The CBDT has issued Instruction No. 3/2016 dated 10.03.2016 by which it has issued detailed guidelines for implementation of transfer pricing provisions. The CBDT has pointed out that due to a number of legislative, procedural and structural changes carried out over the last few years, Instruction No. 3 of 2003 was replaced with Instruction No. 15/2015, dated 16th October, 2015. After the issuance of Instruction No. 15/2015, the Board has received some suggestions and queries, which have been examined in detail. Accordingly, Instruction No. 3/2016 dated 10.03.2016 is being issued to replace Instruction No. 15 of 2015. This Instruction is applicable for both international transactions and specified domestic transactions between associated enterprises. The guidelines on various issues have been set out in detail

The CBDT has issued a letter dated 10.03.2016 in which it is pointed out that several assesses have declared income from agriculture of more than Rs. 1 Crore in the income tax return filed for earlier years especially from AY 2011-12 to 2013-14. The CBDT has stated that there is a PIL matter pending before Hon’ble Patna High Court wherein concerns have been raised that a few assesses may be engaged in routing their unaccounted / illegal money in the garb of agricultural income thereby not only claiming exemptions on such income but also engaged in the money laundering activities. It is stated that since agricultural income is only used for rate purposes, it was noticed that in a few such high value cases, taxpayers may have inadvertently made data entry errors while filling up the fields for agricultural income. The CBDT has accordingly directed AOs to verify the genuineness of the alleged agricultural income

The CBDT has issued a letter dated 08.03.2016 in which it has clarified that the benefit of Circular 21 of 2015 dated 10.12.2015 by which the monetary limits for filing appeals before the Income Tax Appellate Tribunals and High Courts were raised to Rs. 10 lakhs and Rs. 20 lakhs respectively applies also to cross objections filed by the Department before the ITAT under section 253(4) of the Income-tax Act and to references to the High Court under sections 256(1) and 256(2) of the Act

The Central Board of Direct Taxes (“CBDT”) has issued a press release dated 07.03.2016 stating that it has issued an Order setting up a dedicated structure for delivery and monitoring of tax payer services in the Income Tax Department. Member (Revenue and Tax Payer Services) will oversee the delivery and monitoring of taxpayer services in CBDT. Two separate Directorates, called Directorate of Tax Payer Services I and Directorate of Tax Payer Services II have been set up. Together, these Directorates will be responsible for delivery and monitoring of taxpayers services in the field offices and e-services deliverable through various electronic platforms of the Department. They will oversee and co-ordinate all matters relating to grievances of taxpayers and ensure their timely redressal

CA Rajkamal Shah, an expert on service-tax, has explained the implications of the amendment by the Finance Bill 2016 from 1.4.2016 read with Notification No. 18/2016-ST and Notification No. 9/2016 – ST with respect to the levy of service-tax on senior advocates

The Chamber of Tax Consultants has released a publication titled “Bird’s Eye-View Of The Finance Bill 2016”. The publication is authored by several well-known professionals such as Nihar Jambusaria, Nilesh Kapadia, Mayur Nayak, Apurva Shah, Ashok Sharma, Sameer Dalal and others. Leading Senior Advocates Dinesh Vyas and Dr. K. Shivaram have provided valuable inputs. The publication contains an in-depth analysis of the provisions of the Finance Bill relating to Direct tax and indirect tax and identifies several problem areas. Where feasible, the learned authors have offered suggestions on how the problems can be overcome. The publication is available in a pdf format and can also be viewed on the website of the Chamber of Tax Consultants. The publication will prove to be invaluable to all professionals and taxpayers who are grappling with the intricacies of the Finance Bill.

The CBDT has issued Circular No. 07/2016 dated 07.03.2016 in which it has pointed out that a consortium of contractors is often formed to implement large infrastructure projects particularly in Engineering, Procurement and Construction (“EPC’) contracts and Turnkey Projects. The tax authorities, in many cases have taken a position that such a consortium constitutes an Association of Persons (‘AOP’) i.e. a separate entity for charging tax The claim of taxpayers, on the other hand, is contrary to this view. This has led to tax disputes particularly in those cases where each member of the consortium, although jointly and severally liable to the contractee, has a clear distinction and role in scope of work responsibilities and liabilities of the consortium members. With a view to avoiding disputes, the CBDT has issued clear-cut guidelines on the attributes that a consortium arrangement for executing EPC/Turnkey contracts must possess for it not to be treated as an AOP

The CBDT has issued an Office Memorandum dated 07.03.2016 stating that in view of the large volume of pending refunds which are subject to proceedings u/s 245 and the timeline of 30 days for responding to the notice allowed to the assessee and the same time period allowed to the assessing officer to confirm/ correct the demand, it is taking too long for the demand to be verified and the refunds to be issued, leading to rise of grievances. With a view to clear the pendency of refunds which are subject to verification under section 245, the CBDT has been decided that the timeline of 30 days for the assessee and the assessing officer specified in the O.M. dated 29.01.2016 may be reduced to 15 days with regard to the notices under section 245 to be issued in the balance period of the current financial year. This is a one-time measure to clear the backlog of refunds and accordingly the reduced timeline of 15 days shall be valid only till 31.03.2016

Eminent Jurist Shri. S. E. Dastur addressed a distinguished audience of professionals and taxpayers on Friday, 4th March 2016, on the implications of the Finance Bill 2016. The function was organised by the Bombay Chartered Accountants’ Society (BCAS). This was Mr. Dastur’s 28th talk on the Finance Bill, which is probably a World record in itself. With his usual eloquence and clarity of expression, Mr. Dastur enthralled the audience as he unravelled nuances of the Finance Bill 2016