The CBDT has issued a press release dated 18.04.2016 stating that the Income-tax Act, 1961 (the Act) provides that the Central Board of Direct Taxes may prescribe rules specifying the procedure for grant of relief or deduction of income-tax paid in any country or specified territory outside India, under section 90/ 90A/ 91 of the Act against the income-tax payable under the Act. Accordingly, the CBDT has framed the draft rules for grant of Foreign Tax Credit. The CBDT has invited comments from stakeholders and general public by 02.05.2016 at the email address dirtpl4@nic.in or by post at Director (TPL-IV), Central Board of Direct Taxes, Room No. 147-F, North Block, New Delhi

In a shocking incident, the CESTAT has passed severe strictures against the casual manner in which officials of the high rank of Commissioner (Appeals) have disposed off appeals. The order points out that the order sheets were maintained in a casual manner and even the order issued by the Commissioner (Appeals) was undated. “If this is the manner an appellate authority acts, and his undated order comes for judicial review, it is difficult to appreciate the very existence of the impugned order itself as to whether that has seen the light of the day” the CESTAT observed in a caustic tone. Stung by the strictures passed by the CESTAT, the CBEC has issued an Instruction dated 13.04.2016 in which it has lamented at the “severe lacunae in the functioning of quasi judicial and appellate authorities in the department” and stated that the “poor maintenance of records interalia in the discharge of the functions of these authorities has been a cause of concern”. It is also accepted with a tone of regret that “it is evident that the said Commissioner (Appeal) was performing his assigned public functions in a pre-functory and casual manner.”

The CBDT has vide Order No. 52 of 2016 dated 21.03.2016 stated that the President has appointed several officers of Indian Revenue Service to the grade of Joint Commissioner of Income-tax purely on ad-hoc basis in PB-3 (Rs. 15,600-39,100 with GP Rs. 7,600) with effect from 1st April 2016 or assumption of charge of the post, whichever is later

The CBDT has issued a letter dated 16.03.2016 in which it has noted that an investigation has been conducted by Kolkata Investigation Directorate in respect of large number of penny stock companies, whose share prices were artificially raised on the Stock Exchanges in order to book bogus claims of Long Term Capital Gains or Short Term Capital Loss by various beneficiaries. It is stated that extensive investigation, including search and seizure/survey action on entry providers, riggers, beneficiaries etc. was conducted by the Investigation Directorate in such cases. Based upon outcome of such investigation and analysis of the data, the Systems Directorate has now uploaded details of such information in respect of individual assessees who have made transactions in such penny stocks. The CBDT has directed that the information relating to the “Penny Stock” should be considered by AO’s for making assessments u/s 143(3) and reopening assessments u/s 148 of the Act

The CBDT has issued Office Memorandum dated 11.03.2016 by which it has drawn attention to its earlier letter dated 01.06.2015 in which it was stated that in case of an assessee whose tax has been deducted at source but not deposited to the Government’s account by the deductor, the deductee assessee shall not be called upon to pay the demand to the extent tax has been deducted from his income. It was further specified that section 205 of the Income-tax Act, 1961 puts a bar on direct demand against the assessee in such cases and the demand on account of tax credit mismatch in such situations cannot be enforced coercively. The CBDT has noted that instances have come to the notice of the Board that these directions are not being strictly followed by the field officers. The CBDT has accordingly reiterated the instructions contained in its letter dated 01.06.2015 and directed the assessing officers not to enforce demands created on account of mismatch of credit due to non-payment of TDS amount to the credit of the Government by the deductor

The Institute of Chartered Accountants of India (ICAI), the august body of professional Chartered Accountants, has today released a publication titled “ICAI’s e-Flash on Finance Bill 2016”. The publication contains a brief review of the Finance Bill by leading CAs like CA. M. Devaraja Reddy, President, ICAI, CA. Nilesh Shivji Vikamsey, Vice- President, ICAI, CA. Prafulla P. Chhajed, CA. Naveen N. D. Gupta and other eminent luminaries. The impact of all the relevant provisions of the Finance Bill 2016 have been summarized in the publication in a succinct manner. The publication will prove useful to all professionals and taxpayers

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