Taxes makes the Income-tax (26th Amendment) Rules, 2021 further to amend Income-tax Rules, 1962.

 

The Amendment Act inserts new provision In the Income-tax Rules, 1962, after rule 14B:

 

14C. Prescribed manner of authentication of an electronic record under electronic verification code under sub-clause (b) of clause (i) of sub-section (7) of section 144B.- For the purposes of sub-clause (b) of clause (i) of sub-section (7) of section 144B, where an assessee or any other person submits an electronic record by logging into his registered account in designated portal of the Income-tax Department, it shall be deemed that the electronic record has been authenticated under electronic verification code.

Explanation.- For the purposes of this rule, ―designated portal shall have the same meaning as assigned to it in in clause (i) of the Explanation below to section 144B‘.

CBDT
Legislation UpdatesNotifications

The Central Board of Direct Taxes has passed Income Tax (25th Amendment) Rules, 2021 on August 31, 2021. The Income Tax (25th Amendment) Rules, 2021 shall come into force on April 1, 2022. The Amendment inserts Rule 9D prescribing calculation of taxable interest relating to contribution in a provident fund, exceeding specified limit. For the calculation of taxable interest relating to provident fund, following points to be taken into consideration under Rule 9D:

 

  • The Non-taxable contribution account shall be the aggregate of the following:
  • closing balance in the account as on March 31, 2021
  • any contribution made by the person in the account during the previous year 2021-2022 and subsequent previous years, which is not included in the taxable contribution account; and
  • interest accrued as reduced by withdrawal
  • The Taxable contribution account shall be the aggregate of the following:
  • contribution made by the person in a previous year in the account during the previous year 2021-2022 and subsequent previous years, which is in excess of the threshold limit; and
  • interest accrued as reduced by the withdrawal, if any, from such account; and

 

The threshold limit shall mean:

  • five lakh rupees, if the second proviso to clause (11) or clause (12) of section 10 is applicable; and
  • two lakh and fifty thousand rupees in other cases.

 


*Tanvi Singh, Editorial Assistant has reported this brief.

CBDT
Legislation UpdatesRules & Regulations

On August 18, 2021, the Central Board of Direct Taxes (CBDT) has issued the Income-tax (24th Amendment) Rules, 2021 to further amend the Income-tax Rules, 1962.

Key highlights:

 

  • Rule 12AA, which specifies, Prescribed person has been Inserted, namely:

“12AA – For the purpose of clause (c) or clause (cd), as the case may be, of section 140, any other person shall be the person, appointed by the Adjudicating Authority for discharging the duties and functions of an interim resolution professional, a resolution professional, or a liquidator, as the case may be, under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) and the rules and regulations made thereunder.

Explanation– For the purposes of this rule, “Adjudicating Authority” shall have the same meaning as assigned to it in clause (1) of section 5 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016).”

  • Rule 51B, which specifies, Appearance by Authorised Representative in certain cases, has been Inserted, namely:

“51B. – For the purposes of clause (viii) of sub-section (2) of section 288, any other person, in respect of a company or a limited liability partnership, as the case may be, shall be the person appointed by the Adjudicating Authority for discharging the duties and functions of an interim resolution professional, a resolution professional, or a liquidator, as the case may be, under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) and the rules and regulations made thereunder.

Explanation––For the purposes of this rule “Adjudicating Authority” shall have the same meaning as assigned to it in clause (1) of section 5 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016).”

Hot Off The PressNews

Taking another step towards e-governance and encouraging participation of citizen as stakeholders in curbing tax evasion, the Central Board of Direct Taxes has launched an automated dedicated e-portal on the e-filing website of the Department to receive and process complaints of tax evasion, foreign undisclosed assets as well as complaints regarding Benami properties.

The public can now file a Tax Evasion Petition through a link on the e-filing website of the Department https://www.incometaxindiaefiling.gov.in/ under the head “File complaint of tax evasion/undisclosed foreign asset/ Benami property”. The facility allows for filing of complaints by persons who are existing PAN/Aadhaar holders as well as for persons having no PAN /Aadhaar. After an OTP based validation process (mobile and/or email), the complainant can file complaints in respect of violations of the Income-tax Act, 1961, Black Money (Undisclosed Foreign Assets and Income) Imposition of Tax Act, 1961 and Prevention of Benami Transactions Act (as amended) in three separate forms designed for the purpose.

Upon the successful filing of the complaint, the Department will allot a unique number to each complaint and the complainant would be able to view the status of the complaint on the Department’s website. This e-portal is yet another initiative of the Income Tax Department to bring about enhanced ease of interaction with the Department, while strengthening its resolve towards e-governance.


Ministry of Finance

[Press Release dt. 12-01-2021]

Income Tax Appellate Tribunal
Case BriefsTaxationTribunals/Commissions/Regulatory Bodies

Income Tax Appellate Tribunal (ITAT), Jaipur: The Bench of Vijay Pal Rao, JM and Vikram Singh Yadav, AM, held that, the benefit of CBDT Instruction No1916 dated 11-05-1994 will not take away the benefit of the explained jewellery acquired by the assessee.

The instant appeal was directed against the Order of CIT(A)-4, Jaipur.

The assessee is an individual and derives income from salary and other sources. When Search and Seizure under Section 132 of the Income Tax Act were carried out, gold and silver jewellery valued at Rs 32, 71, 895 were found from the residential premises of the assessee.

In the course of assessment proceeding, the assessee claimed benefit of CBDT Instruction No. 1916 dated 11-05-1994 to the extent of 850 gms. of jewellery in the hands of his wife, daughter and himself.

The AO accepted the above claim and allowed the said benefit, further the assessee added that the jewellery of 343.328 gms was purchased from time to time recorded in the books of account and all the jewellery is supported by purchase bill found during the course of search.

However, the above claim of the assessee was denied in giving the benefit of purchases made on the ground that this quantity of 343.328 gms. of gold jewellery is already the part of 850 gms. jewellery allowed as per CBDT Instruction No. 1916 dated 11-05-1994.

The above-stated action of denying the benefit by the AO was challenged by the assessee.

On being aggrieved by the order of CIT (A), the assessee filed the present appeal.

Decision 

Bench observed that there is no dispute regarding the fact that jewellery to the extent 343.328 gms. represents the purchases made by the assessee from time to time which is duly supported by the purchase bills found during the search and seizure action.

Tribunal stated that:

Once the AO has not disputed the purchases made by the assessee of the said quantity of jewellery then the same cannot be treated as unexplained jewellery of the assessee.

Why did AO deny the benefit? 

The AO denied the benefit of the said quantity of jewellery on the ground that since the benefit of reasonable jewellery to the extent of 850 gms. as per CBDT Instruction No. 1916 dated 11-05-1994 is already granted, therefore, to that extent, no further benefit can be granted.

Tribunal observed that it is pertinent to note that CBDT Instruction No. 1916 dated 11-05-1994 has explained in case of gold jewellery found in the possession of the assessee during the course of search and seizure activity and the assessee is not able to explain the same then the quantity prescribed under the said CBDT Instruction No. 1916 in respect of the married female member, unmarried female member and male member of the assessee would be treated as a reasonable holding of jewellery on account of the acquisition of that much jewellery on various occasions of marriages, other social & customary occasions as prevailing in the society. 

Bench held that the quantity of jewellery which is otherwise explained by the assessee by producing the purchase bills as well as recorded in the books of account of the assessee and the AO had not disputed the said explanation then the quantity which is explained otherwise by producing the purchase bills and books of account would not be treated as part of the quantity of reasonable possession as prescribed under the said CBDT Instruction No. 1916 dated 11-05-1994.

Therefore, the benefit of CBDT Instruction No. 1916 dated 11-05-1994 will not take away the benefit of the explained jewellery acquired by the assessee.

In view of the above discussion, the quantity of jewellery to the extent of 343.328 gms has to be allowed separately as explained jewellery and no addition can be made to that extent.

No error was found in the Order of CIT (A) in regard to 50% of silver items and the addition sustained by CIT on account of unexplained jewellery was deleted.[Ram Prakash Mahawar v. DCIT Central Circle, Alwar; 2020 SCC OnLine ITAT 498, decided on 20-02-2020]


What is the CBDT Instruction No. 1916?

The Central Board of Direct Taxes has issued Guidelines/ Instruction No. 1916 dated 11th May, 1994 in the matter of seizure of jewellery, which reads:

Instances of seizure of jewellery of small quantity in the course of operation under section 132 have come to the notice of the Board. The question of a common approach to situation where search parties come across items of jewellery has been examined by the Board and following guidelines are issued for strict compliance.

(i) In the case of a wealth-tax assessee, gold jewellery and ornaments found in excess of the gross weight declared in the wealth-tax return only need to be seized.

(ii) In the case of a person not assessed to wealth-tax gold jewellery and ornaments to the extent of 500 gms. per married lady 250 gms per unmarried lady and 100 gms. per male member of the family, need not be seized.

(iii) The authorized officer may having regard to the status of the family and the customs and practices of the community to which the family belongs and other circumstances of the case, decide to exclude a larger quantity of jewellery and ornaments from seizure. This should be reported to the Director of Income-tax/Commissioner authorizing the search all the time of furnishing the search report.

(iv) In all cases, a detailed inventory of the jewellery and ornaments found must be prepared to be used for assessment purposes.

Legislation UpdatesNotifications

Central Board of Direct Taxes in exercise of powers conferred under Section 138(1)(a) of Income Tax Act, 1961, has issued Order inF.No. 225/136/2020/ITA.II dated 31.08.2020, for furnishing information about IT Return Filing Status to Scheduled Commercial Banks, notified vide notification No. 71/2020 dated 31.08.2020 under sub-clause (ii) of clause (a) of sub-section (1) of Section 138 of the Act.

The data on cash withdrawal indicated that huge amount of cash is being withdrawn by the persons who have never filed income-tax returns. To ensure filing of return by these persons and to keep track of cash withdrawals by the non-filers, and to curb black money, the Finance Act, 2020 w.e.f. 1st July, 2020 further amended the Income-tax Act, 1961 to lower the threshold of cash withdrawal to Rs. 20 lakh for the applicability of TDS for the non-filers and also mandated TDS at the higher rate of 5% on cash withdrawal exceeding Rs. 1 crore by the non-filers.

Income Tax Department has already provided a functionality “Verification of applicability under Section 194N” on www.incometaxindiaefiling.gov.in for Banks and Post offices since 1st July, 2020.  Through this functionality, Bank/Post Office can get the applicable rate of TDS under Section 194N of the Income-tax Act, 1961 by entering the PAN of the person who is withdrawing cash.

The Department has now released a new functionality “ITR Filing Compliance Check” which will be available to Scheduled Commercial Banks (SCBs) to check the IT Return filing status of PANs in bulk mode. The Principal Director General of Income-tax (Systems) has notified the procedure and format for providing notified information to the Scheduled Commercial Banks. The salient features of the using functionality are as under:

  1. Accessing “ITR Filing Compliance Check”: The Principal Officer & Designated Director of SCBs, which are registered with the Reporting Portal of Income-tax Department (https://report.insight.gov.in) shall be able to use the functionality after logging into the Reporting Portal using their credentials. After successfully logging in, link to the functionality “ITR Filing Compliance Check” will appear on the home page of the Reporting Portal.
  2. Preparing request (input) file containing PANs: The CSV Template to enter PAN details can be downloaded by clicking on the “Download CSV template” button on the “ITR Filing Compliance Check” page. PANs, for which IT Return filing status is required, are required to be entered in the downloaded CSV template. The current limit of PANs in one file is 10,000.
  3. Uploading the input CSV file: Input CSV file may be uploaded by clicking on Upload CSV button. While uploading, “Reference Financial Year” is required to be selected. Reference Financial Year is the year for which results are required. If the selected Reference Financial Year is 2020-21 then results will be available for Assessment years 2017-18, 2018-19 and 2019-20. Uploaded file will start reflecting with Uploaded status.
  4. Downloading the output CSV file: After processing, CSV file containing IT Return Filing Status of the entered PANs will be available for download and “Status” will change to Available.  Output CSV file will have PAN, Name of the PAN holder (masked), IT Return Filing Status for last three Assessment Years. After downloading of the file, the status will change to Downloaded and after 24 hours of availability of the file, download link will expire and status will change to Expired.

Scheduled Commercial Banks can also use API based exchange to automate and integrate the process with the Bank’s core banking solution. Scheduled Commercial Banks are required to document and implement appropriate information security policies and procedures with clearly defined roles and responsibilities to ensure security of information.


Ministry of Finance

Press Release dt. 02-09-2020