The CBDT has issued Instruction No. 20/2015 dated 29.12.2015 in which it has issued clarifications on several issues in order to facilitate the conduct of scrutiny assessments in cases selected through Computer Aided Scrutiny Selection (‘CASS’). The CBDT has also stated that as far as the returns selected for scrutiny through CASS-2015 are concerned, two type of cases have been selected for scrutiny in the current Financial Year – one is ‘Limited Scrutiny’ and other is Complete Scrutiny’. The assessees concerned have duly been intimated about their cases falling either in ‘Limited Scrutiny’ or ‘Complete Scrutiny’ through notices issued under section 143(2) of the Income-tax Act, 1961 (‘Act’). The procedure for handling ‘Limited Scrutiny’ cases has been explained in detail by the CBDT.
CBDT Frowns On Hardship To Taxpayers And Wastage Of Time By Issue Of Vague S. 143(2) Scrutiny Notices By AO
The CBDT has issued Instruction No. 19/2015 dated 29.12.2015 stating that instances have come to the notice of the Board that in cases selected under scrutiny, while issuing the first notice, Assessing Officers do not convey the specific compliance requirements like production of accounts, furnishing of documents, information, evidences, submission of other requisite particulars etc. Since the taxpayers or their authorized representatives are required to comply with the statutory notice issued by the Assessing Officer, they remain clueless about the information required to be submitted and their appearance before the Assessing Officer does not serve any fruitful purpose except recording of their presence. This causes undue hardship to the taxpayers and unnecessary wastage of their time. The CBDT has directed that Assessing Officers should first go through the returns of income which have been selected for scrutiny and identify the issues which require examination. The initial notice issued under section 143(2) of the Income-tax Act, 1961 should itself be accompanied with the questionnaire containing details of specific documents/information/evidences etc. that are required to be furnished by the taxpayer in connection with scrutiny assessment proceeding in their respective case.
CBDT Accepts High Court Verdict On Non-Applicability Of TDS U/s. 194A To Interest On Court-Directed Fixed Deposits
The CBDT has issued Circular No. 23/2015 dated 28.12.2015 stating that in the case of UCO Bank (Writ Petition No. 3563 of 2012), the Delhi High Court has held that the provisions of section 194A do not apply to fixed deposits made in the name of Registrar General of the Court on the directions of the Court during the pendency of proceedings before the Court. It is pointed out that in such cases, it is not known who the beneficiary of the fixed deposits will be till the Court passes the appropriate orders in the matter. The amount and year of receipt is also unascertainable. The High Court quashed Circular No. 8 of 2011 and stated that the person who is ultimately granted the funds would be determined by orders that are passed subsequently. The Board has accepted the aforesaid judgment and clarified that interest on FDRs made in the name of Registrar General of the Court or the depositor of the fund on the directions of the Court, will not be subject to TDS till the matter is decided by the Court. However, once the Court decides the ownership of the money lying in the fixed deposit, the provisions of section 194A will apply to the recipient of the income. The CBDT has also directed that such issues should not be contested in appeal and pending litigation, if any on the issue before various Courts/Tribunals should be withdrawn/not pressed upon
CBDT Issues Draft Guiding Principles for determination of Place of Effective Management (POEM) of a Company
The CBDT has issued a press release dated 23.12.2015 stating that the Finance Act, 2015 has amended, with effect from 01.04.2016, the provisions of Income-tax Act relating to determination of residence of a company. In accordance with the amended provisions a company would be said to be resident in India in any previous year, if it is an Indian company or its Place of Effective Management (POEM) in that year is in India. It is further stated that the Explanatory Memorandum to the Finance Bill, 2015 stated that a set of guiding principles for determination of POEM would be issued for the benefit of the taxpayers as well as the tax administration
CBDT Clarifies Law On Applicability Of Minimum Alternate Tax (MAT) On Foreign Companies For Period Prior To 01.04.2015
The CBDT has issued Instruction No. 18/2015 dated 23.12.2015 clarifying the position with regard to the applicability of Minimum Alternate Tax (MAT) on foreign companies for the period prior to 1.04.2015 in the wake of instruction No.9 dated 02/09/2015, Press Release dated 24.09.2015 and the decision of the Supreme Court in the case of Castleton Investment Ltd
Finance Ministry Invites Applications For Appointment To Post Of Members Of CBDT
The Department of Revenue, Ministry of Finance, has issued an Office Memorabdum dated 18.12.2015 stating that some posts of Members in the Central Board of Direct Taxes in the Department of Revenue in the pay scale of Rs. 80,000/- (Fixed) are likely to fall vacant in the next financial year i.e. 2016-17. The criteria for selection is set out. One of the conditions is that the applicants should have “high professional merit and excellence” and “impeccable reputation of integrity”. Eligible officers are required to forward their applications by 19.01.2016
Revenue Secretary Directs Mandatory Use Of Email To Facilitate Taxpayers’ Electronic Interface With Department
The CBDT has issued a letter dated 15.12.2015 stating that the Revenue Secretary has directed that henceforth any notice/letter/communication issued by any officer under Department of Revenue; including CBDT, its directorates and field formations; to the tax payers, members of public should invariably contain mention of email address and office phone numbers, of the officers signing such, communications/notice/letters for facilitating tax payers’ electronic interface with the Department. The CBDT has requested everyone to ensure that the above directions are strictly followed
CBDT Directs Dept To Extend Benefits Of Amendments To S. 43B Retrospectively In Light Of Apex Court Verdict In Alom Extrusions
Accordingly, w.c.f. 1.4.1988, the settled position is that if the assessee deposits any sum payable by it by way of tax, duty, cess or fee by whatever name called under any law for the time being in force, or any sum payable by the assessee as an employer by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of employees, on or before the ‘due date’ applicable in his case for furnishing the return of income under section 139(1) or the Act, no disallowance can be made under section 43B of the Act
CBDT Relaxes Rules Regarding Furnishing Of Information In Respect Of Payments Made To Non-Residents
The CBDT has issued a press release dated 17.12.2015 stating that section 195 of the Income-tax Act (‘the Act’) empowers the Central Board of Direct Taxes to capture information in respect of payments made to non-residents, whether chargeable to tax or not. Rule 37BB of the Income-tax Rules has been amended to strike a balance between reducing the burden of compliance and collection of information under section 195 of the Act
ITAT Lauds CBDT For ‘Taxpayer Friendly’ Measure And Disposes Off 1000’s Of Low Tax Effect Dept Appeals On War Footing
The ITAT has complimented the CBDT for issuing Circular No. 21/ 2015 dated 10th December 2015 and stating therein that all pending appeals of the department with a monetary limit not exceeding Rs. 10,00,000 shall be withdrawn/ not pressed. The ITAT has acted with remarkable alacrity to give effect to the said Circular of the CBDT. Over the weekend and past few days, the Hon’ble Members, Registrar and Bench Clerks have been involved in sorting through thousands of appeals and identifying the ones that qualify for dismissal pursuant to the said Circular
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