The Finance Ministry has issued a press release dated 11th December 2016 in which it has warned that any instance coming to the notice of Income-tax Department which reflects manipulation in the amount of income, cash-in-hand, profits etc. and fudging of accounts may necessitate scrutiny of such cases so as to ascertain the correct income of the year and may also attract penalty/prosecution in appropriate cases as per provision of law

The CBDT has issued Circular No. 40/2016 dated 9th December 2016 directing Assessing Officers not to reopen assessments of earlier years u/s 147 of the Act merely because there is an increase in turnover of the present year because of the adoption by the assessee of digital means of payment. The CBDT has pointed out that such move would cause “undue harassment” to the taxpayers

The CBDT has issued Order No. 198 of 2016 dated 9th December 2016 by which it has stated that the President has extended the ad-hoc appointment of several IRS officers to the grade of Joint Commissioner of Income-tax upto 31st December 2016

We are pleased to announce that the All India Federation of Tax Practitioners and Income Tax Appellate Tribunal Bar Association has released its publication titled “Interpretation of Taxing Statutes – Frequently Asked Questions” dedicated in fond memory of Hon’ble Mr. Justice S. H. Kapadia, Former Chief Justice of India. This is a unique publication in a questions-answers format explaining the provisions and various controversies relating to interpretation. This scholarly publication will be a useful reference to Lawyers, Chartered Accountants, Tax Practitioners as well as Members of the ITAT to understand the Basic Principles of Interpretation of Taxing Statutes. The publication having 334 Questions & Answers and is divided into 20 chapters viz. General Principles of Interpretation, Binding Precedents on Direct Taxes, Subsidiary Rules and Special Maxims Aiding Interpretation, Aids to Interpretation (Internal and External) of Statute, Interpretation of Statutes – Exemptions, Deductions and Benefits, Operations, Expiry and Repeal of Statutes, Concepts & Principles of Interpretation of Double Taxation Avoidance Agreements (DTAAs)/ Tax Treaties, The Income Tax and The Constitution of India, Principles of Natural Justice, Interpretation of Penal Provisions in Taxing Statutes, Interpretation of Statutes – Prosecutions under the Income-tax Act, Principles of Interpretation of other Laws Applicable to Direct Tax Laws, Interpretation of Deeds, Documents and Wills, Interpretation of Taxing Statutes – Sales Tax, Interpretation of Indirect Tax Laws, Application of the General Clauses Act, 1897 to the Interpretation of Income-tax Act, 1961, Legal Maxims, Interpretation of Words and Phrases, Wielding The Gavel: Justice – S. H. Kapadia and His Landmark Judgments, Articles for Reference – Interpretation of Taxing Statutes

The CBDT has issued Circular No. 39/ 2016 dated 29.11.2016 in which it has stated that in accordance with the judgement of the Supreme Court in Meghalaya Steels Ltd, the subsidies of transport, power and interest given by the Government to the Industrial Undertaking are receipts which have been reimbursed for elements of cost relating to manufacture/sale of the products and there is a direct nexus between profit and gains of the industrial undertaking / business and reimbursement of such business subsidies. The CBDT has directed that such subsidies are part of profits and gains of business derived from the Industrial Undertaking and are not to be included under the head ‘Income from other sources’. Therefore, deduction is admissible under section 80-IB/80-IC of the Act on such revenue receipts derived from the Industrial Undertaking

The Union Finance Minister Arun Jaitley today introduced the Taxation Laws (Second Amendment) Bill, 2016 with a view to tax unaccounted black money deposited in bank accounts pursuant to demonetisation. The salient terms of the proposal to tax the unaccounted cash are as follows: (i) 30 per cent tax on undisclosed income plus 10 per cent penalty as also a 33 per cent surcharge; (ii) 25 per cent of undisclosed income post demonetisation has to be deposited in the Pradhan Mantri Garib Kalyan Deposit Scheme; (iii) undisclosed wealth deposited post demonetisation which is detetcted by the income-tax authorities will attract 75 per cent tax and 10 per cent penalty. The money from the Pradhan Mantri Garib Kalyan Deposit scheme would be used for projects in irrigation, housing, toilets, infrastructure, primary education, primary health and livelihood so that there is justice and equality, states the Statement of Objects and Reasons of the Bill

The Chamber of Tax Consultants has organized a public meeting to discuss the tax and legal implications of the demonetisation of currency. The meeting will be addressed by an expert panel comprising of four eminent Advocates and Chartered Accountants. The experts will consider implications under the Income-tax Act, FEMA, PMLA, Prohibition of Benami Property Transactions Act, Service Tax , VAT, Excise etc. Members of the public are requested to send their queries in advance so that the expert panel can express a considered opinion on them